Enterra Insights

Solar Power: Taking Advantage of Desertification?

Many emerging market countries have notable deserts that historically have been more of a curse than a blessing. In past posts about solar power, I've noted that as technologies improve opportunities may emerge for these countries to put their desert lands to use producing much-needed electrical power. A German physicist is now seriously touting such a plan for the Sahara ["Dune Boon? Solar Power From the Sahara Is Debated," by Patrick McGroarty, Wall Street Journal, 11 August 2010]. McGroarty reports:

"German physicist Gerhard Knies thinks he's found the answer to Europe's long-term energy needs—in the Sahara. Dr. Knies's idea seems quixotic in every other sense: Build dozens of solar plants across the North African desert and put thousands of miles of power cables under the Mediterranean Sea to carry the electricity produced to Europe. He says the plan could supply 15% of the Continent's energy by 2050 at an estimated cost of €400 billion ($529 billion)—more than the gross domestic products of Algeria, Egypt, Libya, Morocco and Tunisia combined. 'I see a solution, so the problem is solved,' the white-haired scientist says with an earnest shrug of his shoulders. 'Of course, to implement it is something else.' What distinguishes Dr. Knies's brainchild from a mere idealist pipe dream is the nominal backing of some of Europe's biggest corporate names. Last summer, Munich Re, Siemens AG, Deutsche Bank and nine other mostly German companies formed a consortium called the Desertec Industrial Initiative to promote the alternative energy plan. For now, each company is contributing €150,000 to Desertec annually, just enough to open an office and pay a chief executive to chase additional backers."

There are plenty of skeptics who believe such a plan will never get off the ground. Among their objections are the fact "solar thermal plants use mirrors to concentrate sunlight and create steam to drive turbines that generate electricity. Most require water for condensation and cooling—a scarce resource in the Sahara." Proponents counter that "the plants could be built near the sea and incorporate desalination facilities to generate fresh water, but analysts say that could prove cumbersome." Solar concentrators are generally more efficient than arrays of solar panels, but solar panels are getting cheaper and more efficient very quickly. The Economist reports, "The price of solar panels is falling fast enough to hurt Western manufacturers, but it is not yet low enough to make the sun a competitive source of electricity" ["Growing pains," 15 April 2010]. The article reports:

"Solar energy is popular because it is clean and abundant. The problem is that it remains expensive. According to recent calculations by the International Energy Agency, power from photovoltaic systems (solar cells) costs $200-600 a megawatt-hour, depending on the efficiency of the installation and the discount rate applied to future output. That compares with $50-70 per MWh for onshore wind power in America, by the IEA’s reckoning, and even lower prices for power from fossil fuels, unless taxes on greenhouse-gas emissions are included. The costs of solar are dropping; in some sunny places it may, in a few years, be possible to get solar electricity as cheaply from a set of panels as from the grid, and later on for solar to compete with conventional ways of putting electricity into the grid. But for the moment there would be no significant market for solar cells were it not for government subsidies."

There are plenty of reasons why people continue to pursue solar technologies. The most obvious reason, however, is that there is plenty of sunlight to be had for free ["Solar energy offers a vast supply of power, but harnessing it is a challenge," by Brian Palmer, Washington Post, 22 June 2010]. Palmer writes:

"We have a solar-based economy, whether or not we realize it. Ninety-four percent of the world's energy comes from the sun, even energy that doesn't at first glance seem solar. Coal, oil and natural gas are mostly the products of ancient plants that grew with the sun's help. The sun drives hydroelectric power by evaporating low-lying water, then dumping it at higher altitudes. Windmills turn because the sun warms the planet's air unevenly. Fortunately, there's plenty of sun to go around. Our local star is continuously transmitting 180 quadrillion watts of energy to the Earth, 14,000 times our requirements for generating power. So the question isn't where to get our energy, but how to capture it."

Rather than debate the plausibility of producing electricity from sunlight in the Sahara or whether solar power can currently compete with other forms of energy, I want to use this post to explore a number of purported breakthroughs in solar technology that could decrease the cost of solar power and increase its efficiency. Let's begin with the efficiency of solar cells.

The average solar cell converts 15 percent or less of the sunlight it captures and into energy. Conversion rates of over 40 percent have been achieved in the lab using concentrated sunlight and multi-junction solar panels, but that efficiency is gained at a high cost ["New solar cell efficiency record set," by Noel McKeegan, Gizmag, 26 January 2009]. McKeegan reported:

"Researchers at the Fraunhofer Institute for Solar Energy Systems ISE have set a new record for solar cell efficiency. Using concentrated sunlight on a specially constructed multi-junction solar cell, the research group lead by Frank Dimroth has achieved 41.1% efficiency for the conversion of sunlight into electricity. The breakthrough, which surpasses the 40.7 percent efficiency previously demonstrated by Spectrolab, involved the use of sunlight concentrated by a factor of 454 and focused onto a small 5 mm multi-junction solar cell made out of GaInP/GaInAs/ Ge (gallium indium phosphide, gallium indium arsenide on a germanium substrate). Even at a higher sunlight concentration of 880, an efficiency of 40.4% was measured."

In May of this year, a company called Innovalight claimed a record of 19 percent efficiency from its solar cell (obviously a record using non-concentrated sunlight) ["Record 19 percent efficiency achieved with low-cost solar cells," by Jeff Salton, 5 May 2010]. A little over a month later, a company called SunPower claimed to have surpassed that record by achieving a mark of 24.2 percent ["SunPower claims new solar cell efficiency record of 24.2 percent," by Darren Quick, Gizmag, 24 June 2010]. In order to increase efficiency, researchers are looking at what kinds of material can be used in manufacturing the cells as well as how the cells are constructed. Let's look first at some of the materials with which researchers are experimenting.

A Canadian researcher is working with cobalt sulphide ["Breakthrough in low-cost efficient solar cells," by Ben Coxworth, Gizmag, 8 April 2010]. Coxworth reports:

"A researcher at [Université du Québec à Montréal] ... has come up with ... an effective, low-cost solar cell. [Professor Benoît] Marsan’s invention builds upon work done in the early '90s by Professor Michael Graetzel of the Ecole Polytechnique Federale de Lausanne in Switzerland. Graetzel designed the dye-sensitized solar cell, which is still considered to be one of the most promising types of solar collection technology. Graetzel’s cell is composed of a porous layer of titanium dioxide nanoparticles, covered with a molecular dye that absorbs sunlight, like the chlorophyll in green leaves. The titanium dioxide is immersed under an electrolyte solution, above which is a platinum-based catalyst. As in a conventional alkaline battery, an anode (the titanium dioxide) and a cathode (the platinum) are placed on either side of a liquid conductor (the electrolyte). Sunlight passes through the cathode and the conductor, and then withdraws electrons from the anode, at the bottom of the cell. These electrons travel through a wire from the anode to the cathode, creating an electrical current."

Is it just me or does anything involving platinum sound a bit on the pricey side? Coxworth admits that a problem and points out some of the other drawbacks with this approach:

"Although Graetzel’s cell is easy to manufacture and can be used in a variety of applications, Marsan says it has two major problems that have held it back from large-scale commercialization. For one thing, the electrolyte is extremely corrosive, resulting in a lack of durability, and it’s densely colored, preventing the efficient passage of light. The other problem is the platinum cathode. Platinum is expensive, non-transparent, and rare - hardly a low-budget substance."

Marsan indicates that he has overcome these drawbacks. Coxworth explains:

"Marsan’s patented electrochemical solar cell has neither of these problems. For the electrolyte, UQAM created a new liquid/gel that is transparent and non-corrosive, increasing the cell’s output and stability. For the cathode, the platinum has been replaced with much less expensive cobalt sulphide. This substance is also more efficient, more stable, and easier to produce in a lab. Using this approach, the researchers have demonstrated an efficiency of 6.4% under standard illumination test conditions. While this is lower than the efficiency of conventional PV cells, the manufacturing and durability advantages of the Marsan electrochemical solar cell still make it an attractive proposition."

So our first candidate solar cell is low cost, but not efficient. The next approach uses metamaterials ["New metamaterial could lead to more efficient solar cells," by Ben Coxworth, Gizmag, 10 May 2010]. Coxworth reports:

"Metamaterials are manmade substances designed to do some very weird things that natural materials don’t. The path of a beam of light through a natural material like glass is predictable, but scientists from the California Institute of Technology (Caltech) have engineered an optical material that bends light in the wrong direction. This new negative-index metamaterial (NIM) could have several valuable uses including invisibility cloaking, superlensing (imaging nano-scale objects using visible light) and improved light collection in solar cells. ... Previous NIM’s have used used multiple layers to wrongly refract light. The Caltech material, by contrast, utilizes just one layer of silver permeated with 'coupled plasmonic waveguide elements.' Basically ... plasmons are light waves, which get coupled to waves of electrons at the point where the silver meets the air. The waveguide elements then guide these plasmon/electron waves through the material. This relatively simple material would be much easier to produce than previous efforts. By changing its composition or waveguide geometry, the NIM could be tuned to respond to different wavelengths, coming from almost any angle with any polarization. This quality makes it particularly well-suited to use in solar cells. 'The fact that our NIM design is tunable means we could potentially tune its index response to better match the solar spectrum, allowing for the development of broadband wide-angle metamaterials that could enhance light collection in solar cells,' explained team leader Harry Atwater. 'The fact that the metamaterial has a wide-angle response is important because it means that it can "accept" light from a broad range of angles. In the case of solar cells, this means more light collection and less reflected or "wasted' light".'"

Silver is cheaper than platinum, but it is still a precious metal; which means that this second approach is higher cost but also higher efficiency than the last one discussed. A third approach being experimented with uses solar cells with thin sheets of silicon on the outside, and a mixture of copper, iron and nickel between them ["Silicon that melts while cooling could improve solar cells," by Ben Coxworth, Gizmag, 2 August 2010]. Coxworth reports:

"You might think it was a simple law of physics that most solids melt as they get hotter, and harden as they get colder. A few materials, however, do just the opposite – they melt as they cool. Researchers at the Massachusetts Institute of Technology (MIT) have recently discovered that by dissolving certain metals into silicon, they can add that silicon compound to the relatively short list of exotic substances that exhibit retrograde melting. Their accomplishment could ultimately result in less expensive solar cells and electronic devices. The team started by creating a 'sandwich', made from two thin sheets of silicon on the outside, and a mixture of copper, iron and nickel between them. This was heated to a point that was below the normal melting point of silicon (which is 1414C/2577F), but high enough to cause the filling to dissolve, thus causing the silicon to become supersaturated with the metals. Not unlike clouds that become saturated with dust particles, when the supersaturated silicon cools below 900C(1652F), the metals precipitate out in liquid form, turning the material as a whole to a slush-like consistency. Impurities originally present in the silicon tend to migrate into the liquid, leaving purer silicon behind. The MIT team believe[s] that this means manufacturers could use less pure, less expensive grades of silicon for items such as solar cells or electronics, and purify them in the production process."

Although this approach may marginally increase the efficiency of solar cells, it's not clear whether it would make the manufacture of solar cells any cheaper (even though silicon is abundant). Two other approaches that Coxworth has written about involve nickel/lithium fluoride and selenium/zinc oxide ["Nickel and selenium could be used for cheaper, more efficient solar cells," by Ben Coxworth, Gizmag, 5 August 2010]. Coxworth writes:

"In two just-released studies, scientists have announced new ways of making solar cells less expensive and more efficient. In one of the projects, researchers from the University of Toronto demonstrated that nickel can work just as well as gold for electrical contacts in colloidal quantum dot solar cells. In the other, a team from California’s Lawrence Berkeley National Laboratory added selenium to zinc oxide, dramatically increasing the oxide’s efficiency in absorbing solar light. Both developments could result in more practical, affordable solar technology."

Coxworth first describes the approach using quantum dot solar cells and nickel.

"Quantum dot solar cells are already on the less-expensive side, as the dots themselves (also known as nanocrystals) are nanoscale bits of a semiconductor material, created using low-cost chemical reactions. The current produced by those dots has traditionally been collected via gold electrical contacts, but researchers from the U of T’s Photovoltaics Research Program have now successfully used nickel contacts to get the job done just as well. When the team first tried nickel, it intermixed with the quantum dots, forming a compound that blocked the flow of the electrical current. By adding just one nanometer of lithium fluoride between the nickel and the dots, however, a barrier was created that kept the two from mixing, while still allowing the current to flow from the dots to the nickel. The scientists claim that by using nickel, the material costs of quantum dot solar cells will be reduced by 40 to 80 percent. They plan to commercialize the technology once they can boost the cells’ overall efficiency."

Coxworth next turns to the approach using selenium/zinc oxide technology.

"Like nanocrystals, zinc oxide is also a relatively inexpensive material. While it has shown promise as a solar power conversion medium, the challenge has been to boost its efficiency at collecting solar energy. The team from Berkeley Lab has succeeded in doing that, by embedding selenium in it. Even just a nine percent concentration of selenium in a mostly zinc oxide base was found to have a pronounced effect on its ability to absorb light. 'Researchers are exploring ways to make solar cells both less expensive and more efficient; this result potentially addresses both of those needs,' said Marie Mayer, of Berkeley Lab’s Solar Materials Energy Research Group."

Another approach uses plastic (that's right, the miracle substance touted in the movie The Graduate) ["Lower cost solar panels using plastic electronics," by Jeff Salton, Gizmag, 30 March 2010]. Salton reports:

"Engineers at Princeton University have developed a new technique for producing electricity-conducting plastics that could dramatically lower the cost of manufacturing solar panels, making alternative power within reach of more consumers and industry. The Princeton researchers have successfully produced plastics that are translucent, malleable and able to conduct electricity, and are now looking at applications for the materials, most likely in a wide range of electrical devices. They believe plastics could represent a low-cost alternative to indium tin oxide (ITO), an expensive conducting material currently used in solar panels."

Finally, researchers in Japan are using gallium nitride/manganese to help them capture the energy of light wavelengths beyond those provided by visible sunlight ["New PV cell generates electricity from UV and IR light," by Rick Martin, Gizmag, 14 April 2010]. Martin reports:

"Last month at the meeting of the Japan Society of Applied Physics, a research group from the Kyoto Institute of Technology introduced a new photovoltaic cell that is capable of generating electricity not only from visible light, but from ultraviolet and infrared light as well. The research group, led by associate professor Saki Sonoda, hopes that this will lead to a more efficient PV cell that can be single-junction rather than the more conventional multi-junction. These new PV cells were made by 'doping' a wide bandgap transparent composite semiconductor -- in this case, gallium nitride (GaN) -- with a 3d transition metal such as manganese. For the atomically impaired among us, the other metals of that family would be scandium, titanium, vanadium, chrome, iron, cobalt, nickel, copper, and zinc. ... With such advancements in the field of photovoltaics it's exciting to see that the much hyped potential of thin film solar is not only coming to fruition, but it can also get even better still. Add to this the recent news that carbon sheets might possibly be used in solar panels, and the future looks bright for the industry indeed."

Now let's turn from the materials used in solar cells to how solar cells are constructed. There are a number of interesting new approaches being researched. For example, solar cells printed on paper ["MIT unveils first solar cell printed on paper," by Darren Quick, Gizmag, 6 May 2010]. Quick reports:

"MIT researchers used carbon-based dyes to 'print' the cells, which are about 1.5 to 2 percent efficient at converting sunlight to electricity. ... But Vladimir Bulovic, director of the Eni-MIT Solar Frontiers Research Center, [claims] any material could be used to print onto the paper solar cells if it was deposited at room temperature. It will still be some time before solar cells can be installed with a staple gun, however, as the paper variety are still in the research phase and are years from being commercialized."

Because solar cells are now able to be constructed in a number of shapes, such as flexible panels, designers are finding innovative ways of incorporating solar cells into structures even as windows ["Sphelar cells are the new 'power windows'," by Rick Martin, Gizmag, 28 March 2010]. Martin reports:

"Developed by Kyosemi Corporation, Sphelar solar cells are one of the most intriguing solar solutions that we have seen in a while. On display at the recent PV Expo 2010 in Tokyo, these tiny spherical cells gave us a glimpse of how windows in buildings might be used to collect solar power in the not-so-distant future. Sphelar cells are solidified silicon drops measuring 1.8 mm in diameter and are highly transparent, which is advantageous for a number of reasons. They can be embedded in glass to create a transparent solar cell window, capable of absorbing light from any direction or angle. Because both sides of the glass can collect light, this should translate into highly efficient energy harvesting. The cells can also be embedded in flexible surfaces, allowing for them to take on unusual shapes or be bent if necessary. The Sphelar Dome is one such example, designed to absorb more energy in the early morning and late evening unlike a flatter design."

Like the Sphelar that differentiates itself from flat panel designs, researchers at Boston College are experimenting with a design that is closer to a coaxial cable than a panel ["Highly efficient 'nanocoax' solar cell inspired by coaxial cable," by Mike Webb, Gizmag, 9 June 2010]. Webb reports:

"Traditionally, the goal of high power conversion efficiency in thin film solar cells has been compromised by opposing optical and electrical constraints – while a cell needs to be thick enough to absorb adequate amounts of light, it must also be thin enough for the extraction of current. Rising to this 'thick and thin' challenge, researchers at Boston College have designed a nanoscale solar cell based on the age-old technology that created the coaxial cable, promising a higher conversion efficiency than any thin film solar cell yet seen. Dubbed 'nanocoax', the cell features solar architecture that makes it thick enough to capture light while being sufficiently thin to promote a more effective elicitation of current. Using the coaxial concept initially conceived in the 1800’s, the Boston College research team devised a method of cell creation that does not require crystalline materials. ... 'Therefore, [According to professor of physics Michael Naughton, it] 'offers promise for lower-cost solar power with ultra thin absorbers. With continued optimization, efficiencies beyond anything achieved in conventional planar architectures may be possible, while using smaller quantities of less costly material.' Representing a new possibility for low cost, high efficiency solar power, the amorphous silicon nanocoax cells provide in excess of 8% power conversion efficiency, the highest of any nanostructured thin film solar cell to date."

A group of researchers from the University of Minnesota are trying to capture a significant amount of the heat that is lost by current solar arrays by using quantum dots and thereby boosting efficiency ["Harnessing 'hot' electrons could double efficiency of solar cells," by Tannith Cattermole, Gizmag, 11 July 2010]. Cattermole reports:

"Researchers from University of Minnesota have removed a barrier to improving solar cell efficiency by showing how heat energy currently lost from semiconductors can be captured and transferred to electric circuits. They hope manufacturers will use the results to produce solar cells with twice the output of current solar cells and at a lower cost. In current solar cells, the topmost layer is made from a crystalline semiconductor, usually silicon, which absorbs excess solar energy in the form of 'hot' electrons, and radiates the energy away before it can be harnessed. Up till now, capturing this heat into an electric circuit before it cools has not been possible, however the team constructed semiconductors of lead selenide only a few nanometers wide called 'quantum dots', and transferred the heat into wires of titanium dioxide successfully before the hot electrons cooled. The next step will be to build and improve solar cells with quantum dots, but a further obstacle will need to be addressed; there is still heat loss from titanium dioxide."

One final approach also uses both light and heat to improve solar power efficiency ["New process that harnesses heat energy could double efficiency of solar cells," by Darren Quick, Gizmag, 2 August 2010]. Quick reports:

"Photovoltaic solar cells convert light energy from the sun into electricity. Although significant strides have been made in increasing the efficiency of photovoltaic technology, they usually only result in incremental increases. Researchers at Stanford University have come up with a way that could more than double the efficiency of existing solar cell technology and potentially reduce the costs of solar energy production enough for it to compete with oil as an energy source. Instead of relying solely on photons, the new process, called 'photon enhanced thermionic emission,' or PETE, simultaneously combines the light and heat of solar radiation to generate electricity. Unlike photovoltaic technology currently used in solar panels – which becomes less efficient as the temperature rises – the new process excels at higher temperatures. The Stanford engineers who discovered it say the process promises to surpass the efficiency of existing photovoltaic and thermal conversion technologies. And the materials needed to build a device to make the process work are cheap and easily available, meaning the power that comes from it will be affordable. 'This is really a conceptual breakthrough, a new energy conversion process, not just a new material or a slightly different tweak,' said Nick Melosh, an assistant professor of materials science and engineering, who led the research group. 'It is actually something fundamentally different about how you can harvest energy."

I'll end on that bright note. Someone once said, "We will have solar energy as soon as the utility companies solve one technical problem - how to run a sunbeam through a meter." All I can say is stand by. Barriers once considered too high to make solar energy competitive with other means of generating electricity are being lowered every day. Who knows, all that desert wasteland may yet be put to good use if the cost of solar power continues to decrease.

Hospitals and Supply Chains

Recently Enterra Solutions has been doing some consulting with a hospital that is part of a larger hospital system. Hospitals, like other businesses, are looking for ways to improve their operations and get a handle on costs as well as improve their customer service. If you live in the United States, you know that the health care system, as a result of recent legislation affecting health insurance coverage remains, under a microscope. Tensions within the healthcare system are enormous. Patients and insurers want providers to offer services at the lowest possible costs. Providers want to ensure that they get fair compensation for the services they render (and they need to cover overhead expenses that include personnel costs, administrative services, malpractice insurance, and infrastructure -- including expensive medical equipment). Although medical breakthroughs continue to be made, many of those breakthroughs tend to increase rather than decrease costs. That is particularly true as efforts are made to extend the lives of elderly patients who often suffer from multiple maladies and require extensive care. A story rebroadcast on CBS' 60 Minutes last Sunday noted that care for the elderly had the potential of bankrupting the U.S. Government if costs aren't contained. Lost in the debate, according to Scott Allen, is the fact that improved hospital management could make a significant difference in keeping health care costs in check ["No waiting," Boston Globe, 30 August 2009]. He writes:

"The modern hospital is a storehouse of technology and training unmatched in human society. These lifesaving institutions are often the biggest employer in town, making them - justifiably - the pride of their communities. But hospitals are also the black holes of the American health care debate. 'Death panels' and fear of federal bureaucracy may get more public attention, but poor management at many of the nation’s 5,700 hospitals is a vastly more important reason that US health care costs are the highest in the world, and why the quality of care that we get for our money isn’t far better. Hospitals waste 20 to 30 cents of every dollar they collect, and most lag behind the neighborhood Rite-Aid in adopting basic business practices such as computerized record-keeping. What’s more, they make lots of mistakes, hastening nearly 100,000 patient deaths a year, according to one major study. Awash in internal politics and inefficiency, hospitals have overtaken prescription drugs as the main reason insurance bills go up each year - and the major reason that more and more people can’t afford insurance at all."

Allen admits that hospital operations are extremely complex and that that complexity "has long frustrated reformers." He's hopeful that could change. He continues:

"In recent years an efficiency expert - originally trained in the Soviet Union, land of legendary inefficiency - has been proving that hospitals don’t have to be wasteful and inflexible. Eugene Litvak, now a professor of health care management at Boston University, looks at hospitals and sees systems that aren’t even trying to be efficient with people’s time or money. If hospital executives concentrated on moving patients smoothly through the hospital the way that the local Applebee’s restaurant moves diners, he believes, they could make hospitals better places to work, safer environments for patients, and cheaper to operate."

Patient flow is the reason that supply chain analyst Steve Banker commented on Allen's article ["The Logistics of Flowing Patients," Logistics Viewpoints, 22 June 2010]. I will intersperse Banker's comments with mine as I review Allen's article. I always appreciate someone, like Banker, who sees connections where others might not. In this case, Banker sees connections between healthcare systems and supply chains that might not be obvious to others. As Banker writes, "Better logistics practices, particularly in the area of how patients are flowed through a hospital, could lead to significant improvements." Allen continues:

"[Litvak] can point to a dramatic proof of his ideas. Over the past six years, Cincinnati Children’s Hospital, one of the country’s premier hospitals, has worked with Litvak to streamline the flow of patients from the emergency department waiting room to post-surgical recovery areas. The payoff has been dramatic. Doctors now care for more patients in less time; there are fewer aggravations and logistical conflicts for staff and patients alike. The hospital says the improvements in efficiency have given it a boost in capacity equivalent to a $100 million, 100-bed expansion and boosted income from treating patients by even more. Doctors and nurses - many of them initially skeptical - generally like the system, too, because their schedules became more predictable. And Children’s officials say the changes have also made their hospital safer by reducing the times when nurses and doctors are under extreme stress."

Those are significant payoffs by any measure. Allen notes that "virtually every other major industry has adopted the principles of operations management, ... but the health care industry, 17 percent of the US economy, has been a big holdout." Banker remarks, "If hospital executives concentrated on the logistics of moving patients smoothly through the hospital, they could make hospitals better places to work, safer environments for patients, and cheaper to operate. The manufacturing, retail and 3PL sectors have all adopted advanced supply chain management principles."

According to Allen, "leading thinkers of the health care reform movement agree that the ideas put forward by Litvak and a few others have extraordinary potential. If all hospitals adopted aggressive 'flow management' programs, ... it would free up enough beds and other medical resources to care for all of the nation’s 46 million uninsured people." Litvak's claim reeks of hyperbole (not every hospital is as busy as those found in major urban areas, for example), but he can be excused since he is trying to make an important point. Allen explains:

"Litvak’s ideas are 'the best near-term play for changing health care delivery in a way that would meaningfully reduce spending and improve quality,' said Dr. Arnold Milstein, medical director of the Pacific Business Group on Health in California, the nation’s largest health care purchasing coalition. 'As a country, we are at this point really starving for improvements in care delivery that not only improve quality, but equally important, make health insurance more affordable.' Of course, the US health care system is frustrating proof that just because something is a good idea doesn’t mean it will happen. The American approach to health care has always been to focus overwhelmingly on the search for cures while devoting far less energy to practical matters like finding the best way to get cures to patients. Americans spend twice as much on health care as other industrialized nations with little evidence that the care here is better, and with little being done to stop the escalating costs. Litvak, who learned a lot about bureaucratic inertia from his years as an economist in the former Soviet Union, said that persuading hospitals to adopt his efficiency recommendations has been like cutting through sour cream. 'You get no resistance,' he says, 'but you also get no slice.'"

Allen reports that "in the world of operations management, Litvak is among the leading experts on flow." Although it is easy to understand why it is important to keep food flowing in restaurants or parts flowing in a manufacturing process, it is not as easy to see how flow plays a critical role in healthcare. But as Allen notes, "Good flow keeps costs down and customers happy." Customers, in this case, are also called patients. Allen explains why the flow of patients matters.

"In hospitals, nobody expects - or even wants - 'fast' care, but everyone in the building benefits when the flow of patients from one part of the system to another is smooth. Backups in one part of the hospital can cause backups in others, leaving, for example, patients sitting for hours in the waiting room or highly trained surgical teams cooling their heels with no patient. A smoothly flowing hospital saves time and money, but it also reduces stress on the staff and the risk of mistakes."

Highly trained surgical teams are also expensive teams. Keeping them idle inevitably increases costs of individual procedures because that down time must be covered to pay expenses. Every inefficiency in the system, in fact, must be covered and that can cause costs to rise. Allen continues:

"Unfortunately, the typical US hospital is a model of bad flow: The average emergency room wait, for example, is four hours. The problem is actually quite simple, Litvak says. Nearly every department is run separately, making today’s hospital a nest of competing kingdoms rather than a smooth-running, cooperative organization. Hospitals often have limited power over doctors, who can schedule patient appointments without regard to the hospital’s needs. Effectively, one of the most important industries in America is in the hands of people who, for all their talents, have little expertise at running a business. As a result, Litvak says, American hospitals only think they’re overcrowded because they have a chronic problem managing their flow. Patients simply pile up at certain times. In 2006, for instance, US hospitals were typically only 65 percent full, far less crowded than the 84 percent occupancy in Britain and the 90 percent occupancy of Canadian hospitals. But when US hospitals get much more than 65 percent full, the whole system starts to become stressed. Then, to boost their capacity, hospitals expand, at an average cost of $1 million per new bed."

You start to get a sense of why complexity has created a gap in management practices in hospitals. A number of people associated with the Cincinnati Children's Hospital had intuitively sensed that patient flow was at the heart of better care. When they looked into the problem, this is what they found:

"Cincinnati officials discovered that the busy nights were caused, not by the random distribution of accidents and illnesses in Cincinnati, but by the way the hospital assigned operating room time to surgeons for scheduled surgery. Since a child who has just received a new liver needs near constant attention, this was no small matter, raising the risk that the child’s vital signs could plummet while the nurse is off caring for other patients."

According to Allen, hospital executives tried several approaches to try and correct this patient flow problem. He reports:

"For several years, Cincinnati Children’s officials, with [Chief Executive James M.] Anderson’s enthusiastic backing, tried to get their patients flowing better through the building. They tried hiring more staff to work in the emergency department at certain times. But Anderson’s team realized that, to make dramatic steps forward, they needed to analyze the whole hospital, not just individual departments. That’s when two doctors, [Frederick Ryckman, a prominent transplant surgeon,] and the vice president for quality and transformation, went to a talk by Litvak as part of an Institute for Healthcare Improvement program in 2004. 'We were just blown away. If what he says is true, oh my God. Isn’t it exciting?' recalled Dr. Uma Kotagal, the vice president. Or, as Ryckman put it, 'He might be brilliant, and he might be nuts.' Litvak, who cut his academic teeth analyzing the Soviet telecommunications industry, may have seemed an unlikely avatar of efficiency, but he had the advantage of not carrying the baggage of medical traditions that can crush the spirit of innovators. And so, armed with a branch of mathematics known as queuing theory, Litvak began to rearrange Cincinnati Children’s Hospital. He told administrators that a lot of the delays throughout the hospital traced back to the lack of control over operating room time. He recommended that some operating rooms be set aside for emergencies only so that scheduled operations would not be disrupted. He also suggested that administrators take charge of assigning times for nonemergency surgeries to spread them out evenly. And he asked that surgeons notify the intensive care unit if their patients would need ICU care after the operation, giving the nurses time to plan. Litvak promised that the efficiency measures would increase the number of surgeries that Children’s could perform with the same resources. Over the next four years, the data proved him right. Cincinnati Children’s estimates that these and other streamlining measures will allow the hospital to generate an additional $137 million in revenue this year from treating more children with the same levels of staffing in surgery and other departments."

Talk about a good return on investment. I'd say that generating an additional $137 million in revenues with same levels of staffing is amazing. I've stressed time and again that getting someone from a different discipline to look at a challenge is a good way to promote innovation. As Allen notes, Litvak had the "advantage of not carrying the baggage of medical traditions that can crush the spirit of innovators." Allen continues to stress the point that culture can crush innovation:

"Dr. Milstein, the director of the Pacific Business Group on Health in California, said hospitals have resisted efficiency ideas because they could. 'It takes a saint to say, "Well, even though the market is not very competitive, I am going to quintuple the level of difficulty for my managers"' by pressing for big efficiency improvements, explained Milstein. There is also a deep cultural reason that 'efficiency' hasn’t caught on in America’s hospitals: Many doctors and nurses just don’t care about 'efficiency' for its own sake. They got into the business to help people, and tend to cringe when administrators start going on about cost-cutting. But Litvak’s work blows up the easy doctors-vs.-bean-counters formulation, showing that the bigger threat to patient safety and medical staff sanity is the current disorganization of American hospitals."

Allen concludes his article by reporting that "some hospitals are taking a harder look at the efficiency lessons from other industries." He notes that "Boston University Medical Center, guided by Litvak, reduced the number of elective surgeries that had to be rescheduled from 700 a year to seven" and, as a result of such successes, "Litvak is gearing up to train far more hospitals in his methods, setting up a nonprofit that will run independently from Boston University’s Program for the Management of Variability in Health Care Delivery." Caring for patients sounds a lot more compassionate than looking for efficiencies; but, as Banker concludes, "Supply chain management matters too." At Enterra Solutions, we believe that our rule set automation techniques can significantly reduce the complexity gap that currently plagues hospital patient flow as well as help with other health care system inefficiencies. That story has yet to be written; so stay tuned.

The Future of Books

Edward P. Morgan once wrote, "A book is the only place in which you can examine a fragile thought without breaking it, or explore an explosive idea without fear it will go off in your face. It is one of the few havens remaining where a man's mind can get both provocation and privacy." The question being asked nowadays is whether it makes a difference if a book is read digitally or the old-fashioned way off the printed page? Like it or not, the popularity of printed books is waning. There was a time when local bookstores and local libraries were magical places that held dreams, adventures, and romances waiting to be discovered. A bit of the romance was lost when mega-bookstores likes Barnes & Noble entered the picture making it difficult for local bookstores to compete. As a result, thousands of mom & pop bookstores went out of the business. Then it became possible to buy books on-line and read books electronically with gadgets like the Kindle, the Nook, and the iPad.

The impact of e-commerce, e-books, and e-readers has been enormous. "Faced with mounting threats from electronic books, online retailers and discounters, some bookstore owners may wonder if they've reached the final chapter. The nation's largest bookstore chain, Barnes & Noble, put itself up for sale this month. And Amazon recently announced a milestone that might bode ill for brick-and-mortar bookstores: As of this summer, Amazon's e-books are outselling its hardbacks." ["Book sellers buck e-trend," by David Kaplan, Houston Chronicle, 12 August 2010]. Another sign that ebooks are here to stay came when Dorchester Publishing Inc., one of the country's oldest mass-paperback publishers, announced that it "is abandoning its traditional print books and making its titles available in digital format and print-on-demand only." ["Publisher Switches to Digital," by Jeffrey A. Trachtenberg, Wall Street Journal, 9 August 2010] Trachtenberg reports, however, that not all publishers are giving up on the printed page.

"Consumer-book publisher Bertelsmann AG's Random House Inc. said it continues to be a strong believer in mass paperbacks. One of the country's most successful mystery writers, the late John D. MacDonald, is available from Random House exclusively in mass paperback. 'It's still a viable, popular, lower-priced alternative to the other reading formats,' said Stuart Applebaum, a spokesman for Random House. 'It also has a committed readership. Will that commitment be forever in a transformative marketplace? We'll have to wait and see.'"

According to L. Gordon Crovitz, "The final chapters in the history of the printed book have yet to be written." ["From Gutenberg to Zoobert," Wall Street Journal, 8 August 2010]. He writes:

"In the hit 1998 film 'You've Got Mail,' Meg Ryan's independent bookstore couldn't compete with the big chain-store competitor. Underdog-rooting moviegoers couldn't have known how lucky the independent stores were, having enjoyed so many decades of being the only booksellers. The megastores, which became dominant in the 1980s, have been undermined by technology in less than a generation. Last week, Barnes & Noble, whose more than 700 stores make it the largest bricks-and-mortar book chain, put itself up for sale. Its market capitalization is less than $1 billion, compared with Amazon's $55 billion. This reflects both the better economics of Web sales of print books and the increasingly uncertain future of print books in an e-book world. The creative destruction in the book business has led even Andy Ross to have some sympathy for Barnes & Noble. Mr. Ross was the owner of Cody's Books, a well-known independent bookstore located near the Berkeley campus of the University of California. Starting in the 1980s, Mr. Ross instigated numerous antitrust and other lawsuits against Barnes & Noble. He owned Cody's Books for some 30 years before competition from the big stores closed it down in 2008. 'The only thing anyone is talking about in the book business is e-books,' Mr. Ross told me last week. 'I see it as being similar to the music industry. There is going to be a tipping point where e-books become the dominant medium, thus ending 500 years of the Gutenberg Age.'"

Of course books go back long before the age of Gutenberg and the printing revolution he started. Books were considered so important in ancient times that Alexander the Great built a library to house the recorded treasures he plundered as he tried to rule to world. That's why I believe people are beginning to feel a sense of loss as they contemplate the end of the print era. Crovitz continues:

"Technology has made the physical scale of Barnes & Noble a liability. Amazon, now the world's largest bookseller, launched the Kindle e-reader less than three years ago and already sells more Kindle editions than hardbacks. Amazon projects it will sell more Kindle books than paperbacks within a year. Apple's iPad, launched just a few months ago, is already a big seller. Google plans its own eBook store. As in other industries, consumers benefit from technological tumult. They get lower prices, greater choice and one-click buying. Amazon can charge less for printed books because it doesn't have retail outlets, inventory, returns, printing or shipping costs. Now, the iPad is pointing the way to a new kind of book. With color and Web access, e-books on the iPad are a new genre. These are called enhanced, multimedia or 'transmedia' versions of books, with video, audio and interactivity."

There's no denying that a person's reading experience can be enhanced by transmedia versions of books. And perhaps, in this age of video games and MTV, they are necessary to attract young people. I have been concerned that the arrival of e-books would eliminate the age-old tradition of parents reading books to their toddlers. Crovitz, however, indicates that he uses his iPad with his young children. He explains:

"In my family, which includes two young boys, the most popular iPad application is Zoobert, a narrated, interactive cartoon about a happy monster who lives in a sock drawer. Kids are instructed to 'shake shake shake' the iPad to help Zoobert decide what to do next. The iPad version of the Dr. Seuss classic 'Green Eggs and Ham' includes clever tools for spelling and reading."

One area where ebooks do make sense to me is education. Textbooks are the most expensive books most people will ever buy and they are required at a time when people can least afford them. Anything that can help improve education and reduce costs makes sense. Scott G. McNealy, co-founder and former chief executive of Sun Microsystems, believes that some textbooks should be free ["$200 Textbook vs. Free. You Do the Math." by Ashlee Vance, New York Times, 31 July 2010]. Vance reports:

"Mr. McNealy ... shuns basic math textbooks as bloated monstrosities: their price keeps rising while the core information inside of them stays the same. ... He has since [invested some of his wealth in] Curriki, an online hub for free textbooks and other course material that he spearheaded six years ago. 'We are spending $8 billion to $15 billion per year on textbooks' in the United States, Mr. McNealy says. 'It seems to me we could put that all online for free.' The nonprofit Curriki fits into an ever-expanding list of organizations that seek to bring the blunt force of Internet economics to bear on the education market. Even the traditional textbook publishers agree that the days of tweaking a few pages in a book just to sell a new edition are coming to an end."

Not wanting to lose any of the lucrative textbook market, publishers are embedding interactive testing and built-in research links in their e-textbook offerings to make the more useful. Travel publishers also making their e-book offerings more interactive. Crovitz reports that digital age publishing is generating new challenges. He explains:

"To those of us who see the technology glass as half full, it's important to note the costs. Lower sales of print books pressure publishers, which usually get lower profits on e-books. This could mean fewer opportunities for aspiring authors until new business models emerge. Just as technology undermined the economics of local newspapers with online alternatives to classified advertising and upended the music industry by de-bundling physical albums into digital songs, it will take time for book publishers and authors to find new revenues. ... Still, Mr. Ross, [former owner of Cody's Books mentioned earlier], now a literary agent, is optimistic. He points to 'new competitive pressure among e-book companies to get better deals for authors.' The multimedia e-book, he says, 'means a lot of potential for creativity,' changing what it means to be a book."

One thing I'm pretty sure of is that the first edition of an e-book will never increase in value. I suspect that genuine book lovers will still want to buy and treasure signed first editions by their favorite authors. At the same time, the digital age is making classics available to millions of people around the world who might never had access to them otherwise (see my posts entitled Books Forever and The United Nations' "Alexandrian Library"). In closing, Crovitz agrees with the Morgan quote with which I began this post. He writes:

"At a time when distracting digital technologies threaten to reduce people's attention span, it may take an evolution in the art form of a book to retain our interest in long-form story telling. Books that combine text with other media could be more informative and perhaps lead to a new kind of literature. It's ideas that count, not how they're transmitted. Independent bookstores gave way to chains, which are fast giving way to Web-based retailers. At least for now, the printed book will live alongside the e-book. These are new pages in the history of the book, whose final chapters are yet to be written."

Because e-readers don't come cheap, it will be a while before e-books overwhelm the market in developing countries. In fact, analyst Michael Norris of the Rockville, Maryland, research firm Simba Information Co., believes it will be a long time before they even overwhelm the market in the United States. In an e-mail, he wrote, "It's cockamamie to think a product like [an e-reader] is going to revolutionize the way most people read, (Americans use e-books at a rate) much, much slower than it looks." ["E-reading: Revolution in the making or fading fad?" by Annie Huang, Washington Post, 20 August 2010]. Another recent story in the Washington Post, discusses the burgeoning English-language pulp fiction market in India ["English-language pulp fiction translates to success in India," by Emily Wax, 16 August 2010]. Wax reports:

"The niche industry's success is fueled by the expansion of India's middle classes, who often read in English. To cater to them, a wave of 50,000-square-foot, air-conditioned English-language bookstores have opened in recent years, complete with cafes and children's play areas. Traditionally, Indians have bought their reading matter from thousands of closet-size bookstores operating in markets across the country or from neighborhood book-wallahs -- salesmen hawking bestsellers at street intersections. ... The success of English-language publishing here reflects the prosperity of the domestic industry as a whole. Books are relatively inexpensive to produce in India, where labor costs are low and cheap recycled paper is widely used. And while many U.S. bookstores are losing business to online or digital alternatives, the Internet has reached only a small percentage of Indian homes. The result has been a new Indian book culture, far broader than the staid math and science textbooks, epic family novels and religious mythology that used to sustain the industry."

Wax's report underscores Crovitz's conclusion that the final chapter of the Gutenberg age has yet to be written. Paul Sweeney once wrote, "You know you've read a good book when you turn the last page and feel a little as if you have lost a friend." If we ever turn the final page of the Gutenberg age, I believe that we will also feel like we have lost a dear friend.

The Importance of Identifying Trends

Scott Cook, a founder and former CEO of Intuit, once stated, "Even some of the greatest technology-led revolutions, or allegedly technology-led, really were only made possible because of trends already present." Michael Schudson, an American academic sociologist, agrees that identifying trends can help businesses succeed. "Advertising," he has stated, "generally works to reinforce consumer trends rather than to initiate them." Peter Bisson, Elizabeth Stephenson, and S. Patrick Viguerie, executives with McKinsey & Company, also believe that identifying trends can be important for businesses ["Global forces: An introduction," McKinsey Quarterly, June 2010]. They write:

"Most business managers, confronted with the global forces shaping the business landscape, also assume that their ability to sculpt the future is minimal. They are right that they can do little to change a demographic trend or a widespread shift in consumer consciousness. But they can react to such forces or, even better, anticipate them to their own advantage. Above all, they ignore these forces at their peril. Business history is littered with examples of companies that missed important trends; think digitization and the music industry. Yet this history also shines with examples of companies that spied the forces changing the global business scene and used them to protect or contribute to the bottom line. Companies ranging from insurers to energy producers did precisely that in embracing the growing social concern about climate change. So did Wal-Mart Stores in applying technology to automate inventory management and reduce costs dramatically for the company and its suppliers. The fact is, trends matter."

Dick Clark, the entrepreneur who started his business empire hosting American Bandstand, understood that trends matter. He once stated, "I don't set trends. I just find out what they are and exploit them." Bisson, Stephenson, and Viguerie argue that all good business people should find out what trends are afoot and exploit them. They continue:

"Systematically spotting and acting on emerging [trends] helps companies to capture market opportunities, test risks, and spur innovation. Today, when the biggest business challenge is responding to a world in which the frame and basis of competition are always changing, any effort to set corporate strategy must consider more than traditional performance measures, such as a company’s core capabilities and the structure of the industry in which it competes. Managers must also gain an understanding of deep external forces and the narrower trends they can unleash. In our experience, if senior executives wait for the full impact of global forces to manifest themselves at an industry and company level, they will have waited too long."

The famous futurist Peter Schwartz calls this "the art of the long view." In his book by that name, he writes:

"To act with confidence, one must be willing to look ahead and consider uncertainties. ... [Those who fail to look ahead] are at a loss for ways to act when upheaval continues. They create blind spots for themselves. Scenarios are a tool for helping us to take a long view in a world of great uncertainty."

Business executives will never be able to accurately predict "the full impact of global forces." That is why they must examine trends, think through scenarios those trends could bring about, and even consider what might happen if current trends suddenly stop. History has a funny way of taking sidesteps just when we're confident we can extrapolate the future from the past. Bisson, Stephenson, and Viguerie continue:

"For much of the past year, a team at McKinsey has revisited and retested our assumptions about the key global trends that will define the coming era. We have identified five forces, or crucibles, where the stresses and tensions will be greatest and thus offer the richest opportunities for companies to innovate and change."

They call their first mega-trend "the great rebalancing." They foresee the rise of emerging markets as one trend that businesses simply can't afford to ignore. They write:

"The great rebalancing. The coming decade will be the first in 200 years when emerging-market countries contribute more growth than the developed ones. This growth will not only create a wave of new middle-class consumers but also drive profound innovations in product design, market infrastructure, and value chains."

Followers of this blog know that I have stressed both the importance and promise of emerging markets for some time. I agree with Bisson, Stephenson, and Viguerie that the decades ahead will only see this trend grow (for more on this subject, read my entitled The Decade of Emerging Markets?). Bisson and his colleagues call their next trend "the productivity imperative." If companies from developed countries hope to keep pace with those from emerging market countries, they are going to have to foster increased productivity. They write:

"The productivity imperative. Developed-world economies will need to generate pronounced gains in productivity to power continued economic growth. The most dramatic innovations in the Western world are likely to be those that accelerate economic productivity."

Recently the U.S. announced that productivity actually decreased; which was not good news for those who believed the U.S. was pulling out of the recession. Although that announcement made a minor ripple in the global economy, emerging market nations continued to forge ahead and put the recession behind them. The next mega-trend identified by Bisson, Stephenson, and Viguerie is labeled "the global grid," a fancy name for the numerous connections that have been forged through globalization. They write:

"The global grid. The global economy is growing ever more connected. Complex flows of capital, goods, information, and people are creating an interlinked network that spans geographies, social groups, and economies in ways that permit large-scale interactions at any moment. This expanding grid is seeding new business models and accelerating the pace of innovation. It also makes destabilizing cycles of volatility more likely."

Although I believe that the benefits of connectivity far outweigh the risks. Nevertheless, the destabilizing cycles of volatility discussed by Bisson, Stephenson, and Viguerie have most recently manifested themselves in the agricultural sector (especially in 2008-2009). I believe that the cycles of volatility can be dealt with better through cooperation than through retrenchment, which could start a round of trade wars that could plunge the global economy back into recession. Next Bisson, Stephenson, and Viguerie discuss "pricing the planet," by which they mean that people will come to realize that abusing the planet comes at a cost. They write:

"Pricing the planet. A collision is shaping up among the rising demand for resources, constrained supplies, and changing social attitudes toward environmental protection. The next decade will see an increased focus on resource productivity, the emergence of substantial clean-tech industries, and regulatory initiatives."

These kinds of initiatives are generally lumped together as "sustainability" initiatives. There was great hope that the rise of cleantech would help pull the West out of the recession, but efforts to promote cleantech have resulted in less than stunning results. Alternative energy programs are only surviving because they are heavily subsidized and they cannot compete with the price of electricity generated by coal-fired plants. Perhaps most discouraging for people in the U.S. is that China has raced ahead in the competition to become a leader in cleantech. The final mega-trend identified by Bisson, Stephenson, and Viguerie is "the market state." Often this phenomenon is called "state capitalism." They write:

"The market state. The often contradictory demands of driving economic growth and providing the necessary safety nets to maintain social stability have put governments under extraordinary pressure. Globalization applies additional heat: how will distinctly national entities govern in an increasingly globalized world?"

To read more about state capitalism, read my posts entitled State Capitalism and Sovereign-Wealth Funds, Job Creation and State Capitalism, and The Rise of Hybrid Companies. Bisson, Stephenson, and Viguerie recognize that predicting the future is difficult and admit that their "thinking is exploratory rather than definitive." They conclude:

"Precisely how these forces will unfold—and, as important, how they interact—is very much a work in progress. Still, our research, extensive one-on-one contacts, and broader survey data give us confidence that these topics should be framing every organization’s strategic conversations about how best to chart its future course. ... We can be certain that this new era will not evolve smoothly. Future economic crises—quite likely, major ones—are inevitable. And management theory for the 21st century, the first with truly global enterprises, is being invented in real time, as thousands upon thousands of companies make it up as they go. What we do know is that the forces driving the emergence of this new world are too powerful to be denied and that running a 21st-century company is exponentially more complex than running a 20th-century one, of any size. Companies must pay attention to more stakeholders, more regulations, and more risks—and watch to see what their customers are tweeting about them. That complexity is greater, but so, we believe, is the opportunity. Even the most talented strategists will have, at best, incomplete knowledge of what comes next. But from our experience, we know that an understanding of the forces defining the future will also provide the best chance for seizing it."

Associated with their article, Bisson, Stephenson, and Viguerie provided a graphic (attached below) that depicts how business executives think about the mega-trends identified above.

I find it interesting, but not surprising, that corporate executives are a lot more concerned about emerging market countries, productivity, and globalization than they are about the environment and state capitalism. In the concluding chapter of his book on dealing with scenario development, Peter Schwartz wrote, "Our fates are interconnected. People have a very hard time grasping these connections because for most of human civilization, the connection was not as important. ... Today the international economic relationships, our impact on the natural environment and the globe-spanning technologies, have made a tangible difference in that old attitude." The trends identified by Bisson, Stephenson, and Viguerie are indeed global trends that have local consequences. Business leaders would do well to conduct some "what if" analysis about how their companies are going to face the challenges ahead.

Entrepreneurship: Of Fear and Faith

Almost everyone who writes about entrepreneurs and the enterprises they start discusses the fact that entrepreneurs are risk takers. Rajiv Dingra, an Indian entrepreneur who is the founder and CEO of WATConsult, a social media agency, wrote an op-ed piece that states that just because someone is willing to take risks it doesn't mean they don't have any fears ["Are You Fearless?" Wall Street Journal, 10 August 2010]. He writes:

"You often hear people saying 'entrepreneurship takes guts.' The reason it’s true is that every successful entrepreneurial story starts with grappling with many unique failures and fears. One of the first questions you need to answer is: Are you one of the rare breed of fearless entrepreneurs? From the time we are born, we were constantly being told how to do things, what not to do and the importance of being careful. Be it the electric switch or the water-park slide, we were cautioned by protective and well-intentioned parents and guardians all the time. We were told that we should study hard so as not to fail. Failure [in India] is considered so bad that some students’ commit suicide under exam pressure every year. This kind of upbringing does something to each and every one of us. It instills fear in our minds. We have a fear of change and a fear of unknown people because we have been taught not to trust strangers. We carry these fears with us as we grow up. We even add more fears to the list following negative experiences."

Not everyone, of course, suffers from the kind of fears mentioned by Dingra. Some parents help children confront their fears and embrace the unknown. Nevertheless, I'm willing to bet that most people have fears they must confront sometime during their life. Dingra writes about some of the unique fears faced by entrepreneurs:

"The First Fears

As a person starts his or her entrepreneurial journey, fears surface from the very beginning. When you are deciding to take the plunge, many of your folks and friends may caution you. They will tell you 'What if' stories, like 'What if something goes wrong?' Some may enlighten you about your family responsibilities and how you don’t have the luxury to be entrepreneurial and so on.

Start Up Fears

If you cross this hurdle and start something, then you will meet colleagues, venture capitalists and other entrepreneurs who will warn you about your business model, your lack of ability and tough market conditions. These too are well-intentioned folks but as they say 'people see what they choose to see.' At this moment you are again likely to succumb to the fear of failure and withdraw the steps you took towards being an entrepreneur.

Scaling Fears

Let’s say you have crossed the above two hurdles. There will still be all kinds of folks, including employees, giving you advice. More often than not, some of it would go like this: 'It’s easy to run a ten-person company dude, when you touch 20 then you will know.' Or 'If your current clients get poached by competition, what will you do then?' Or 'Have you made a three-year plan yet? The way you are going this business may not last very long.' Often the friendly 'advice' is even worse."

Dingra isn't arguing that entrepreneurs should shut out voices that give rise to fears or simply plunge into a business venture with one's eyes closed. In fact, successful entrepreneurs plunge in knowing full well the risks they are taking -- but, because they have their eyes open, they are calculated risks. The antidote to fear, Dingra asserts, is faith. He explains:

"So now that we have identified that fear is the top reason for entrepreneurs to backtrack and avoid greatness we need to discover the opposite of fear. How do I stand up when fear stares me in the face? According to the Merriam-Webster Thesaurus, some of the antonyms of fear are: aplomb, assurance, boldness, confidence, self-assurance, self-confidence, courage, dauntlessness, fearlessness, and fortitude. But I have one that I believe is the real opposite. It’s faith. Faith in oneself, one’s belief, one’s dreams and one’s ability. If you can’t back your own words, actions and abilities, trust me it’s highly unlikely anyone else will."

In previous posts about entrepreneurs, I have noted that one thing most successful entrepreneurs share is confidence in their own abilities. Dingra is correct -- if you don't believe in yourself, why should anyone else? Faith, however, goes one step beyond confidence. Confidence generally results from the belief that one can control events. Faith denotes confidence even in the face of the unknown. Dingra concludes:

"As Chuck Palahniuk famously said, 'Our real discoveries come from chaos, from going to the place that looks wrong, stupid & foolish.' So in conclusion I repeat the question: Are you one of the rare breed of fearless entrepreneurs? Another way of putting it is: Do you have enough faith in yourself?"

There is a fine line between fearlessness and foolishness and that line is easy to cross. To help entrepreneurs from crossing that line, Luke Johnson offers some business do's and don'ts ["Do’s and don’ts to get ahead in the game," Financial Times, 16 June 2010]. Johnson writes:

"When I am interviewed, I am occasionally asked: 'What is the secret of business success?' If I knew the perfect answer, I would have made far fewer mistakes over the years; in truth I suspect there are many ingredients. Nevertheless, as an exercise, I have noted below a number of contributing factors that I think matter more than most."

Johnson begins by noting that business success is often a mixture of hard work and luck. He believes that entrepreneurs can achieve spectacular financial gains or even change the world. But, the greatest reward (i.e., the ultimate satisfaction achieved as a entrepreneur), he believes, is being able to fulfill a dream. The advice he offers next is how best to ensure that hard work will put you in a position to take advantage of any luck that may come your way.

"• Be in the right place. History shows that growing markets, where entrepreneurs are encouraged, offer greater opportunities than places where there is stagnant demand, high tax and lots of regulation. On that basis, anyone with little to lose who is living in the west should emigrate to the east: it’s what I advise anyone under the age of 30 to do. This is a harsh verdict, and inevitably there are thousands of exceptions. But it is undeniable that far more new millionaires and billionaires are being minted in countries such as India and China than in Europe. Growing gross domestic product, expanding populations, low costs and modest tax rates offer a powerful combination that the west simply cannot match."

Johnson realizes that not everyone can emigrate so he offers six more practical do's and don'ts.

"• Learn how to borrow. An ability to find and use debt is a factor in most stories of great wealth. Even if banks are not extending much credit right now, the cycle will turn and eventually they will re-open for business. I was slow to realise the fundamental importance of using debt. Many entrepreneurs overdo it at the top, and end up losing many of their leveraged assets when prices fall. But somehow they rarely go bankrupt, and very often reappear with new bankers in tow when the cycle turns."

Many entrepreneurs turn to angel investors or venture capitalists to get funds rather than going to banks for loans. The reason that Johnson talks about learning how to borrow from banks is because if one goes that route one maintains control over the equity of his or her company -- which is the next subject he discusses.

"• Keep hold of the equity. Do not sell out or dilute too early, but retain ownership if you possibly can. Individuals get rich through capital growth in the value of shareholdings, not through salary or dividends. Often, entrepreneurs give away big chunks of shares early in the project to junior partners; you should do this only if you have no choice – it is better to use other forms of currency if you can – especially since it is unlikely to be highly valued at the beginning."

Banks, however, are not as likely to take a chance on a promising idea as an angel investor or venture capitalist might be. Although I agree that you should hold on to as much equity as you can, don't let your dream die because you are unwilling to share equity with those who can help you achieve your dreams. Johnson continues:

"• Know when to lunge for glory. For most of us in business there come a few great opportunities in life that require a huge leap in ambition and scale. It might be a new factory, a big acquisition, a breakthrough product launch. On these occasions, boldness is required if the transformation is to be successful. Of course, such steps will carry risk as well as reward. But all investment involves downside possibilities – as well as the chance of sunlit uplands. Winners have an intuitive sense of when the time is right to really go for it."

The only advice that I can add is that if your head is too deeply buried your dream you may not see a great opportunity when it presents itself. Most successful entrepreneurs that I know see new business opportunities almost everyday. Their challenge is resisting opportunities that have a small risk/reward potential so that they can take advantage of the kind of opportunities discussed by Johnson. He continues:

"• Build a team. Almost no one makes it on their own. Businesses that do reach the big league do so by hiring excellent managers and having strength and depth among their top people. Great leaders know how to pick the best recruits, and how to delegate and motivate. They are modest enough to realise their shortcomings, and hire colleagues who compensate for those weaknesses."

Johnson continually advises people to work for themselves yet he clearly understands how chaotic and ineffective the world would be if everyone took that advice. I completely agree with Johnson that putting together the best team that you can is one key to business success. I consider myself blessed with the team I have at Enterra Solutions. Johnson continues:

"• Resilience. Constructing a substantial company demands both physical stamina and emotional fortitude. There are likely to be occasions when the prospects appear bleak, and giving up seems the only option. More often than not it is these moments that separate the victors from the rest – because they never despair, and press on when others fade."

On this point, Dingra and Johnson appear to be in total agreement. Although Dingra calls it "faith" and Johnson calls it "resilience," the characteristic that motivates entrepreneurs to press ahead into the dimly lit future is what separates winners from losers. Johnson concludes:

"• Domain knowledge. It generally pays to focus on a particular industry, and truly to understand the technical aspects, the market, the competition, the best people, the margins, the trends and so on in your chosen field. And picking a large sector that is undergoing rapid change increases your odds of making a fortune – such dislocations allow newcomers to take advantage."

I call this looking for white spaces in industry sectors. It's much easier to gain a foothold in an industry sector in a space that is currently unoccupied. Trying to dislodge an established competitor is often a non-starter. In fact, if your offering complements what is already available, all the better. By complementing existing systems, processes, etc. you gain allies rather create enemies.

Mark Victor Hansen once said, "Don't wait until everything is just right. It will never be perfect. There will always be challenges, obstacles and less than perfect conditions. So what. Get started now. With each step you take, you will grow stronger and stronger, more and more skilled, more and more self-confident and more and more successful." I think Dingra and Johnson would agree with me that Hansen's advice is good. Have a little faith.

Language and Globalization

Confucius reportedly wrote, "If language is not correct, then what is said is not what is meant; if what is said is not what is meant, then what must be done remains undone; if this remains undone, morals and art will deteriorate; if justice goes astray, the people will stand about in helpless confusion. Hence there must be no arbitrariness in what is said. This matters above everything." In other words, language and its skillful use matter. Yet, with so many languages spoken throughout the world, the chance of people misunderstanding one another when communicating across cultures is amazingly high. An article in the Wall Street Journal asserts, "New cognitive research suggests that language profoundly influences the way people see the world" ["Lost in Translation," by Lera Boroditsky, 30 July 2010]. Boroditsky is a professor of psychology at Stanford University and editor in chief of Frontiers in Cultural Psychology. If what Boroditsky claims is true, the potential consequences are profound. I believe that most people are struck by the fact that facial expressions reveal a person's emotions in the same way regardless of their race, ethnicity, religion, or culture. As someone once said, "There are thousands of languages in the world, but a smile speaks them all." Boroditsky, however, is asserting that words, unlike expressions, don't necessarily reveal exactly what people are thinking (i.e., the way words are used in a culture can color how people think). She writes:

"Do the languages we speak shape the way we think? Do they merely express thoughts, or do the structures in languages (without our knowledge or consent) shape the very thoughts we wish to express? Take 'Humpty Dumpty sat on a...' Even this snippet of a nursery rhyme reveals how much languages can differ from one another. In English, we have to mark the verb for tense; in this case, we say 'sat' rather than 'sit.' In Indonesian you need not (in fact, you can't) change the verb to mark tense. In Russian, you would have to mark tense and also gender, changing the verb if Mrs. Dumpty did the sitting. You would also have to decide if the sitting event was completed or not. If our ovoid hero sat on the wall for the entire time he was meant to, it would be a different form of the verb than if, say, he had a great fall. In Turkish, you would have to include in the verb how you acquired this information. For example, if you saw the chubby fellow on the wall with your own eyes, you'd use one form of the verb, but if you had simply read or heard about it, you'd use a different form. Do English, Indonesian, Russian and Turkish speakers end up attending to, understanding, and remembering their experiences differently simply because they speak different languages? These questions touch on all the major controversies in the study of mind, with important implications for politics, law and religion. Yet very little empirical work had been done on these questions until recently. The idea that language might shape thought was for a long time considered untestable at best and more often simply crazy and wrong. Now, a flurry of new cognitive science research is showing that in fact, language does profoundly influence how we see the world."

Some analysts have claimed that men and women think differently (e.g., John Gray's assertion that "Men are from Mars, Women are From Venus") and that makes them use language differently. Thomas Hardy wrote, "It is difficult for a woman to define her feelings in a language which is chiefly made by men to express theirs." Boroditsky is saying that language itself can trump gender and genetics. She continues:

"The question of whether languages shape the way we think goes back centuries; Charlemagne proclaimed that 'to have a second language is to have a second soul.' But the idea went out of favor with scientists when Noam Chomsky's theories of language gained popularity in the 1960s and '70s. Dr. Chomsky proposed that there is a universal grammar for all human languages—essentially, that languages don't really differ from one another in significant ways. And because languages didn't differ from one another, the theory went, it made no sense to ask whether linguistic differences led to differences in thinking. The search for linguistic universals yielded interesting data on languages, but after decades of work, not a single proposed universal has withstood scrutiny. Instead, as linguists probed deeper into the world's languages (7,000 or so, only a fraction of them analyzed), innumerable unpredictable differences emerged."

Boroditsky admits that "just because people talk differently doesn't necessarily mean they think differently." However, the more we learn about the mind, the more we come to realize that people do change how they think depending on the culture and circumstances in which they find themselves (for more on this phenomena, read my posts entitled Is Google Rewiring our Brains?, The Amazing Mind, and The Mind -- it is a-changin'). Boroditsky continues:

"In the past decade, cognitive scientists have begun to measure not just how people talk, but also how they think, asking whether our understanding of even such fundamental domains of experience as space, time and causality could be constructed by language. For example, in Pormpuraaw, a remote Aboriginal community in Australia, the indigenous languages don't use terms like 'left' and 'right.' Instead, everything is talked about in terms of absolute cardinal directions (north, south, east, west), which means you say things like, 'There's an ant on your southwest leg.' To say hello in Pormpuraaw, one asks, 'Where are you going?', and an appropriate response might be, 'A long way to the south-southwest. How about you?' If you don't know which way is which, you literally can't get past hello. About a third of the world's languages (spoken in all kinds of physical environments) rely on absolute directions for space. As a result of this constant linguistic training, speakers of such languages are remarkably good at staying oriented and keeping track of where they are, even in unfamiliar landscapes. They perform navigational feats scientists once thought were beyond human capabilities. This is a big difference, a fundamentally different way of conceptualizing space, trained by language."

In a couple of past posts [The Power of Words and The Power of Language], I've discussed how powerful words can be and how important languages are for preserving history and revealing insights about our past. As Ralph Wald Emerson wrote, "Language is the archives of history." Boroditsky's claims make us wonder if we can really understand history from dead written languages if we don't know how those languages made people think. She continues with her story of the Pormpuraawans:

"Differences in how people think about space don't end there. People rely on their spatial knowledge to build many other more complex or abstract representations including time, number, musical pitch, kinship relations, morality and emotions. So if Pormpuraawans think differently about space, do they also think differently about other things, like time? To find out, my colleague Alice Gaby and I traveled to Australia and gave Pormpuraawans sets of pictures that showed temporal progressions (for example, pictures of a man at different ages, or a crocodile growing, or a banana being eaten). Their job was to arrange the shuffled photos on the ground to show the correct temporal order. We tested each person in two separate sittings, each time facing in a different cardinal direction. When asked to do this, English speakers arrange time from left to right. Hebrew speakers do it from right to left (because Hebrew is written from right to left). Pormpuraawans, we found, arranged time from east to west. That is, seated facing south, time went left to right. When facing north, right to left. When facing east, toward the body, and so on. Of course, we never told any of our participants which direction they faced. The Pormpuraawans not only knew that already, but they also spontaneously used this spatial orientation to construct their representations of time. And many other ways to organize time exist in the world's languages. In Mandarin, the future can be below and the past above. In Aymara, spoken in South America, the future is behind and the past in front."

You have to admit that the tale being told by Boroditsky is fascinating, even if you aren't particularly interested in languages. If you are involved in international business or diplomacy, however, you would be wise to become interested. Boroditsky moves from a discussion of space and time to causality:

"English likes to describe events in terms of agents doing things. English speakers tend to say things like 'John broke the vase' even for accidents. Speakers of Spanish or Japanese would be more likely to say 'the vase broke itself.' Such differences between languages have profound consequences for how their speakers understand events, construct notions of causality and agency, what they remember as eyewitnesses and how much they blame and punish others. In studies conducted by Caitlin Fausey at Stanford, speakers of English, Spanish and Japanese watched videos of two people popping balloons, breaking eggs and spilling drinks either intentionally or accidentally. Later everyone got a surprise memory test: For each event, can you remember who did it? She discovered a striking cross-linguistic difference in eyewitness memory. Spanish and Japanese speakers did not remember the agents of accidental events as well as did English speakers. Mind you, they remembered the agents of intentional events (for which their language would mention the agent) just fine. But for accidental events, when one wouldn't normally mention the agent in Spanish or Japanese, they didn't encode or remember the agent as well."

If you ever find yourself in need of a witness following an accident in which the other party was at fault, my recommendation is to find an English speaker who might better remember that the car didn't crash itself! On the other hand, if the accident was your fault, that Japanese tourist who saw the whole thing might be your best friend. Boroditsky explains why it matters how a witness talks about an event:

"In another study, English speakers watched the video of Janet Jackson's infamous 'wardrobe malfunction' (a wonderful nonagentive coinage introduced into the English language by Justin Timberlake), accompanied by one of two written reports. The reports were identical except in the last sentence where one used the agentive phrase 'ripped the costume' while the other said 'the costume ripped.' Even though everyone watched the same video and witnessed the ripping with their own eyes, language mattered. Not only did people who read 'ripped the costume' blame Justin Timberlake more, they also levied a whopping 53% more in fines."

Boroditsky goes on to explain that language can also affect visual and mathematical skills. She explains:

"Russian speakers, who make an extra distinction between light and dark blues in their language, are better able to visually discriminate shades of blue. The Piraha, a tribe in the Amazon in Brazil, whose language eschews number words in favor of terms like few and many, are not able to keep track of exact quantities. And Shakespeare, it turns out, was wrong about roses: Roses by many other names (as told to blindfolded subjects) do not smell as sweet."

If you doubt that last statement, read my blog entitled A Rose by Any Other Name Might Smell as Sweet, but Would It Sell? Consider the Slimehead. Boroditsky asks, "Does the language shape cultural values, or does the influence go the other way, or both?" She writes:

"Languages, of course, are human creations, tools we invent and hone to suit our needs. Simply showing that speakers of different languages think differently doesn't tell us whether it's language that shapes thought or the other way around. To demonstrate the causal role of language, what's needed are studies that directly manipulate language and look for effects in cognition. One of the key advances in recent years has been the demonstration of precisely this causal link. It turns out that if you change how people talk, that changes how they think. If people learn another language, they inadvertently also learn a new way of looking at the world. When bilingual people switch from one language to another, they start thinking differently, too. And if you take away people's ability to use language in what should be a simple nonlinguistic task, their performance can change dramatically, sometimes making them look no smarter than rats or infants. (For example, in recent studies, MIT students were shown dots on a screen and asked to say how many there were. If they were allowed to count normally, they did great. If they simultaneously did a nonlinguistic task—like banging out rhythms—they still did great. But if they did a verbal task when shown the dots—like repeating the words spoken in a news report—their counting fell apart. In other words, they needed their language skills to count.) All this new research shows us that the languages we speak not only reflect or express our thoughts, but also shape the very thoughts we wish to express. The structures that exist in our languages profoundly shape how we construct reality, and help make us as smart and sophisticated as we are."

As you are aware, new words are invented everyday -- especially in the English language. There is a reason that new words are created. Paul Tillich, for example, reminds us, "Language ... has created the word 'loneliness' to express the pain of being alone. And it has created the word 'solitude' to express the glory of being alone." Boroditsky concludes:

"Language is a uniquely human gift. When we study language, we are uncovering in part what makes us human, getting a peek at the very nature of human nature. As we uncover how languages and their speakers differ from one another, we discover that human natures too can differ dramatically, depending on the languages we speak. The next steps are to understand the mechanisms through which languages help us construct the incredibly complex knowledge systems we have. Understanding how knowledge is built will allow us to create ideas that go beyond the currently thinkable. This research cuts right to the fundamental questions we all ask about ourselves. How do we come to be the way we are? Why do we think the way we do? An important part of the answer, it turns out, is in the languages we speak."

I'm interested in language and in the relationships between words because, at Enterra Solutions, we use an ontology to help us map important relationships that make business processes more efficient and effective. Without language it would be impossible to do what we do on behalf of our clients. Language gaffes make us laugh (e.g., Jay Leno continues to draw in an audience with his "Headlines" segment every Monday) and people are often judged on how well they use language. I agree with Boroditsky that language is a gift -- one that is too often underappreciated.

Change and Innovation

In 1927, Werner Heisenberg published his famous uncertainty principle which states "that it is impossible to determine simultaneously both the position and velocity of an electron or any other particle with any great degree of accuracy or certainty. ... The more precisely one property is measured, the less precisely the other can be measured. In other words, the more you know the position of a particle, the less you can know about its velocity, and the more you know about the velocity of a particle, the less you can know about its instantaneous position." ["Uncertainty Principle," Wikipedia]. In more general terms, what Heisenberg claimed was that the simple act of observation affects what is being observed. As a general principle, most people believe that when someone is observed their behavior changes. That's the reason that stores install surveillance cameras and some employers use closed circuit television to watch their employees.

A famous 1924 experiment at the Hawthorne Plant outside of Chicago wanted to discern whether behavior (specifically productivity) would change if working conditions were subtly changed. The study concluded that it did and the change in behavior of employees at the plant became known as the "Hawthorne Effect." Basically, the Hawthorne Effect is a noted increase in production following changes in employee working conditions -- in the initial experiment it was a change in lighting conditions. Over the years, Heisenberg's uncertainty principle has been questioned and last year so was the Hawthorne Effect ["Light work," The Economist, 4 June 2009]. The article reports:

"When America’s National Research Council sent two engineers to supervise a series of industrial experiments at a large telephone-parts factory called the Hawthorne Plant near Chicago in 1924, it hoped they would learn how shop-floor lighting affected workers’ productivity. Instead, the studies ended up giving their name to the 'Hawthorne effect', the extremely influential idea that the very act of being experimented upon changes subjects’ behaviour. The idea arose because of the perplexing behaviour of the women who assembled relays and wound coils of wire in the Hawthorne plant. According to accounts of the experiments, their hourly output rose when lighting was increased, but also when it was dimmed. It did not matter what was done; so long as something was changed, productivity rose. An awareness that they were being experimented upon seemed to be enough to alter workers’ behaviour by itself."

Frankly, that sounds like a reasonable conclusion. The article reports, however, that when data from the original experiment was rediscovered and rigorously analyzed, the so-called Hawthorne Effect is difficult to justify. The article explains why:

"It turns out that idiosyncrasies in the way the experiments were conducted may have led to misleading interpretations of what happened. For example, lighting was always changed on a Sunday, when the plant was closed. When it reopened on Monday, output duly rose compared with Saturday, the last working day before the change, and continued to rise for the next couple of days. But a comparison with data for weeks when there was no experimentation showed that output always went up on Mondays. Workers tended to beaver away for the first few days of the working week in any case, before hitting a plateau and then slackening off. Another of the original observations was that output fell when the trials ceased, suggesting that the act of experimentation caused increased productivity. But experimentation stopped in the summer, and it turns out from the records of production after the experiments that output tended to fall in the summer anyway. Perhaps workers were just hot."

The article concludes, "For something so influential and intuitively appealing, it turns out that the Hawthorne effect is remarkably hard to pin down." Change and how change occurs is of great interest to innovators, whether it occurs at the quantum level of physics or on the production floor of a factory. "Change is at the heart of innovation—no innovation happens without change, and innovation changes the status quo," writes Renee Hopkins. "Understanding how to make change happen, then, is of critical interest to innovators." ["How Change Happens," Bloomberg BusinessWeek, 19 April 2010]. How change occurs and who is responsible for making it happen are questions that continue to fascinate researchers. John Kay writes:

"We despise geeks – but we are also intimidated by them, and they retain a powerful influence on our thinking. When we talk about innovation, we visualise men and women in white coats with test tubes and microscopes. Outside many university cities around the world there are biotechnology estates established by governments that believe high technology is the key to a competitive future. The funds that governments provide to support innovation are all too often appropriated by large companies that are better at forming committees to pontificate about what the global village will want in the future than they are at assessing what their customers want today. ... Pioneers of innovation are routinely pushed aside by competitors whose skills are in the marketplace rather than the laboratory. The invention of the body scanner won a deserved Nobel Prize for EMI’s Geoffrey Houndsfield, but almost destroyed the company. The market for scanners is now shared by Siemens and GE." ["Innovation is not about wearing white coats," Financial Times, 16 December 2009].

Kay makes a good point and it's one that I've stressed in the past. To be considered an innovation, an idea must be new, it must have value to someone (i.e., there must be customers for it), and it must be realized (i.e., brought to market). That is why Kay points to Steve Jobs and Apple as examples of innovation. He writes:

"Apple is the most innovative consumer products company of the last decade. It has redefined how people listen to music, blindsiding both music publishers and established electronics manufacturers. And it has reinvented the telephone. ... Innovation is about finding new ways of meeting consumers’ needs, including ones they did not know they had. Sometimes it comes from a laboratory scientist but, more often, the innovation that changes the business landscape comes from the imagination of a Henry Ford or Walt Disney, Steve Jobs or Sir Stelios Haji-Ioannou [founder of EasyJet PLC]. But understanding the needs of customers is what distinguishes innovation from novelty."

Kay also points out that there can be a difference between supporting research and development (R&D) and supporting innovation. He concludes:

"[Britain's] National Endowment for Science, Technology and the Arts picked up this point. For years research and development scorecards have dutifully recorded how much pharmaceuticals companies spend on the search for new drugs and the expenditure of governments on defence electronics. But a Nesta report, presenting plans for a new innovation index, has now recognised that most of the spending that promotes innovation does not take place in science departments. The financial services industry may have been Britain’s most innovative industry in the past two decades – perhaps too innovative – but practically none of the expenditure behind that innovation comes under 'R&D'. And the same is true in retailing, media and a host of other innovative industries. Support for innovation is not the same as support for R&D. Important contributions to commercial innovation come from new businesses such as Easyjet, which see opportunities that others have missed. Most of these opportunities do not actually exist and the innovations fail. But only a few such entrepreneurs have to be right to change the face of business. Other innovations come from successful companies, such as Apple, which may not be at the frontiers of science but are in close touch with consumers. Like all business success, innovative success is based on matching capabilities to market."

In a post entitled Not All Small Businesses are Created Equal, I noted that only 2 to 3 percent of entrepreneurial companies can be considered superstars -- companies that change industries, have high growth rates, and hire significant numbers of employees. Kay is arguing that superstar companies are those that manage to match innovative success with market success. A task easier identified than achieved. Ade McCormack argues that the companies that will be best positioned to be superstars will be those whose employees have the strongest information technology (IT) skills ["e-Skills can make ideas into innovation," Financial Times, 16 February 2010]. She writes:

"In five years, only 10 per cent of the jobs in the EU will not require IT skills, says a recent study by IDC, a market research and analysis firm owned by Pearson, which also owns the Financial Times. So unless your organisation is either technology-free or people-free, it is likely that e-skills will be relevant to between 90 and 100 per cent of your staff (and your boardroom)."

McCormack tells us that she was "asked to produce a book entitled The e-Skills Manifesto – A Call to Arms." Researching for the book was, she writes, a real "eye-opener." She continues:

"The important point is that these skills are not only needed in the IT department. Increasingly, essential tools for other highly skilled users are IT-based. For example: air traffic control management, predicting the price of corn, or designing cars that cost less than $1,000. With the simplification of technology, and increasing ease of access (via the cloud/internet), the roles of users and technologists will become blurred – thus increasing the likelihood that we will witness the industrial equivalent of the fall of the Berlin Wall. ... Those that choose to remain on the technology side of the divide will need to have sustainable e-skills – the competence needed to develop and maintain systems in an environmentally friendly manner."

McCormack worries that unless society can convince more females to get involved in computer science, the workforce of the future will lack sufficient skilled employees to sustain innovation. She writes:

"The IT industry has done little to attract women. Given that there is a global shortage of skilled workers, it seems ridiculous that we are excluding half the resource pool. This is an issue that needs attention at the primary education level. The truth is that IT skills are increasingly required for work and social inclusion in general. They are fundamentally enabling. This is not enough: e-skills become genuinely useful when they form the basis of innovation – whether this innovation takes the form of greater operational efficiency, heightened customer experiences or simply market domination. In a global market, if you do not have innovation processes in place, you are flying blind. Creative ideas are 10 a penny, genuine innovation is gold dust."

In a couple previous posts [Nerds with Curves and Web Socializing], I noted that members of the fairer sex are increasingly involved in Web 2.0 activities (as users rather than programmers) while males are drawn more often to programming and gaming. McCormack argues that women need to get into programming as well -- and I agree wholeheartedly. She continues:

"Now we have made the link between people and business sustainability – via e-skills and innovation–let us look at what action businesses need to take:

• Ensure the management team understands the role e-skills will play in success;

• Synchronise the HR and IT departments to ensure all staff have the necessary e-skills;

• Put schemes in place to harness the capabilities of minority and excluded groups. Great if it brings good PR as well, but that is not the point;

• Ensure managers are capable of managing a high-tech workforce. Give special attention to those who manage technical staff, as this is traditionally an area of weakness;

• Put processes in place to industrialise innovation in the organisation. This is already quite common in manufacturing, but more often than not is decoupled from the IT function rather than entwined with it.

• Outsource aggressively. Why reinvent the wheel if others can do it better and cheaper? It’s not about headcount.

• Increasingly, students studying abroad are likely to find more interesting opportunities for employment in their homeland, particularly those from India and China. Do what is required to encourage these people to build their career with you rather than your global competitors."

McCormack's comments should cause human resource directors to think about what kind of training will be required in the years ahead as well as what kinds of recruits they go after. If Professor Richard Florida, a professor of business and creativity at the University of Toronto’s Rotman School of Management, is correct, the global economy is ripe for innovation. He "argues that economic bust is usually followed by innovation boom, resulting in better living standards. It is a view that owes much to Joseph Schumpeter’s contention that downturns represent 'creative destruction'." ["How recession can lead to a boom in innovation," by Richard Reeves, Financial Times, 29 April 2010] Reeves' article is a review of Florida's book entitled The Great Reset How new ways of living and working drive post-crash prosperity. With the world "tipped into the worst recession for a generation, [and] with rising unemployment and sovereign debt crises among its woes," Florida argues that we should look forward to a "great reset." This reset "could result in ways of living and working characterised by 'greater flexibility and lower levels of debt, more time with family and friends, greater promise of personal development, and access to more and better experiences'." Sounds great doesn't it? But innovation doesn't occur spontaneously -- it takes innovative people. And who are these people? Reeves gives us Florida's answer:

"Echoing the themes of his book The Rise of the Creative Class (2002), Florida suggests that cities dominated by educated, mobile workers are the future: 'The places that thrive today are those with the highest velocity of ideas, the highest density of talented and creative people, and the highest rate of metabolism.' Part of the new 'spatial fix' will be greater mobility, underpinned by two necessary reforms. First, high-speed rail to link urban areas to form megacities. Fast rail would cut the commute from Philadelphia to New York to half an hour, and Portland, Seattle and Vancouver would become a single labour market. ... The second need is an end to the obsession with home ownership that blights the US and British economies. Florida points out that mortgage lending made the capital markets poisonous, and that the impact of falling house prices has been to trap people in their debt-funded homes. 'The most staggering damage caused by the housing crisis may not be the impact on the financial markets, it may be the long-run competitive disadvantage caused by the inability to relocate the labour force to where the jobs of the future lie,' he says. Florida wants the US government to redirect some of the $230bn of tax breaks for homeowners towards support for the private rented sector. Cities are also the best hope for greener living. Manhattan dwellers have a 30 per cent smaller carbon footprint than their fellow citizens. Four out of five of them travel to work by public transport. Florida also hopes more of us will use one of the inventions of the 'first reset' – bicycles – to get around. Big changes surely do lie ahead after the recent economic crunch. But his conclusions – a world of trains, cities and bicycles – have a nostalgic feel. A rewind, rather than a reset."

I don't claim to know what the future holds in store. As an optimist, I believe it will bring us more good things than bad. Florida is correct about one thing; educated, mobile workers are the future. That mobility may not come via bicycles or high-speed trains (it may come via virtual commuting), but educated workers, skilled in IT, will be critical for every economy that is going to flourish in the decades ahead.

Modern Manufacturing Methods and the Supply Chain

Fellow blogger Stephen Jannise from The Manufacturing Blog recently pointed me to one of his posts that discusses the interconnection between manufacturing and the supply chain ["A Plain English Guide to Modern Manufacturing Methods," 16 July 2010]. In his email to me, Jannise noted that articles about modern manufacturing methods "are often intimidating for certain readers, so I wrote a 'plain English guide' for some of the manufacturing concepts we talk about these days. In particular, I've focused on three strategies: lean manufacturing, Six Sigma, and flexible manufacturing. I've broken down elements of each strategy, like Just-in-Time, DMAIC, and CIM, into tables with descriptions that aren't bogged down with our usual jargon." Jannise is correct to assume that anyone reading or hearing about a sector of human with which they are unfamiliar often finds themselves lost in the acronyms, concepts, and jargon associated with that sector. Jannise does readers a favor by trying to make things a little clearer. He begins:

"Methods of manufacturing – and the manufacturing software that enable them – have changed a great deal since the Ford assembly line, shifting from the rigid, push-oriented production principles of the early 20th century to more flexible, pull principles. If you find yourself wondering what a pull principle is, you’ve come to the right place. Put simply, assembly line manufacturers historically pushed mass production ahead based on estimates of future demand, which often resulted in wasted effort and resources when customers failed to produce the estimated demand. Modern companies can’t afford this kind of waste, so they wait for actual demand to pull production forward, manufacturing products when they’ve been requested by customers or when the previous batch of products has sold out. Consider this analogy. By trying to guess potential demand, manufacturers often found themselves in the same situation as someone carrying an umbrella on a sunny day because the forecast predicted rain: extra effort for no reason. Modern manufacturers prefer to stick their head out the window and check for rain before grabbing their umbrella, so to speak, limiting waste and maximizing efficiency."

For a more in-depth look at demand-based supply systems, read my post entitled Demand Driven Supply Chains. As I note in that post, getting a demand-driven system right is not easy because the factors that can affect such a system are numerous and complex. Jannise next turns to the subject of complexity -- complexity of subject as well as lingo.

"Understanding the many complex strategies behind these new manufacturing methods can be as difficult as predicting the weather, as they have brought along with them a series of three-letter acronyms that dominate jargon-filled conversations about current manufacturing trends, like JIT, TPM, QRM, and JIS. These letters don’t exactly help to explain the basic ideas behind pull-production manufacturing, which actually make a lot of sense when spoken in plain English. So for the next installment in our 'plain English guide' series, we’ve decided to break down the key concepts of lean manufacturing, Six Sigma and flexible manufacturing. While we couldn’t cover every concept – a Google search for 'lean manufacturing glossary' should satisfy most pedants – we have reviewed the important terms. ... Let’s get started."

Like Jannise, I believe that the best place to start is with the basics. He does a good job of reminding us about the basics of manufacturing.

"Basically, modern manufacturing methods boil down to three key concepts:

• Reduce waste - reduce the amount of materials, capacity and manpower wasted in the process by producing just enough product to meet current demand
• Maintain quality – devise more effective manufacturing methods in order to continue making quality products despite strict reductions of waste
• Accelerate production – decrease the amount of time needed to manufacture product, making up for the lack of surplus"

Keeping in mind that strategies aimed at achieving those goals must be executed simultaneously, Jannise discusses them in turn beginning with reducing waste.

"If this first concept sounds like the motto of the recycling movement, it’s because manufacturing, like so many other industries these days, is basing its methods on efforts to avoid waste. Earlier manufacturing methods allowed for waste and an excessive consumption of supplies in order to meet their goals of mass production, but the re-branding of modern manufacturing goes by a new name: lean manufacturing. Lean manufacturing describes the method used to achieve all three of the aforementioned concepts; in theory, a lean manufacturer would have the right supplies arrive at the right place at the right time in the right amount to create only the products that are necessary to meet demand. A number of concepts, defined in the table below, are influential in meeting this goal."

Jannise next turns his attention to the subject of quality. As anyone who had access to the media this past year knows, Toyota, a company that helped define high quality, suffered a terrific blow to its reputation because it let quality control on some of its automobiles slip in its search for profits.

"In order to manufacture a product of consistently high quality, it’s necessary for manufacturers to not only perform frequent maintenance on their equipment, but on their entire process as well. This means identifying errors or defects in the production flow and eliminating them to maximize productivity. This is where Six Sigma comes in. The origin of the term itself is very complex. A manufacturing process is given a sigma rating based on the percentage of its product yield determined to be defect-free. A one-sigma rating designates a process with a disastrously low percentage of defect-free yield, 31%, while a six-sigma rating is reserved for processes that are nearly perfect, 99.99966% defect-free. In other words, every company wants to achieve six sigmas for all of its manufacturing processes. To meet this goal, the Six Sigma method was created, which focuses on measuring and analyzing process data in order to find and remove defects. Whereas lean manufacturing is concerned with improving the flow between processes to reduce waste, manufacturers use Six Sigma to improve the processes themselves. The table below includes some of the concepts that make Six Sigma work."

In conclusion, Jannise turns his attention to production processes. He writes:

"In the era of lean manufacturing, when surplus product is considered waste, the manufacturing process must work faster to make sure products are made available and demand is met. However, speeding up the process has become more difficult than ever due to an increased customer desire for customization. In the 20th century, mass production and mass consumption went hand in hand. Assembly lines made it possible to make hundreds of thousands of the same product, and customers were entirely willing to own the exact same thing as their friends and neighbors. Now, with the advent of Internet shopping and its capacity to provide shoppers with a variety of choices, manufacturers must be prepared to adapt and change not only its products but its entire process as well. Enter flexible manufacturing. Though manufacturers would undoubtedly prefer to continue producing standardized products at low costs, they must nevertheless make the best of their customers’ new tendencies toward individualized, unique products. These manufacturers can limit their cost increases by designing processes that adjust quickly and effectively to change. This table provides a few of the concepts that allow manufacturers to remain flexible while continuing to reduce waste and maintain quality."

In the personal electronics business, where new products make old ones obsolete very quickly, it is especially critical to be able to control inventories and change manufacturing processes rapidly. As Jannise notes, consumers have become a volatile variable that was once considered rather static. Jannise concludes:

"With customer demands shifting constantly on a global scale, manufacturers must utilize a number of strategies to maximize their profits and continue to compete. As this guide suggests, the three major goals of reducing cost, maintaining quality, and accelerating production are achieved through the combined efforts of lean manufacturing theories, Six Sigma methodologies, and flexible processes. It’s not a question of which manufacturing method is the right one, it’s a question of how to implement them all for optimum results."

To implement strategies effectively, manufacturing teams and Sales & Operations Planning teams must be aligned. As I noted in my post on demand-driven supply chains, there are three essential characteristics that Sales & Operations Planning teams must possess. First, a company must have access to good data. Good data is the sine qua non of a demand driven supply chain. In today's fast-paced marketplace, that data must also be fresh (the closer to real-time the better). Second, a company must have a good forecasting system. Such a system helps the bottom line by mitigating the ill effects of market volatility -- especially during economic hard times. Finally, a company must also involve itself in some "what if" planning. One cannot plan for the future simply by extrapolating from the past. The future has a funny way of jumping sideways and surprising us with twists and turns.

Not All Small Businesses are Created Equal

I have written a number of posts that have asserted that entrepreneurs are critical to help grow America's economy and reduce unemployment. The real entrepreneurial heroes are those that create high growth companies that provide employment for people beyond the entrepreneurs, their families, and a handful of others. These are the so-called small business superstars ["Small businesses: Measuring their power and their problems," by Edmund L. Andrews, The Fiscal Times, 1 August 2010]. Andrews reports that these superstar firms "constitute only 2 or 3 percent of the nation's companies." The majority of small businesses, he writes, "are mom-and-pop operations -- hair salons, restaurants, bookkeepers, car repair shops -- that grow slowly and shed about as many jobs as they create." Even so, Andrews admits that "small businesses are a crucial source of jobs, employing about half of all workers, according to the Bureau of Labor Statistics." The point that Andrews is making is that if politicians want entrepreneurs to help America innovate its way out the current economic malaise, they need to find a way to help the 2 to 3 percent of small businesses that hold the potential of creating the most jobs. One would think that this "biggest bang for the buck approach" would appeal to both sides of the political aisle. So who are these superstar companies? Andrews explains that historically they are hard to define:

"The superstars came in all shapes and sizes. They included legions of tiny companies with fewer than 20 workers. Those firms generated about one-third of the new jobs, according to the study. About 43 percent of the jobs came from corporations with more than 500 workers, and another 24 percent came from firms with 20 to 500 workers. Not surprisingly, companies with gangbuster growth defy easy stereotypes. Although some were high-tech start-ups such as Google, most had been around for years before they took off. The average 'high-impact'' company was 25 years old. That doesn't mean small companies aren't a big pillar of the job market. Whether or not they grow rapidly, companies with fewer than 250 workers provide almost half of all private-sector jobs, according to the Bureau of Labor Statistics. About 38 percent of all workers are in companies with fewer than 100 employees. When those companies shed jobs, as they have in droves over the past two years, the losses have a big impact on overall employment."

The fact that pinning down exactly what constitutes a superstar (other than a high growth rate) makes targeting policy decisions that support them extremely challenging. As a result, policymakers resort to more general approaches. For example, Andrews reports that "a bill pending in Congress would create a $30 billion small-business lending fund, add new tax breaks and expand loan guarantees from the Small Business Administration." Andrews explains why this broad approach for supporting small businesses appears to be required right now:

"Analysts say small businesses suffered disproportionate harm in the downturn, in part because banks couldn't or wouldn't make as many loans. Small companies were among the first to resume hiring after the recessions of the early 1990s and 2001. Not this time. Although the economy has added about 600,000 private-sector jobs this year, surveys of small-business owners indicate that, as a group, they have barely begun to hire. In recent monthly surveys by the National Federation of Independent Business, small-business owners have been about as bleak as at any time since the surveys were started in 1986. And in a July survey by the National Small Business Association, 41 percent of companies said they couldn't raise as much money as they needed -- the highest share in 17 years, according to the trade group."

Despite the apparent problem, neither Congress nor the voting public seems to be in much of mood for funding a new program that risks running up the federal deficit. Both Democrats and Republicans recognize the credit problem, but they differ on what to do about it. Andrews continues:

"Supporters say the $30 billion fund, which would invest in small community banks, would allow the banks to leverage the money and make almost $300 billion in additional loans. The Congressional Budget Office has estimated that the fund would not cost the government in the long term, as the banks repay the Treasury Department with interest. ... The new money could make a real difference, but only if the community banks actually use it. Much will depend on the economy itself. Loan volumes actually declined after the Treasury poured money into banks under the Troubled Assets Relief Program, in part because the recession reduced profitable lending opportunities. The bill does try to prod banks into lending. Banks that step up their pace will be allowed to repay the government at much lower interest rates than banks that stay on the sidelines. ... But critics say the real problem isn't a shortage of capital but a shortage of healthy borrowers. In the National Federation of Independent Business's July survey, although nearly half said they couldn't get enough credit, only 6 percent of business owners said that was their biggest problem. By contrast, 30 percent said their biggest obstacle was weak sales. Many small-business owners lost creditworthiness as they struggled in the downturn. Plunging property values have made it harder for entrepreneurs to use homes or commercial property as collateral."

Some small business owners, Andrews reports, are caught in a Catch 22. He explains:

"Bill Owens, founder of Education Solutions in Shelby, N.C., provides a case study in the murkiness of the lending equation. Owens, who developed a cheap way to provide whiteboards to cash-strapped schools, said he has a backlog of orders. But because his credit rating has slipped in the past two years, he can't get loans to stock up on materials. ... Carmen Ortiz Larsen, founder of Bethesda-based Aquas, is reluctant to ask her bank for more credit. Aquas, which provides engineering and information technology services, has 32 employees. Larsen said she would like to expand but worries that asking for a bigger loan could prompt her bank to question her existing credit lines."

Andrews indicates that even "small-business lobbying groups disagree about what to do." He reports that ""the National Small Business Association, which says it represents 150,000 small firms," supports the measure before Congress, while "the National Federation of Independent Business, which says it represents about 300,000 businesses, has been lukewarm." The real problem, Andrews states, is not lack of credit but "the lack of sales and customers." The rub, of course, is that customers and sales won't increase until the unemployment rate goes down and people can start spending again. It is becoming ever more evident, however, that counting on established companies to begin hiring back employees they have laid off is like hoping the Cubs will win the World Series. "According to a survey of 6,200 companies conducted by KPMG International," even though "U.S. executives are increasingly optimistic about their companies' revenue growth over the next year," most of them have "modest expectations for hiring" ["Hopes for a Rebound Show a Modest Increase," by Joe Light, Wall Street Journal, 2 August 2010]. That's why finding a way to support high growth rate superstar firms is so important. Helping them to get established or to sustain their high growth rate would have the greatest impact on the economy and on reducing the unemployment rate.

Is America Undergoing a Creativity Crisis? Part 3

This is the final post in a series dealing with creativity -- specifically, in America. The first post (Part 1) discussed the fact that the average creativity quotient (CQ) of America's children has been falling since around 1990 and looked at the potential negative consequences should such a decline continue. The second post (Part 2) examined some suggestions about how to increase one's ability to think creatively. This final post examines some ideas on the importance of imagination as discussed by Timothy Williamson, the Wykeham Professor of Logic at Oxford University, a Fellow of the British Academy and a Foreign Honorary Member of the American Academy of Arts and Sciences. ["Reclaiming the Imagination," New York Times, 15 August 2010]. Williamson writes:

"Imagine being a slave in ancient Rome. Now remember being one. The second task, unlike the first, is crazy. If, as I’m guessing, you never were a slave in ancient Rome, it follows that you can’t remember being one — but you can still let your imagination rip. With a bit of effort one can even imagine the impossible, such as discovering that Dick Cheney and Madonna are really the same person. It sounds like a platitude that fiction is the realm of imagination, fact the realm of knowledge. Why did humans evolve the capacity to imagine alternatives to reality? Was story-telling in prehistoric times like the peacock’s tail, of no direct practical use but a good way of attracting a mate? It kept Scheherazade alive through those one thousand and one nights — in the story. On further reflection, imagining turns out to be much more reality-directed than the stereotype implies. If a child imagines the life of a slave in ancient Rome as mainly spent watching sports on TV, with occasional household chores, they are imagining it wrong. That is not what it was like to be a slave. The imagination is not just a random idea generator. The test is how close you can come to imagining the life of a slave as it really was, not how far you can deviate from reality."

This series of posts on creativity is not about how to live in a fantasy world; rather, the series is about how individuals can help recapture the creative spark that made America great. Williamson's last sentence is the key. Imagination is required to help creative thinkers come up with solutions that work in the real world -- not the world of fantasy. In Part 1 of this series, Po Bronson and Ashley Merryman reported that many people who grow up to be innovative geniuses created paracosms -- fantasies of entire alternative worlds -- during their childhood. They were able to transfer this ability to imagine successfully from addressing challenges in a fantasy world to challenges in the real world. Williamson continues:

"A reality-directed faculty of imagination has clear survival value. By enabling you to imagine all sorts of scenarios, it alerts you to dangers and opportunities. You come across a cave. You imagine wintering there with a warm fire — opportunity. You imagine a bear waking up inside — danger. Having imagined possibilities, you can take account of them in contingency planning. If a bear is in the cave, how do you deal with it? If you winter there, what do you do for food and drink? Answering those questions involves more imagining, which must be reality-directed."

In several past posts, I have discussed the benefits of "what if" analysis and alternative future exercises. Williamson's musings about the cave and a bear fall into just those kinds of exercises. He continues:

"Constraining imagination by knowledge does not make it redundant. We rarely know an explicit formula that tells us what to do in a complex situation. We have to work out what to do by thinking through the possibilities in ways that are simultaneously imaginative and realistic, and not less imaginative when more realistic. Knowledge, far from limiting imagination, enables it to serve its central function. To go further, we can borrow a distinction from the philosophy of science, between contexts of discovery and contexts of justification. In the context of discovery, we get ideas, no matter how — dreams or drugs will do. Then, in the context of justification, we assemble objective evidence to determine whether the ideas are correct. On this picture, standards of rationality apply only to the context of justification, not to the context of discovery. Those who downplay the cognitive role of the imagination restrict it to the context of discovery, excluding it from the context of justification. But they are wrong. Imagination plays a vital role in justifying ideas as well as generating them in the first place."

If you read Part 1 of this series, you will recall the story of schoolchildren attending the National Inventors Hall of Fame School, a new public middle school in Akron, Ohio, who were asked to come up with and implement solutions for making the school's library a quieter place to study. They followed the course of discovery and justification just described by Professor Williamson. He continues:

"Your belief that you will not be visible from inside the cave if you crouch behind that rock may be justified because you can imagine how things would look from inside. To change the example, what would happen if all NATO forces left Afghanistan by 2011? What will happen if they don’t? Justifying answers to those questions requires imaginatively working through various scenarios in ways deeply informed by knowledge of Afghanistan and its neighbors. Without imagination, one couldn’t get from knowledge of the past and present to justified expectations about the complex future. We also need it to answer questions about the past. Were the Rosenbergs innocent? Why did Neanderthals become extinct? We must develop the consequences of competing hypotheses with disciplined imagination in order to compare them with the available evidence. In drawing out a scenario’s implications, we apply much of the same cognitive apparatus whether we are working online, with input from sense perception, or offline, with input from imagination. Even imagining things contrary to our knowledge contributes to the growth of knowledge, for example in learning from our mistakes. Surprised at the bad outcomes of our actions, we may learn how to do better by imagining what would have happened if we had acted differently from how we know only too well we did act."

By this point in the discussion, I'm hoping that few if any readers doubt the importance of imagination for coping with real problems in everyday life. Yet we subtly (and sometimes bluntly) do things that inhibit people from using their imaginations. We tell them to "get real" or label them as "dreamers." Williamson continues:

"In science, the obvious role of imagination is in the context of discovery. Unimaginative scientists don’t produce radically new ideas. But even in science imagination plays a role in justification too. Experiment and calculation cannot do all its work. When mathematical models are used to test a conjecture, choosing an appropriate model may itself involve imagining how things would go if the conjecture were true. Mathematicians typically justify their fundamental axioms, in particular those of set theory, by informal appeals to the imagination. Sometimes the only honest response to a question is 'I don’t know.' In recognizing that, one may rely just as much on imagination, because one needs it to determine that several competing hypotheses are equally compatible with one’s evidence. The lesson is not that all intellectual inquiry deals in fictions. That is just to fall back on the crude stereotype of the imagination, from which it needs reclaiming. A better lesson is that imagination is not only about fiction: it is integral to our painful progress in separating fiction from fact. Although fiction is a playful use of imagination, not all uses of imagination are playful. Like a cat’s play with a mouse, fiction may both emerge as a by-product of un-playful uses and hone one’s skills for them."

Williamson concludes, "Much remains to be understood about how imagination works as a means to knowledge — but if it didn’t work, we wouldn’t be around now to ask the question." Albert Einstein, a man known for his vivid imagination in the realm of theoretical physics, once said, "Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand." The key turning around the declining CQ trend of American children is to learn how to tap their imaginations by getting them to confront real world problems. We can make the world a better place. Imagine that!