Category: Innovation & Business Culture

Ralf HallerRalf Haller May 27, 2013

When Europe meets Silicon Valley

Today I had a good laugh when reading a great article in the Frankfurter Allgemeine Zeitung about the German economy Minister’s visit with some German startups to the Silicon Valley. Here a sample:

Auf ihrer medial entweder ignorierten oder aber behämten Reise ins Silicon Valley haben Philipp Rösler und seine deutsche Start-up-Delegation mehrere wertvolle Erfahrungen gemacht. Eine davon kennen die meisten Kinder aus dem Sandkasten. Da sieht man an einem Tag zu, wie die großen Jungs Ritter spielen und sich mit selbstgeschnitzten Schwertern die Köpfe einschlagen, aber wenn man am anderen Tag dann mit dem von Mutti in aller Eile gekauften Plastikschwert und Helm dasteht, um mitzuspielen, muss man feststellen, dass inzwischen alle Cowboys oder Indianer sind.

So why is there such a great gap between the Silicon Valley and the startup scene in Germany or many other European clusters? I list a few points here that I saw during the five years I spent there:

  • venture capital with real money
  • lawyers who understand the startup business (I doubt you will find anyone in Europe), great universities (here we have good ones too, but only few professors understand startups)
  • entrepreneurs (this is a chicken and egg problem; without the money and the other things fewer entrepreneurs will be willing to hop jobs until they find their fortune)
  • labour laws (most European countries find loopholes but in general there is no setup for risky ventures)
  • exit possibilities: try to copy the stock option model that all Silicon Valley startups have in Europe and you will find yourself spending more money on HR and legal advisors than on your product
  • real estate: I suppose Berlin and others have found solutions to this one, but of course size and flexibility are from a different planet in Silicon Valley (you do not have to sign 5-year contracts)
  • successful startup managers (many who had a successful startups before are ready to manage new startups)
  • venture capitalists with not only a lot more money than anywhere else in the world but also with much more competency than anywhere else
  • brand: Silicon Valley is a brand, no doubt
  • it’s the weather: yes, no joke, sunshine all year around creates more of the spirit for venturing and trying out new – risky – things; that is simply a fact
  • it’s the multicultural spirit, where else do you find so many Asians, Latinos, Indians, Europeans, Americans all working in one place?
  • work culture: job-hopping is the norm and not abnormal, period.
  • attitude to risk: failure is normal and necessary to have success one day; no-one will have any problems with a CV where you have been working at 5 places in 5 years
Now is there hope for others going to the Silicon Valley for a similar trip? Yes there is and it’s both simple and difficult. You need to think the way the folks there do and answer one key question: “What is in it for me?” I suppose Philipp Rösler and his crew did not do that, and if they did, only found the wrong answers… good news for them though: you can try again, they will forgive or not remember you. Times are changing too fast to think about what someone did wrong in the past.

Ralf HallerRalf Haller June 5, 2011

The “new” Chinese opportunity – and THREAT

This last week I came across twice when people talked about China and how it booms, how it will be soon the leading economy in the world and how great it is to invest there and do business there.

One of these China lover encounters was on Swiss TV where they showed a student group from St. Gallen Fachhochschule visiting China and doing some business research work for Swiss companies who are investing and doing good business in China. All of the managers of these Swiss companies and the professor of the St. Gallen Fachhochschule had this excitement in their eyes.

I was in China more than ten years ago for about two years and did lots of business then at a time where all of the excitement that these students now talked about was built up from scratch. Shanghai was full of bikes (they are now banned) and there was only one tube line partly finished and in use. Pudong area had the Pearl Tower already but nothing else. They started tearing down the settlements and relocating the people to some other places. People said there were more construction cranes in Shanghai alone than in all of North America. Hard to believe but I think this was indeed true.

Now more than ten years later it is a bit funny to see these managers, professors and students talk about China as if they discovered anything new. Of course excitement is good and one should not argue with it. But the point I want to make here is that what more than ten years ago was quite obvious would happen and is happening now, China becoming the world economic power, one has to deal with what that will mean as well.

I am for some of my clients facing stiff Chinese competition leading to consolidation of entire industries. The mobile infrastructure market has changed forever and two Chinese companies, Huawei and ZTE (plus 2-3 others who are als coming up but hardly anyone ever heard of)  are taking over this high-tech industry by storm. Results: Siemens sold out to Nokia what is now still called Nokia Siemens, Alcatel merged with Lucent, Motorola sold to Nokia Siemens and Ericsson still enjoys protectionism in the US winning a 6 billion USD LTE deal with Verizon Networks against Huawei offering it for less than half because of US politicians being afraid of Chinese companies possibly controlling an important American infrastructure. Of course that is nonsense, but – lucky for Ericsson still – is what happened. It won’t happen again though.

Now back to the Swiss managers, professors and students: the exact same will happen to all of these companies and all of these industries will be dominated by Chinese. Difference will be though that it will happen even faster.

For clients I have to now compete with these Chinese so have quite changed my attitude as I know it is not easy. Strange I find though that all these other industries do exactly the same and do not see the short and mid-term dangers on the horizon. Or if they see it do not want to think about it as they enjoy the current ride too much. The industries that were shown on TV will be much easier to copy and dominate in fact than the mobile infrastructure. They require much less technology and are much easier therefore to copy. So what will happen to all of them? Once they transferred the know-how, stiff competition will arise and they will import the same back to Europe and the US for less than half the price.

I think it is time now to think about this and be aware of it. Most importantly do not fall into the same trap that others already fell into. The only way to compete – I am convinced – is by being creative, innovative and by including all stakeholders in the innovation process. This requires new ways of collaboration and company cultures. We should have it easier to do that than the Chinese I would think, which still has to be proven though and maybe also here they are faster than we are…

Ralf HallerRalf Haller May 6, 2011

For best results forget the bonus in any idea management program

I am still puzzled to experience in practically all meetings where we talk about running idea management programs how deeply entrenched the common believe is that people need BONUSES to do anything good at all for the company or organization.

When I confront them with the fact that since now more than 40 years field research has shown and you can read in two dozen (by now probably three dozen) books that it has been scientifically proven that monetary incentives do not work and this is true in any circumstance mostly in areas where you look for creativity so in idea management projects, they have a hard time believing.

Alfie Kohn has already in 1992 summarized this nicely in the New York Times and also in a Harvard Business Review article Why incentive plans cannot work. The German business management guru Rheinhard Sprenger just wrote about it in a bestselling book “Mythos Motivation” and copied Alfie Kohn’s article practically unchanged and word by word even (albeit in German). Even when you confront people with these facts they remain sceptical. This should not surprise me though thinking about it some more since entire companies are doing this bonus/incentive practice forever and being told that this does not work is hard to believe for them as it turns their common thinking upside down.

Now one can make mistakes, many of them if you try out lots of new things frequently, that is normal and even good as we learn from mistakes the most. But to continue with something that cannot work and that you were told so is for sure wrong should have in my opinion consequences for the people still doing this or not changing anything at all about it. By closing your eyes you approve that this is done wrong and make yourself responsible as well.

Ralf HallerRalf Haller April 14, 2011

How intelligent is your company?

This is not a silly question but one that is key for any organization that has to compete for business in their product markets. Questions that come up are:

Do you actually know how to measure your innovativeness?

One way to e.g. measure how your innovation management is handled is to use the free IMPROVE benchmarking process which looks at 5 dimensions. (I am an IMPROVE Guide and can assist you in filling out and analyzing the strengths and weaknesses if you like, this is a free of charge service as well from us)

What is intelligence for your company in the first place?

  • Ability to produce optimal solutions to important and difficult problems
  • No matter whether this is for a company or for an individual
  • The intelligence of a company is not just the average IQ of the workforce
  • Company intelligence is how the workforce generates and shares innovation
Now to do this is in a systematic way over a longer period of time and not have all your managers and key employees run through time-consuming and expensive workshops where they learn how to communicate for innovation better, a software solution such as the one we can offer with particpation rates of 70-90% among all our clients is needed. Any solution that does not deliver such participation rates should let you ask: why not? Usability and ease-of-use are key. You do not want to start another ERP-like integration project that lasts a year or so with high-risk and big investments… This is not needed with our solution. We focus on the delivery of the bottom line results, which are how to use the software to create new ideas and innovations in your organization effectively and with lasting results.

Ralf HallerRalf Haller April 6, 2011

Presentation at Personal Swiss 2011

Today I had a somewhat funny experience speaking in front of a small (15-20) group of people on idea and innovation management at the Personal Swiss 2011 event.

Why was this strange? Well, just one hour before, there were a few hundred people attending a very boring Social Media in HR discussion moderated by a Swiss TV moderator. In retrospect I had to laugh as Social Media is from a news perspective old stuff and the things that they discussed and hundreds of people listened to is somewhat 2-3 years – at the least – old. I would not have dared to ask such questions as the TV moderator did and for sure would not have expected that anyone would be really still interested in this at all.

So what does that mean at the end? Firstly, the HR managers in Switzerland are at the least 2-3 years behind trends that originate from the US. This by itself is not a critique but simply reflects also the Swiss mentality which is to look at things very carefully first and only once well reflected start to do it. Then of course they do it very comprehensively. And secondly the topic of idea and innovation management will need another 2-3 years before it draws the same crowd – in HR. By then I am sure lots of the consultants there and keynote speakers will have it on their agenda. One of the keynote speakers I heard from people attending his talk already dared to put his toes into the water. Dr. Arnold said:

„Nutzen Sie die Intelligenz der Vielen! Denn eine Gruppe mit den besten Mitarbeitenden eines Unternehmens ist immer intelligenter als der Klügste aus ihrer Mitte.” (Use the intelligence of the crowds! Because a group of the best employees of a company is always more intelligent than the most intelligent individual among them.)

Here the link to my yesterday’s presentation (in German) at the Personal Swiss 2011 event in Zurich:

BVW vs. Ideen- und Innovationsmanagement

(BVW: Betriebliches Vorschlagswesen)


  • Kritik am “BVW”
  • Geht es auch anders?
  • Ideen- und Innovationsmanagement
    • Grundprinzipien
    • Zutaten fuer eine erfolgreiche Implementation
      • Ideen Management Software mit hoechster Userakzeptanz
      • Professionelles Coaching
    • Organisations Kulturen (China, Westen, “Google”)
    • Referenz Beispiele
    • Userakzeptanzraten
    • Fazit: was braucht es fuer ein erfolgreiches Ideen und Innovationsmanagement ?
  • Umfrage – ZWISCHEN – Ergebnisse “BVW in der Schweiz”

Ralf HallerRalf Haller

Online survey Idea Management in Switzerland

Since January 2011 we run a survey among HR managers of largest Swiss organisations asking them questions on how they do idea management. As a basis for this online survey we took the claims from the German management book author Reinhard Sprenger “Mythos Motivation”. He compares the old traditional  ”BVW” (Betriebliches Vorschlagswesen) with modern creative idea and innovation management in a table. The first set of questions of our online survey takes these claims and asks the survey participants if they agree with Sprenger’s claims or not. After 34 HR managers of large Swiss organisations have filled out our survey we show the results below. If you would like to obtain the full report you have to apply with us at and if your company is among our target group we will send you an invitation.

Ralf HallerRalf Haller March 11, 2011

European Innovation Management Benchmarking Database

I attended a training to become an IMP3rove Guide three weeks ago. IMP3rove is a program financed by the EC attempting to teach SMEs how to better approach innovation management. At the core is an online survey that is based on the A. T. Kearney’s house of innovation and looks at 5 innovation dimensions (innovation strategy, organization&culture, life cycle, enabling factors and results). The real advantage of this survey is the fact that you can rank yourself against the other companies who did the survey already (3000 so far) and get a feeling for where you stand in relation to the average and the top 10%. Reports are generated automatically after you have answered the 43 questions and can be generated selecting different criteria such as industry, age of companies, country origin and size.

I think this is a very vaulable exercise not only for SMEs but also for larger corporations and should be done just before you start addressing innovation management issues so that you can check if the measures you undertake show results 12 months later when the system invites you to do another survey.

The benchmark is free of charge and also totally anonymous. Only you will see the reports and data, noone else. It is recommended though you do the survey with an IMP3rove Guide like myself. That way it is faster and most importantly you will have the support after the reports have been generated in analyzing the results. A workshop is conducted then where the consultant shows a SWOT analysis and works out recommendations on what could be done to improve things.

There were a few critiques so far that I heard about this program and that I would like to address now:

  • too theoretical for SMEs: I think this is not the case. the infos asked in the survey is available for any company who is in business a few years and spending about 2hours on this is absolutely worth the time based on the value you obtain. at the least what one gets is a nice status report and a possibility to reflect things in innovation management in a very structured way. I think though that medium sized companies up to a few thousand employees should also do this benchmark and would gain a lot too, so not only SMEs.
  • EU standardization approach: this is really not the case here. do not fear that bureaucracy kicks in only because this is coming from them. not at all. one can compare with others of course only if all provide the same info but even if the organizer would maybe like it to become a common standard, the fact that financial institutions so far have not really jumped at it make it clear that this is not happening.
  • consultants entry to win clients: of course this is possible but quite frankly I have a hard time believing that any consultancy could enter an engagement purely with this.  it can be used in broader projects as a start Ok but I doubt it is helpful to win clients.
Overall I can highly recommend to do this 2h exercise and with it gain some insights into how you do in innovation management relative to others in Europe. The database so far covers European companies which restricts it though. If your main competitors sit elsewhere then the value is limited although you still can take advantage of a very well structured and complete approach in looking at your innovation management.

Ralf HallerRalf Haller February 5, 2011

Why reward programs fail in Open Innovation projects and in general

“Do rewards work? The answer depends on what we mean by “work”. Research suggests that, by and large, rewards succeed at securing one thing only: temporary compliance. When it comes to producing lasting change in attitudes and behavior, however, rewards, like punishment, are strikingly ineffective. Once the rewards run out, people revert to their old behaviors. … Incentives, a version of what psychologists call extrinsic motivators, do not alter the attitudes that underlie our behaviors.”   by Alfie Kohn in Harvard Business Review, 1993

In his summary Alfie Kohn makes use of at least two dozen studies in the last three decades (which refers to 17 years ago in 1993) that have all shown- often to the total surprise of the researches themselves – that people who expect a reward for completing a task or for doing that task successfully simply do not perform as well as people who do not expect a reward at all.

These researches were conducted with children and adults, with male and female and with different types of tasks and they showed the same results. For open-ended creative work assignments the results were even worse. Important to note here is that we talk about performance in the sense of creating higher quality work and not in the sense of doing something faster or doing more of it, so quantitative. As he also mentions in terms of productivity, research and experiments clearly showed that once incentives were cut, after an initial drop a short period of time later the same or even better performance levels could be seen. In contrast training and goal-setting programs had a far better impact on performance than did pay-for-performance programs.

So in this context I also doubt that e.g. Open Innovation incentive programs such as shown by Innocentive or by the Swiss firm Atizo produce much useable results. They might show here and there some results (in Innocentive’s case probably more since they have awards in the 100s of thousand of US dollars) than with Atizo. What they achieve are collecting some ideas quickly which – in my opinion – a company could have also quickly and often much better been able to derive from its own employees or by asking customers, clients and partners.

Open Innovation as done by Starbucks with its MyStarbucksIdeas or Dell with its IdeaStorm communities are working though quite well and serve mostly as great public relations, communication and branding tools that interact with clients and secondly serve as initial idea collection opportunities. In addition they keep their corporate identity. It is a Starbucks or Dell and not an Innocentive or Atizo community which seems a very critical aspect too for most companies.

The true damages that company incentive programs cause Alfie Kohn summarized in these six points:

  1. Pay is not a motivator (when asked: “What do you care about?” Money ranks only 5th place)
  2. Rewards punish (they are one side of the same coin, they try to manipulate rather than motivate people and do not support a work environment conducive to exploration, learning, and progress)
  3. Rewards rupture relationships (people are trying to use the system for its own gain, no teamwork is supported, in addition incentive driven employees try to demand favors from their managers)
  4. Rewards ignore reasons (and managers use it as a way to manage comfortably and without having to do much)
  5. Rewards discourage risk-taking (the number one casualty of rewards is creativity, so rewards motivate people? absolutely they motivate them to win rewards and nothing more)
  6. Rewards undermine interests (people work because they love what they do but awards undermine this interest even and reduce performance, they undermine intrinsic motivation, it tends to make people less enthusiastic about their work and therefore less likely to approach it with a commitment for excellence, you get what you offer: some quick but overall low quality ideas that win an award but do not much more good for the company)

Ralf HallerRalf Haller January 24, 2011

Idea and Innovation Management vs. an idea box

I experienced now many times that lots of people do actually not know the difference between idea & innovation management and a simple idea box (in German they call it “BVW = betriebliches Vorschlagswesen”). Instead of me explaining the difference now I am quoting the well-known management book author Reinhard Sprenger, who has written about this in his bestseller book “Mythos Motivation”. Here what you can find on page 136:

Betriebliches Vorschlagswesen

Misstrauen: Mitarbeiter enthalten Kreativitätsreserven vor.


Vertrauen: Mitarbeiter wollen kreativ sein.

Vorschläge betreffen den Pflichtenkreis anderer.

Vorschläge betreffen den eigenen Pflichtenkreis.

Vorschläge als Ausnahme. Verbesserung als Regelverhalten.
moralisiernde Appelle normal-selbstverständliche Praxis
wenige Teilnehmer

Teilnehmer: gesamte Belegschaft

Fokus auf punktuelle Misstände Fokus auf kundenorientierte Prozesse
Vorschläge i.d.R. von Einzelnen Verbesserung im Team (Kooperation)
Führungskraft “umgangen” Führungskraft einbezogen
Prämien keine Prämien
Vorschlag schreiben statt handeln handeln statt Vorschlag schreiben
bürokratisch aufwendig unbürokratisch-pragmatisch

Bewertung durch zentrale Institution (Rückdelegation von Führungsverantwortung)

Innovation und Kreativität als Führungsaufgabe

Most of the above points I can fully support. One might be a bit too hard though. It is the incentive part. While I agree that incentives will not buy creativity and should by no means be the main motivation, in case someone does bring in an exceptionally good idea then this should be also recognized financially. Not though by formulating upfront an incentive already but by deciding case by case.