Are we playing together well in South Carolina? What do you think?

All the rage in South Carolina is better collaboration. To make progress we need to get over the historical issues that keep us apart. The Lowcountry, the Midlands, the Pee Dee and the Upstate need to get along better. Clemson and USC need to keep their fighting to athletics. Blacks and whites need to work together better. Women need real opportunities at leadership.

Some days I’m excited that we're doing better than we ever have. We had an outstanding InnoVenture planning meeting a week ago.

Then I get slapped by the parochialism that has always held us back. The Greenville News reports that Cliff Rosen has sued BMW over Clemson ICAR. The State reports that some business leaders are getting frustrated with the Governor because they don’t think he works well with the legislature.

I’d really like to know what you think. Leave a comment below.

Are we really playing together well in South Carolina, or are we just giving it lip service?

What is important to us, until in an instant it is clear that it isn't.

A few weeks ago, I got a call out of the blue from my mother’s minister that she had become disoriented and confused at Vacation Bible School. Life came to a halt for a few days as we tried to figure out what to do. She's better now and has sold her house in Charleston and is moving to her home town of Anderson to be closer to relatives who can help take care of her. But it has been a challenge I had not anticipated and it hasn't been easy, for me or my mother.

A couple of friends recently have faced similar challenges in their lives.

I was in a planning meeting with a friend, who made an excellent presentation of a very significant part of the project. He had thrown a lot of his passion into his ideas, and it showed. No sooner had he finished than he received a cell phone call. The panicked look in his eyes said something was seriously wrong. "I gotta go! I gotta go! My wife has had a bike accident" It turned out that his wife had fallen off her bike crossing a train track and was knocked unconscious. Fortunately someone was there to call 911. She seems to be OK now, except for a few stitches and some bruises, but it was very scary.

Another friend missed the same meeting. I got a note afterward from him. He said, "I lost my assistant to a family emergency last week unexpectedly and that was the straw that broke the camel's back regarding my attendance at the meeting. I'm having to spend every spare hour (that I'm not in the office) helping with my Mom who is rehabilitating in a facility here in town. We hope to have her back home in less than two weeks. That continuous struggle combined with the lack of support from my assistant forced me to work in the office. I hate I missed the meeting." I responded, "I understand about your mom. I've been there. At the end of the day, that's what's important." He replied, "You're right. That is what it’s all about but it is draining the energy from me. I am so pumped about where things are with my work and where they are heading but sometimes the whole "parenting my parents" routine just saps the very life from me. Anyway, I'm learning to juggle it a little better every day." Aren’t we all … learning to juggle it a little better every day. None of us is in nearly the control of our lives that we like to believe. throw our passion into big ideas for the future. That work is important to our businesses and to our communities. It seems to be at the very core of who we are and what is important to us, until in an instant it is clear that it isn’t.

I love it when a plan comes together

If your getting old like me, you remember a cheesy TV show called The A Team about a whacky military unit anchored by Mr. T. Each week the A Team saved the world, but not before narrowly escaping from several exploding buildings and rolling vehicles. At the end of each show the commander would exclaim, "I love it when a plan comes together!"

We had a planning retreat for InnoVenture 2006 Friday and Saturday, July 29th and 30th. The InnoVenture Conference in April 2005 was a huge success. We had 25 major companies, universities, and national labs with displays of their innovations looking for ways to collaborate with one another. We had 15 emerging companies presenting to venture capitalists, looking to raise money. Collectively these were synergistic communities of innovation.

The first sign that InnoVenture 2005 was a success was that almost every organization that participated left understanding why they were there. The second sign of success was that major organizations have stepped up in a meaning way to plan InnoVenture 2006.

At the planning meeting this weekend, the Michelin Americas Research Corporation, the Savannah River National Lab, Nexsen Pruet, the McNair Law Firm, the University of South Carolina, Clemson University, Midlands Technical College, the SC Department of Commerce, the SC Chamber of Commerce, Innegrity, eBridge, SDI Networks, The Technology Resource of the Southeast, Patrick Marketing, the Brand Development Company, Engenuity, the SC Research Authority, the SC Technology Alliance, the SC Council on Competitiveness, the Greenville Chamber of Commerce, Sam Lee and me all participated in the presentations and the discussions.

I am impressed with the sense of ownership the group has in InnoVenture. I made a conscious effort this weekend to step back to allow the group to carry the weight of the planning and the discussion, and the group responded.

I love it when a plan comes together!

Greenville News Op/Ed: Industry partnerships enhance research institutions

By John Warner
Originally published by Greenville News

Recently Gov. Mark Sanford observed that research universities in the state should be focused more on education than economic development. As the father of two teenagers preparing for college, it is easy for me to agree with one of those common-sense observations we have grown to appreciate Gov. Sanford for making.

Do close partnerships between a research university and industry diminish the educational mission of the university or do they enhance it? And can closer alignment result in a more efficient use of the resources in our community, which is another major priority of the governor?

Clemson University was created in 1883 by the will of Thomas Green Clemson, when our community was devastated and impoverished by the War Between the States. The primary industry at the time was agriculture. Mr. Clemson understood that education and economic development are inherently tied together, with the road to higher per capita income in his time being the increased productivity of agriculture. So the university's economic development mission was ensconced in its founding charter.

Clemson's will states that, "My purpose is to establish ... a high seminary of learning in which the graduate (can finish the course of studies) ... in those sciences and arts which bear directly upon agriculture. I trust that I do not exaggerate the importance of such an institution for developing the material resources of the State by affording to its youth the advantages of scientific culture."

Fast forward to today. Are there proven models where the research university is an engine of the economy? In 2001, I visited George Kozmetsky, architect of the Austin economic development model.

In the late 1970s, Austin was devastated by the decline of its oil-based economy. Dr. Kozmetsky sought areas where industry in his region, like Texas Instruments and IBM, needed world-class talent. There, the University of Texas created endowed chairs to recruit pre-eminent scholars, who attracted top students, who graduated and went to work for industry in the region.

The beauty of this model is that neither the university nor industry is focused outside its core mission -- the university stays focused on research and education, and industry on the commercialization of intellectual property. Fusing academic/industry partnerships together around the common need for best-in-the-world talent has helped Austin become one of the country's most successful knowledge-based economies.

At the core of the Clemson International Center for Automotive Research is the Campbell Graduate Engineering Center, where pre-eminent scholars will attract the brightest students in areas strategic to BMW, Michelin and other automotive suppliers. Within a few hundred feet is the BMW IT Research Center, focused on systems integration in automobiles, which is key to maintaining BMW's global competitiveness. BMW did not have to be convinced to do research, they only had to be convinced to do research here, and top graduate education at Clemson was the magnet to do that. So when Clemson's top automotive engineers graduate, some will go to work for BMW without even having to find a new parking space.

This model is replicable. In the S.C. Health Sciences Collaborative, the University of South Carolina and the Medical University of South Carolina will attract and train top students in areas strategic to their industry partners, Greenville Hospital and Palmetto Health.

Several years ago, I described this strategy to a state representative who questioned, "Yea but, how does this impact ordinary people?" Well, the Michelin America's Research and Development Corporation (MARC) is a 1,000 person corporate R&D facility at the Donaldson Center. Forty percent of MARC employees have a bachelor's degree or better, which means that over half of the people at the MARC have a technical college education.

So a major corporate R&D facility does create large numbers of technically skilled jobs. On top of that, the MARC helps keep the Michelin production facilities in the area more globally competitive, where the percentage of technically skilled employees can be up to 90 percent of the workforce.

While graduate engineering schools and corporate R&D facilities need doctorate-level scientists at the top to lead them, and while they increase the community's per capita income by creating large numbers of bachelor level or better jobs, they also create large numbers of technically skilled jobs and help retain the ones that are here. Thomas Clemson understood this in 1883, George Kozmetski demonstrated it in Austin by 1983, and we can see it at work in Greenville today.

The governor is right that staying focused is a key to success for any organization, whether in academia or industry, and that we have limited resources which we must use more productively. The industry/academic partnerships being created in our community allow each partner to remain focused on its core mission in a way that increases our community's ability to attract and retain some of the smartest people on the planet and enhances the overall productivity of our economy. These partnerships will help move us toward our goal of having one of the most successful economies in the country.

New and Improved Swamp Fox

Recently I launched the enhanced Swamp Fox: News of the Southeastern Innovation Corridor. I created Swamp Fox in 2000 as an online archive of innovation announcements and a weekly email update that highlights the work of southeastern innovators and entrepreneurs. Today Swamp Fox has grown to over 6,000 subscribers.

This is the first major revision to the site, making it much more useful. You’ll see new features such as the ability to submit an article directly online and an events calendar. You can search the press release archive either by organization or by key word in order to use Swamp Fox in your market research. Take the time to explore the site, and you will find other useful features.

For several months, Adam Gautsch and Evan Tishuk of OrangeCoat have put many hours into developing this enhanced site. I am very grateful for their efforts, and hope you like the new site.

If you like what you see, do us the favor of referring Swamp Fox to a colleague. Referrals are by far the most effective way of spreading the word about Swamp Fox.

I’d love feedback on the new site, and your thoughts about how we can improve it further. Thanks for your interest in Swamp Fox.

John Warner

P.S. A maven is “someone who is dazzlingly skilled in any field.” In the future, Maven Sponsors will author this blog as a unique way to reach a broad base of innovators and entrepreneurs. If you would like to explore being a Maven Sponsor of Swamp Fox, please contact me.

InnoVenture Forum - Entrepreneurs to the Rescue

The first InnoVenture Forum was held today featuring life sciences at the University of South Carolina. The Forums are a significant enhancement that will allow InnoVenture to highlight specific partners at locations all around in the Southeastern Innovation Corridor.

As with anything new, there are start-up challenges. We planned a live meeting that would be recorded with an archive posted on the InnoVenture website for viewing later.

We thought we had the recording taken care of but a few days before the event we found out the system we were depending on to record the audio would not be available. So at the last minute I called Phil Yanov, President of ThinkHammer Communications, to bail me out. People that can be counted on to get the job done are valuable. And sure enough, Phil loaned me a portable digital recorded that did a great job.

Several others made the Forum a success. We gave Rob Yarmey, Chief Technology Officer of Multimedia Design Corporation, files from the event that weren't perfect for him but you wouldn't know it from the archive he created for us. Tony Smith at the SC Department of Commerce made sure we had a great facility. Chip Hood at Needles and Rosenberg sprang for lunch. Brenda Laakso of InnoVenture made sure we had the details in order. And Lisa Rooney and her staff, as well as the USC researchers who presented, did a great job of helping uncover exciting opportunities at USC.

That is what I love about InnoVenture. We all realize that it is in our mutual self-interest for our community to be successful. I love being surrounded by great people who are willing to roll up their sleeves and make great things happen.

It can be easier to give than receive - advice that is

For several weeks, I have been thinking though what the next step in my career is. I have had a diverse and interesting journey. I started in public accounting with KPMG; founded a venture capital firm, Capital Insights; an innovation conference, InnoVenture; and an online newsletter, Swamp Fox: News of the Knowledge Economy. I've been involved with companies making electronic connectors and capacitors, and with companies delivering HR services and wireless phone services. I was Chairman of Earth Fare, the southeast's largest organic grocery store chain from 2000 to 2005. I frequently write op/ed pieces, and am publishing a book this summer.

While to others it sometimes seems I’ve been all over the board, I don’t perceive it that way. My sense is that I have leveraged a common skill set in a variety of organizations. My challenge is clearly articulating for others what that skill set is, identifying the situation where I am the go to person, and then focusing my search for a new opportunity where I can best leverage my assets and experiences. It sounds so easy.

I went to visit a good friend, Brenda Laakso, Executive Director of InnoVenture. I opened the fire hose of what I had done and wanted to do, and she gave me great advice: be focused. This is the advice that I freely give to others, often critically because they find it so hard. But like all entrepreneurs, I find it very difficult to apply to myself.

Being focused is critical to developing a top-of-the-mind position and being a "best buy in a given situation." Every successful entrepreneur must do this. Saying you are going to focus on doing one thing, means you are not going to do other things. It is difficult, and scary, to limit your options. With limited resources, intellectually you know the best chance for success is to mass your resources on a select target. But then your emotions roar, "What if you pick wrong?" This is the age old entrepreneurial dilemma.

I have begun working with Larry Stuenkel, of Lawrence and Allen, on a consulting basis to think through what I want to do. His advice: be focused. I know, I know.

I am a student of Geoffrey Moore, who in Crossing the Chasm: Marketing and Selling High-Tech Products to Mainstream Customers observed that the lack of focus by many entrepreneurial leaders is not a problem of the head, but of the emotions.

First, let us understand that this is a failure of will, not of understanding. That is, it is not that these leaders need to learn about niche marketing. MBA marketing curricula of the past 25 years have been adamant about the need to segment markets and the advantages gained thereby. No one, therefore, can or does plead ignorance. Instead, the claim is made that, although niche strategy is generally best, we do not have time—or we cannot afford—to implement it now. This is a ruse, of course, the true answer being much simpler: We do not have, nor are we willing to adopt, any discipline that would ever require us to stop pursuing any sale at any time for any reason. We are, in other words, not a market-driven company; we are a sales-driven company.

I hear Brenda, Larry and Geoffrey. But focusing is still really hard, and a little scary. Derrell Hunter, a wise mentor, used to tell me all the time, "If it were easy, anyone could do it."

Nothing is sweeter than your children succeeding

In the midst of all the busyness of work and other stuff that we spend time on, our children grow up and blossom. We all need to stop and smell the roses.

My son had an Eagle Scout Court of Honor tonight. When he joined scouting several years ago, we sat down and laid out a plan for what he needed to do to get here. Not that he would have gotten here on his own. It took lots of coaxing and prodding. The times I told him to "do it because I said so" and "you'll get to screw up someone else's life in the future, but now is my turn," I heard myself sounding like my mother.

There were camp outs and summer camps and an Order of the Arrow ordeal. The back packing trips and canoe trips were fun, but tiring. Now that he's an Eagle Scout, I appreciate it more than he does. I'm an Eagle Scout too, and this is one of those things in life that you savor more as time goes by. As I stood there while he got his award, my mind drifted back to the great scoutmaster and persistent mom I had who wouldn't let me quit either. Frequently the topic of scouting comes up in conversations, and more often than you might expect I run into other Eagle Scouts. It's an instant fraternity when that happens. My son will experience this over time.

My daughter will be a senior and starts in center field for the Riverside High School softball team, where she has since the eight grade. She is an All-State player this year. When she was little we would spend hours in the front yard playing catch. She was good, and I'd hum the ball at her harder than her mom was comfortable with. Recently we were playing catch in the front yard and I threw it hard at her. She caught it, stared me down, and told me not to dare think I could throw harder than her now. Don't tell her, but my sore hand says she's probably right.

Last year, I was sitting on the visitor's bleachers to avoid the glare of the sun. A runner was on third with one out. The ball was hit to center field. My daughter lined up under the ball, with her momentum going to home when she caught it like she'd been taught. The runner tagged up, and my daughter threw a strike to home to get the runner at the plate. The opposing parents exploded ... at the third base coach. "That's 'E' in center field. What was he thinking sending her home? That's 'E' in center field." Wow! That's respect, and my highlight of her softball career.

Nothing is sweeter than being there when your children succeed. Nothing.

Public education would work if the customer would change

The Greenville News editorialist Nell Stewart could not have more clearly highlighted the innovator's dilemma in public education.

Public schools are designed for children of middle income, educated parents. It is assumed that parents will be active in the PTA, will be close partners with their children's teachers, and will do hours of homework with their children when they get home.

But what if parents either can not or will not be as active in their children's education as middle income, educated parents?

Nell's solution is the parents must change. "All of us must be responsible for our own actions, and effectively help others to accept their own responsibility."

Failing organizations usually blame the customer. You hear, "Customers don't' get it - there is no way we can do it for that cost ... or in that time frame ... or at that level of quality. If customers would only change we could be successful."

No where in Nell's editorial is there any suggestion that the model of delivering education must change. No where does Nell appreciate that who is likely to identify novel new ways of delivering innovative education are educational entrepreneurs. No where does Nell appreciate that entrepreneurs have no opportunity to do what only they can do best in the current system; that to have fundamentally better public education, we need new and innovative methods of delivering education to those poorly served by the current system.

Until we understand that and act on it, we won't make the progress we need to in becoming more globally competitive as a community.

When waves crash on the beaches of our lives

We plan. We strategize. We pontificate. We enjoy the illusion that we are in control. And then the waves come crashing over the sea walls we erect to protect ourselves from the outside world.

I was sharing some work problems with a friend earlier in the week, and she asked was I happy. I told her about another friend who had a critically ill relative and said that helps put our problems in perspective. My friend got defensive and said there was more to life than not having pain, which wasn't what I said, but ...

Then Friday, my mother's minister called. Mama had been teaching Vacation Bible School earlier in the week and had gotten disoriented and confused. She picked up her grandchild to take him home, only the child she picked up was not her grandchild. With the child screaming, mama argued with the other workers that she was right and to let her go and ...

When I called mama Friday to ask if she was OK, she insisted everything was fine. It seemed like a casual check-up call at first, until I asked if she had become disoriented earlier in the week. "Well no, why would you ask that?" As I got more specific, she got more irritated. "Who have you been talking to?" Getting off the phone, she thanked me for being concerned, insisted she was quite alright, but that wasn't the last call of the day ...

Saturday, mama's first cousin and I went to Charleston to bring mama to Anderson to stay with her cousin for at least a few days. We stopped at a restaurant for lunch. Our cousin ordered a salad with cheese and broccoli soup. Mama was looking at her menu and didn't remember what the soup choices were, so she asked the waitress again. "A salad with cheese and broccoli soup is what I'll have, too," mama ordered ...

Within ten minutes, we had gone to the salad bar and were back at our table when they brought the soup. The waitress gave one soup to our cousin and the other to my mother. My mother said she didn't order the soup, and when we told her she did, she got very insistent that she didn't ...

My stomach tightened. The pain on my face as I looked at our cousin said more than I could have verbalized at that point.

We don't know what's wrong. Mama has been under a lot of stress. Is it as simple as that? Did she have a small stroke? Could it be Alzheimer’s, with all the terror and dread that implies? We just don't know.

Our cousin and I later discussed what we might need to do. She said, "I'll take care of your mother, but you'll have to take care of the house in Charleston, contact her stockbroker about her investments, and get her bills paid."

I stopped by my mother's house about a month ago for a very brief visit. She was anxious about her finances and asked me to go downtown to meet with her stockbroker. I had to get back home to Greenville that day so didn't have time. I've meant to schedule a day to do that, but never did. I wish I had. Maybe mama was trying to tell me something she couldn't tell me directly. Now I'll have to find the time in my calendar to attend to what I should have paid attention to already.

When we got to my house Saturday night, my wife had been working hard all day fixing a wonderful dinner. It was delightful and comforting given the day that we'd had. After dinner, my mother was off to our cousin's house to stay for awhile.

We do have protection from the major storms in our lives. But it is not because we are in control ... in an instant that can be exposed for the illusion that it is. Often our sea walls are the people who love us and do what they can to protect us from the most violent waves.

Insights into who successfully identifies new market opportunities

The author of Blink, The Power of Thinking Without Thinking, explores how intuition works.

The Met in NY buys an ancient Greek sculpture. To authenticate it, they ask art experts in NY to opine, and even have scientists examine the patina. Comfortable that it is real, they pay a small fortune for the work.

At an exhibit of the sculpture in Athens, experts who deal in Greek antiquities on a daily basis look at the sculpture and instantly identify it as a fake. Further tests conclude that the Greek experts are right. The author's question is, how did the Greek experts have the intuition to instantly know, when other experts didn't?

Part of the author's answer is:

We take it, as a given, that the more information decision makers have, the better off they are. ... Quite the opposite: ... all that extra information isn't actually an advantage at all: that is, in fact, you need to know very little to find the underlying signature of a complex phenomenon.

Through years of experience that had developed intimate familiarity with Greek antiquities, the Greek experts had developed fine filters which allowed them to quickly find key features of a work and assess its authenticity. This process is known as "intuition." The Greek experts themselves might not even be entirely sure what clues trigger their intuition, because much of their thinking occurs deep in their subconscious.

Academic research by Geoffrey Smart demonstrates that venture firms that have the best track record of success in picking people have a rigorous methodology for assessing and improving the management teams of portfolio companies. They use multiple sources of data from past oriented interviews, reference interviews, and work samples. They carefully review a candidate's accomplishments, his failures, what negative feedback he thinks references might give, and his reasons for leaving prior companies. The objective is to accurately assess the candidates past behaviors that have led to their success or failures as the best indication of future behaviors that can be expected.

The challenge of creating new markets is that it is impossible to do conventional research on markets that do not currently exist. The best entrepreneurs, who have highly developed skill in identifying and developing new markets, progress through a series of incremental milestones to learn what the new market is and how to serve it.

Blink points out that it can be futile to ask experts how their intuition works, because they probably do not know themselves. Likewise Smart's research indicates that it is not very illuminating to ask potential entrepreneurial leaders what they will do to make a company successful, as they probably don't know either. Smart's research indicates that the best venture capital firms have a methodology for selecting leaders who have the best intuition, by depending on an entrepreneur's past track record in similar situations as the best indicator of an entrepreneur's future success.

Like the Greek experts in Blink, great entrepreneurs have spent a career honing the power of their intuition, which is to a large extent what venture capital firms are investing in.

An innovator's dilemma: Is there a critical mass of talent and innovation in the southeast?

In the Innovator's Dilemma, Harvard professor investigates why CEOs of major companies can be blindsided by discontinuous innovations - how did Sears get blindsided by Wal-Mart, IBM by Microsoft, or US Steel by Nucor.

His answer is that these new companies created markets of new customers that did not previously exist. At Harvard, MBA students are taught to do market research to understand the needs and wants of customers, and then to develop products to meet these customers needs. This is a proven way of commercializing sustaining innovations that enhance a company's most profitable products delivered to its best customers. But how does one do research on new markets that do not currently exist?

His answer is that highly successful new companies don't. What they do is a series of incremental experiments to discover what the new market is and how to serve it. By the time the new market is obvious to everyone, the new company has such a depth of knowledge, expertise and relationships that it is a very potent competitor with the potential to overthrow not only the previous market leader, but the entire value chain of which the leader is a part.

I recently was brought face to face with the dilemma Dr. Christensen describes. An associate and I are assessing the opportunity for a company that depends on a deal flow of high-quality investment opportunities in emerging companies in the southeast. My colleague sought the advice of an expert in corporate finance, who asked a series of questions we all would like the answers to:

Is there ample southeastern deal flow?

How many closed seed/startup capital raises have there been in the southeast?

What was average size of capital raised?

One thing is certain, the southeast as a region is underserved in terms of the amount of venture capital invested. The MoneyTree Survey of US venture investments indicates that states they define as the "southeast" have 16 percent of the US population but only 6 percent of US venture capital investments in 2005 Q1, and half of that was in only 7 companies.

While the market research ought to be done, I am also fairly certain that there will not be enough closed investments in the southeast to convince our finance expert a market currently exists for the company we are envisioning.

But then Sears didn't understand how important rural communities like Bentonville, AR were, IBM did not understand the individuals and small businesses that were the initial market for PCs, or US Steel did not understand how reprocessers of scrap steel who made low quality re-bar could be important.

I am certain we can create a market of wealth creating, emerging companies in the southeast. But, for the most part, this market does not yet exist. We can document what is not happening in the southeast, but is very difficult to document companies that can be created that to not exist today.

This is precisely the innovators dilemma that Clayton Christensen describes.

The right question is does freedom work?

I recently had a fascinating discussion about how to improve public education. An abbreviated excerpt starts with a quote: "A major study conducted by Boston College researchers shows Europeans are the world's best mathematics and physics students at the high school level, and that their American counterparts perform well below the international average in both subjects."

To which the unexpected reply was "It's astonishing how those Socialist, far less religious countries, can have better educational systems isn't it?"

Me: "American public education is a socialist system. That's the problem."

Him: "So facts are irrelevant. You just hate public education on 'principle'."

Me: "The facts aren't irrelevant. Our socialists are not as good as European socialists. That is a fact."

Him: "So it all boils down to your irrational fear of the government. Who do you think runs the local government schools?"

Me: "There is no irrational fear of government. Individuals making their own decisions will make better decisions than some centralized group making decisions on their behalf. We have an obligation to provide the resources for every child to have an education. Given the resources taxpayers allocate to education, parents will make better decisions about what is in the best interest of their children than some central committee. The right question is does freedom work?"

Him: "Seems like the socialist systems in other countries are working...so can it be socialized education that is the problem...central committee stuff works pretty well in these other countries."

Me: "This isn't about proving that markets work. Every day of your life you experience the reality that when consumers have choices quality goes up and costs go down. When consumers don't have choices the opposite happens. You understand that."

Him: "I disagree with your view that Americans can't do anything well unless a private corporation profits."

Me: "You really have a distain for the free market. You don't believe freedom works, so you have to control the decisions that parents would otherwise make in the best interests of their children."

Him: "No I don't."

Me: "You can not claim you believe freedom works, and then turn around and say you do not trust people to make decisions about their own lives and the lives of their families. You either believe freedom works, or you believe the state has to make decisions on behalf of people because they will not make wise choices for themselves."

Him: "The error in your thinking comes from the belief you seem to have that public schools are not run by individuals. By using the word "state" over and over, you ignore the fact that these are real Americans just like you and I, running these schools. They are parents and citizens just like everyone else."

Me: "You want to believe that freedom works, though you are not sure what is wrong with socialism. And you argue that public education is based on freedom, but you don't trust parents to make decisions that are in the best interest of their children."

Him: "It's only your assertion that socialism and freedom are not compatible. A socialized system such as public schools is run by the citizens who use the system. Nothing could equate freedom more than such a system."

Me: "Socialism and freedom are mutually exclusive. The more you have of one the less you have of the other."

Him: "Thanks for continuing to present your nonsensical assertions."

So there you go. I'll admit I am still amazed.

Innovation and Entrepreneurship: The Core Model

In recent months, I have been working out a model of innovation and entrepreneurship that allows organizations to create enormous wealth by identifing and serving new markets, while managing the inherent risk. The model has four elements:

Visualize a significant opportunity. Nothing meaningful happens until a leader develops a passionate, realistic vision of what can be. Great ideas often are found at the intersections of diverse disciplines, organizations, and cultures. InnoVenture is all about getting enough diverse, world class organizations together to precipitate out great, innovative ideas—in other words, getting enough atoms in the jar to create heat. The concept of the intersection is perhaps best described by Frans Johansson, author of The Medici Effect, who was the keynote speaker at InnoVenture 2005.

Assemble an outstanding team. Essential to building an outstanding team is clearly identifing what skills and behaviors are necessary for success and then attracting top talent with a successful track record of having done what is necessary. Perhaps the most articulate person I have met in building a successful team is Brad Smart, a proponent of topgrading.

Develop a compelling strategy. There are some types of innovations that are consistently commercialized successfully by market leaders. Get in between them and their best customers and they will take you out. There are other types of innovations though, where new entrants consistently are successful. These are discontinuous innovations, where new markets are created of customers who are not well served by the status quo. This is most clearly delineated by Clayton Christensen in The Innovator's Dilemma.

Execute a focused plan. Visualize a great opportunity. Assemble an outstanding team. Develop a compelling strategy. Then you must execute by narrowing the company's focus to a beachhead of mainstream customers, in order to simplify the process of delivering 100% of what is necessary for the product to be easy-to-buy. Satisfied customers will create word of mouth referrals, which is always the most efficient and effective marketing. This process is best described by Geoffrey Moore in Crossing the Chasm.

I have published a book, Swamp Fox Insights: Innovation and Entrepreneurship in a Time of Profound Change, that describes in more detail the core model and my experience with it over the course of my career.

Is continuous improvement enough in public education?

Recently I attended the annual meeting of the Carolina First Center of Excellence, a program managed by the Greenville Chamber of Commerce to bring continuous quality improvement, including Baldrige principles and practices, to schools in the Greenville County School District.

The superintendent of the Greenville County School District, Dr. Phinnize J. Fisher, along with a principal, a teacher, and a student all made impressive presentations of how applying continuous improvement principles enhanced the quality of education delivered. Everyone involved in this program should be congratulated for making a real difference in classrooms in Greenville County.

But is it enough to meet the needs of all students?

There is a great diversity in how people think and learn. The typical public education classroom is designed to meet the needs of one style of learning. Even in schools where many students are succeeding, a considerable number of students do not match up well with this paradigm. Public schools, for the most part, make an assumption that students come from families who will and can continue the students' learning at home. Drop out rates are high in communities where the families' support at home is not strong.

For these students who are not well served by today's system, public schools doing what they do better may improve their situation but it still won’t solve their problem. The real solution for these students is having a wider diversity in how education is delivered so that students and their parents can find educational alternatives that match up with the students’ ability to learn and the families’ ability to support them.

Continuous improvement is necessary, but not sufficient, to meet the needs of all students. Public education also needs innovation, and innovation is driven by entrepreneurs. What public education needs are entrepreneurial educators. Almost by definition, some entrepreneurs will approach problems differently than they have been approached in the past. And in many cases, in fact in some cases that have the potential to transform how education is delivered, it will not be clear at first whether these experiments will work. The most radical innovations will almost certainly have large numbers of loud naysayers.

A innovative education system that meets the needs of all students must allow entrepreneurial educators to bring innovative alternatives to market. Then for those innovations that do not gain traction, either because they do not find a customer or because they are poorly executed, the system must have a self-correction mechanism so that failed innovations stop. Likewise, the system must have a way for successful innovations to attract additional resources so that they can grow and meet the needs of more consumers.

That is the way free markets work. That is what school choice is all about. Until we design innovation into our public education system, we can spend all the money we want, we can test all we want, and we can have all the continuous improvement that we want, and we will not meets the needs of many students not well served today.

Why public schools may never serve the needs of poor students

Large organizations have grown to the size they are because in the past they served a core constituency very well. The organization aligns with its best customers through a value chain of vendors and employees. This value chain has a cost structure targeted at delivering the most profitable products to the best customers. The chain typically is very good at incremental innovations to improve value delivered to these target customers. The chain typically is not very good at meeting the needs of customers that are not in the target segment.



Markets are dynamic, and as they mature, some customers are not well served by the status quo. In some cases, an entrepreneur will identify how to deliver s simpler, cheaper, more convenient solution to these customers that creates a new, growing market. In some cases this new value proposition is so powerful that eventually it overthrows the original value chain. Think of Wal-Mart overthrowing Sears, and the PC overthrowing mainstream computers.

I have been involved in lots of companies an advisor, manager, and investor. I have been on both sides of this phenomenon, in the market leader that was being challenged and in the emerging company that was doing the attacking. Often the cost structure of the market leader makes it extremely difficult to serve these now customers with a cheaper, simpler, more convenient solution and still make money.

As the challenger becomes more successful and inflicts pain on the leader, people inside the leader become anxious and disparaging about this new emerging threat. You hear that these new customers just don't get it. They are unsophisticated. That the new upstarts are screwing up the market. That they are cockroaches. The customer is to blame for the problems the leader is experiencing.

Then you hear that the company just needs to work harder. Let’s get back to basics and focus on our fundamentals. Six sigma and other testing regimes are installed. But these leading companies will never succeed in this new market, no matter how hard they work or what they measure, unless and until they develop a new value that can be effectively delivered to these new customers.

I have come to believe that a similar phenomenon occurs in public education. The paradigm of the existing system is that schools will have considerable assistance from well educated parents in helping students with homework and studying at home. In South Carolina, half of students will not graduate from high school on time. If your family does not meet the educated, middle class paradigm the school was set up to serve, you tend to fail.

What is the answer from the public schools? Not that their paradigm does not serve students well who are not from educated, middle class families. Large organizations rarely admit that is the problem, rather they blame the customers. The parents of these children are to blame, because they are not involved with their kids in the way the schools are designed to work. Schools just throw up their hands in resignation; we can not meet the needs of these students because the parents don't get it.

What is the real problem? Just like Sears did not know how to serve customers in Bentonville, AK, existing public schools do not know how to reach students not well served by the status quo. This is where entrepreneurs are the most valuable in our society, creating new value to serve emerging markets of customers not well served by the status quo.

We desperately need school choice to unleash the power of entrepreneurs to meet the needs students failing in the current system. The entrepreneurial process is very difficult, with lots of starts and stops before someone finally gets it right. It is unrealistic that a system tuned to serving educated, middle class families is ever going to meet the needs of underserved students on its own, no matter how much money we spend or how much measurement we do.

When we place our bets, which we do every day with our tax dollars, let's bet on the educational entrepreneurs.

George Fletcher to Lead SC Council on Competitiveness

Thursday, a friend of mine, George Fletcher, was elected Executive Director of the SC Council on Competitiveness. I think this is very encouraging and the shot in the arm that the Council needs to deliver on its potential.

George is a doer. In 2001, Clemson President Jim Barker called a meeting to discuss what we would do different if Clemson were located in Greenville. George asked to organize a committee to study having more Clemson research in Greenville. I participated on that committee, and we met for about a year. Ultimately the conversation led to what became the Clemson University Center for International Research. With partners Clemson, BMW, Michelin, IBM, and Microsoft, and a total of $112 million committed to date, this is the most important knowledge-based initiative in South Carolina today.

George also was the heart and soul behind the recent Greenville Vision 2025 process. This was an enormous effort to get many different organizations in Greenville together to begin to form a common vision of the community we want to create over the next couple of decades.

Neither CU-ICAR or Greenville Vision 2025 would exist today without the leadership of George Fletcher. The SC Council on Competitiveness could not have chosen better.

InnoVenture MicroBusiness

Over the past year, I have had numerous conversations about how to have more diverse participation in business organizations I am a part of, from InnoVenture to the Chamber. One of the recurring issues that comes up over and over is that most African-American and Hispanic businesses are micro-businesses, with four or fewer employees. Often the owner can not afford the time away from the company, or the financial cost of participation is too high, for an activity that is not directly relevant for their business today.

I have come to believe it is important to focus on the needs of micri-businesses, in order to prime the pipeline of the growing businesses of tomorrow, especially in the African-American and Hispanic communities. So if I can find a Chairman and Executive Committee willing to organize the event, I am interested in having an annual InnoVenture MicroBusiness Conference.

If you are interested in participating, please let me know.

What did you think about InnoVenture 2005?

If you participated in InnoVenture 2005, please leave a comment about what you thought of the event.

Leave a comment about what Swamp Fox should address?

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So, please take the time to leave a comment about topics you think are important?

Your input will be very helpful in producing the most useful and interesting Swamp Fox site for you.

Why don't we have an InnoVenture for Primary Education?

When I started InnoVenture, one of the challenges I saw in South Carolina is that many of the most talented people here work for large companies and do not have an infrastructure on which to spin out and start high-impact companies. Most entrepreneurs here have never met a venture capitalist or even really know what venture capital is. So as InnoVenture gets investors to Greenville, it encourages entrepreneurs to build relationships with those that can help them get new companies off the ground. Over time this should stimulate the number of wealth creating, high-impact companies we have here.

Even before InnoVenture, someone in a large company who has a idea for a new product their company does not want to pursue can leave and start a new company. If the entrepreneur can find customers to buy the new product, then the new company attracts more resources and gets to serve more customers.

Most school teachers work for a large organization too. But an entrepreneurial teacher who has a great idea for serving students not well served by the status quo does not have the same opportunity as someone in business, because the students she is targeting have no way of diverting the resources spent on their behalf to the entrepreneurial teacher.

Usually the school choice debate gets bogged down in funding, and too often it seems like an attack on public school teachers. They are as much as victim of the system as parents and students are. So why don't we turn the debate on its head and make heros out of entrepreneurial teachers with innovative ideas about how to better educate students not well served by the status quo. Let's have an InnoVenture for Primary Education in the fall.

By encouraging entrepreneurial teachers that there are community leaders willing to step up and support them, some of these teachers will be willing to step out just like entrepreneurs in big companies do. Once we identify a deal flow of outstanding education talent and ideas, then we can work on how we get them funded.

Anyone interested in working with me to put together InnoVenture for Primary Education? Contact me if you are.

More thoughts about InnoVenture: A change in values?

As mentioned in the previous post, InnoVenture 2005 was a smashing success. Mary Ann Pires wrote an interesting editorial about InnoVenture 2005 in the Greenville News, which spurred a few thoughts of my own.

Mary made the observation, "the state's "progressives" ... [must] get finally together and affect the values change necessary to dominate more regressive elements."

We do need to create a deeper culture of innovation here, which pervades the community, from businesses to universities to government to public education. There are some who will have to be dragged along kicking and screaming.

I'm not sure what "regressive elements" are, but a big challenge is people and institutions that benefit from the status quo either seeing it in their interest to change or facing some outside pressure that forces them to change. Typically people and organizations do not change until they have to.

This is the most important reason we need to foster an environment where entrepreneurs can create new institutions targeting people not well served by the status quo, whether this is emerging high impact companies or charter schools. I am very encouraged by the blooming of innovation that is occurring all over the state.

As Michael Porter says, this is a marathon, not a sprint. We're making progress.

Something I feel very strongly about is that, while we need to study best practices in more highly innovative communities, we have to create a culture of innovation that fits the character and values of our community, not San Francisco or Austin or anywhere else. We will fail it we try to be a clone of somewhere else. We have to be globally distinctive.

Thoughts about InnoVenture: A bad day for Luddites

InnoVenture 2005 was a smashing success. The energy in the room was electric. But then I am biased.

It is always good when others who are more objective comment on your work. Mary Ann Pires wrote an interesting editorial about InnoVenture 2005 in the Greenville News. Her comments are very complementary about InnoVenture, for which I am very grateful. Her thoughts did spur a few thoughts of my own.

Mary observed that InnoVenture was "A Bad Day for the Luddites." The historical Luddites were not wrong to be very concerned about the Industrial Revolution. There are winners and there are losers when economies shift, and the Luddites knew that they would be losers and fought hard to resist it. Who can blame them?

If you are a 55 year old textile worker with a high school degree, today's Luddite, you have a real problem and what is occurring is very scary. Going to Greenville Tech and training to become a nurse practitioner is probably not a real appealing option.

It is easy to say that the economy as a whole will benefit from change, especially if you personally expect to benefit from that change, but one of the real challenges we have to acknowledge and deal with is the transition for people that otherwise will get run over. One of the main issues that derails the discussion of having more innovation in public education, for example, is the challenge of those least likely to benefit, who are likely those who are already the least fortunate. We will not make progress as a community unless we find ways that no one gets left behind.

Bill Gates says American high schools are obsolete and system fundamentally flawed

The following is from a speech Bill Gates gave to the National Education Summit on High Schools.

America's high schools are obsolete.

By obsolete, I don't just mean that our high schools are broken, flawed, and under-funded - though a case could be made for every one of those points.

By obsolete, I mean that our high schools - even when they're working exactly as designed - cannot teach our kids what they need to know today.

Training the workforce of tomorrow with the high schools of today is like trying to teach kids about today's computers on a 50-year-old mainframe. It's the wrong tool for the times.

Our high schools were designed fifty years ago to meet the needs of another age. Until we design them to meet the needs of the 21st century, we will keep limiting - even ruining - the lives of millions of Americans every year.

Today, only one-third of our students graduate from high school ready for college, work, and citizenship.

The other two-thirds, most of them low-income and minority students, are tracked into courses that won't ever get them ready for college or prepare them for a family-wage job - no matter how well the students learn or the teachers teach.

This isn't an accident or a flaw in the system; it is the system.

Why didn't African-Americans show up?

InnoVenture 2005 was a smashing success. 450 people attended. Major organizations from Clemson to USC, from Savannah River National Lab to SPAWAR, from BMW to Michelin, had displays of their innovations. Fifteen emerging companies presented their business plans to investors. The energy in the room was electric.

When we began planning for InnoVenture 2005 last summer, we invited African-Americans to join our planning committee (though they later dropped off). We went on a black radio station, and reached out to the Upstate Urban League Young Professionals. We invited an African-American keynote speakers (well we really invited a Harvard MBA who is an expert in innovation who happens to be an African- American).

That is addition to all the other promotion we did. We had an intensive e-mail campaign. We wrote editorials. We advertised on Mike Switzer's South Carolina Business Review on SC Public Radio. We had several people interviewed by Mike.

18% of the population in Greenville County, and 30% of the population in South Carolina is black. So why were less that 1% of the 450 people who attended InnoVenture black?

We will not have the most innovative economy we can unless people who have diverse experiences and perspectives are at the table. So what can we do to attract more blacks, Hispanics, and other minorities to InnoVenture 2006?

I'm open to any and all suggestions.