4 Key success factors to build sustainable smartcities

smartcityLiving in an increasingly connected world means also to compete more and more in a global economy. This is true for countries, but also for cities, especially when more and more of the global population is moving into mega-cities.

In the cities of the future efficient usage of resources and competitiveness will be essential for continued growth and possibly even for survival.

The smart city concept is essentially about efficiency of a city. Efficiency based on the intelligent management and integrated ICTs, and active citizen participation. According to the wikipedia definition: “A city can be defined as ‘smart’ when investments in human and social capital and traditional (transport) and modern (ICT) communication infrastructure fuel sustainable economic development and a high quality of life, with a wise management of natural resources, through participatory action and engagement”. The broadness of this definition means though that there can be many different interpretations of when a city starts to become smart. It also means it is difficult to compare cities amongst each other as priorities will differ. The current socio-economic context of city will certainly impact these priorities. The commonality between smart cities is that ICT is used to improve the city’s capabilities to innovate and solve efficiency or capacity related problems.

Direction, Commitment and Alignment

Smart cities are about efficiency but also about increasing the quality of life of its citizens. It is hence essential that local governments define a clear vision on what are the objectives and priorities for the smart city development. For me this is a pre-requisite to start working on a smart city agenda and is a first level of maturity that is needed from the local government and authorities. If I take Dubai as an example this first level of maturity is fulfilled, through the vision that His Highness Shaikh Mohammad Bin Rashid Al Maktoum exposed at Gitex last. Focus on Smart Life, Smart Economy and Smart economy are clear indications of where the city wants to head in the next years.  This vision provides though limited value it is not transformed in a public-private sector agenda. Corporates and enterprises need to see profitable business in participating in smart city initiatives. This provides a second level of maturity. Here also I see that Dubai has reached that level of commitment, especially when looking at the objectives of the ministries and authorities in charge of transportation and energy. The third level of maturity will come once the various authorities start to break industry specific silos, and leverage on ICT to improve efficiencies among industries. I believe this third level of maturity is where the highest efficiency benefits can be reached, but this is also the hardest objective to define.

Clear metrics, a strong governance and an open agenda

Vision and objectives is one thing, but investment will only be made if the returns can be clearly measured. And this is where it becomes difficult. There are number of indexes that try to benchmark city performance and improvements but the difficulty lies in finding indicators that provide robust and reliable data. Since data collection is not of the same quality in each industry or country, the result of this type of exercise is not always of academic quality. If seen a least three different index recently measuring the efficiency of  smart city. Ericsson has produced a smart city index which positions smart cities on two axes: one measures the ICT maturity and affordability and another ones measures the impact of this ICT on a triple bottom line which looks at  environmental, social and economical impact. In the Ericsson index more than 80 difference indicators are analyzed and compared. GSMA has a similar index, and also INSEAD regularly publishes an index which looks more at the intellectual output. In any case each city might want to tune the indicators that are relevant to its priorities will competing in the global economy. One of the critics I could have to these indexes is that there are crunching offline data made by academics or consultants, but is not really visible or understandable to citizens in clear and understandable fashion. Since government will often invest tax payer money into this projects, I believe it is crucial also to provide an open agenda to share the progress made and measure indicators that are relevant to the citizens. The proper collection, management and exposure of the relevant city metrics shows and increased maturity in the city’s governance. A great example of such openness and transparency is the London City Dashboard, which shows regular updates on indicators that matter to its citizens. These are indicators like unemployment rates, crime levels or traffic accident levels. This opendata agenda also secures that there is a feedback loop between citizens and authorities

Continued investment in people and ICT infrastructure

In a smart city, it is kind of obvious that the right investments need to be made in ICT. Whether it is for connectivity, communication or cloud, ICT will support continued digitalization of services and development of knowledge economy. Similar the cities need to develop the right skills and attract the right skills to fill any competence gaps the city might have to be able to execute on its plans. This means a strong investment in education, but also adequate immigration policies and simplified processes to start a business.

New infrastructures to enable community involvement

For me the third success factor to create a sustainable smartcity is to create an environment that fosters innovation and is able to channel innovations from the crowds. In a digital economy innovation can come from everywhere and smart cities need to put the right structures in place to capture promising ideas in early stages and allow these to bloom. More and more cities realize the importance in setting up incubators and accelerators to capture these innovations, but we see also new type of creativity place like FabLabs gaining. This is certainly couple to a renaissance in hardware development and prototyping that has been triggered by innovations like the Raspberry PI, Arduino or 3D printing. Smart cities must provide environments to experiment, for people to rally around common causes and develop the next generation of innovations.

What’s your view?

I believe that continuously working on these four dimensions will help to develop sustainable smart cities. My view is certainly a bit simplistic and I acknowledge that but I hear to little about community involvement when reading about smart cities and this is why I wanted to write this short article and get some community feedback. What do you think is needed to build a smart city?

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Establishing a culture of innovation: The ten types and faces of innovation

This post is inspired by Tom Kelley’s books: The Art of Innovation and The Ten Faces of Innovation, and then also by a seminar I attended a week ago at Digital Arabia in Dubai. Matt Locsin, from innovation consultancy firm Doblin, talked about the ten types of innovation and then run a workshop on the same topic. The framework presented is based on a discovery from the late nineties, when a large set of more than 2000 successful innovations were analysed to identify patterns for success. The resulting insights are described in the book from Larry Keeley, “Ten Types of Innovation:The Discipline of Building Breakthroughs“. In a nutshell, the resulting framework  provides a structured approach to innovation by taking learnings from largely successful companies and dividing these into ten types of innovations.

From ten types of innovation…

Often when people think of innovation, the first thing that comes to mind is product innovation. The ten types of innovations forces you to think about more than just product innovation, which is referred to as innovations in offerings, it also helps you to think about innovation in the approach and innovations in the experience. Most of us, especially working in high-tech companies, are familiar to the innovations in offering, which are these functionalities and features that make your product unique or platform stick out of the crowd.  So out of the ten innovations only two are focusing on the offering, the product innovation and the system innovation.  Just focusing on this type of innovation is usually not enough to stick out, you need to think about innovations in approach and user experience.

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The innovation in approach, referred to as innovation in configuration, addresses four innovations: innovations in the business model you select, innovations in the way you take the product to the market including ability to leverage on assets of a partner network, innovation in the processes and the innovations in the way you use your own assets, i.e. structural innovations. A good and well know example, that uses a couple of these configuration innovations, is that of Canadian Gold Corp. It is a mining company that a few years ago was struggling with prospecting for gold. The small team of in-house geologists was unable to estimate good enough gold prospects on the GoldCorp property. Rob McEwen, CEO of GoldCorp decided then to publish all of his geological data on the Web and challenged the world to do the prospecting, the challenge was rewarded with a total prize of $575,000.News of the contest spread quickly around the Internet and more than 1,000 virtual prospectors got busy crunching the data. The challenge lead to discovery of 8 million ounces of gold, worth well over $3 billion. The example also shows the power of crowdsourcing.

Similarly experience innovations can lead to great returns. There are four innovations on the user experience side: they relate to innovation in customer engagement, innovation in brand identity, innovations in services and channels.  Starbucks is a well know example of such experience innovation, for them the engagement with the customer is more than just coffee, it is personal. Starbucks has managed in many ways to fill in the role of a “third place”, which is the most important place you willingly go to in-between the other two places which are home and work. It has become “a comfortable social gathering spot, away from home and work, like an extension of the front porch”.

What is interesting is that many of the successful innovations are focusing on more than just offering innovation and are ticking of several innovations in the three categories mentioned above.

…to the ten faces of innovation

So now we understand what type of innovations are important and we have a framework that can help us to structure our thinking and approach to innovation. Still, in the workshop we run at the seminar, most of the ideas and outputs of the teams were around product and system innovations only! Why that? I believe this has to do with our background and experiences. In order to really leverage on from the framework, you need to be able to get yourself into different roles. This is when I thought about the books from Tom Kelley, in particular the ten faces of innovation, which describes different roles to take in the process of innovation.

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In the book the ten faces of innovation, the author introduces ten distinctive roles that are key to innovate. The roles are the following: Anthropologist, Experimenter, Cross-pollinator, Hurdler, Collaborator, Director, Experience Architect, Set designer, Caregiver and Story teller.  In essence each of the roles brings a unique point of view and helps create true value in the innovation process. Now, I will not go through the roles in details, but I will give a few examples on why these roles matter. Some of these roles , like the experimenter, collaborator or  director roles are probably not that new to us and you can find them in most organisations, some others are probably non-existant and will limit our abilities to innovate.

Take the role of an anthropologist, why does that role matter? For a start the anthropologist takes unbiased notes on how people interact, this is quite useful to identify where real problems arise. Following  a doctor for 24h during his shift in a hospital and writing down everything that happens will provide you very different insights on the needs of that doctor and the hospital than a pre-canned survey which normally contains targeted questions. You need to be able to take an anthropologist mindset if you want to understand how to create value in experience. Another interesting role is the cross-pollinator, this is a person that is good at gathering learnings from other industries and helps to apply them to your environment, telcos can for instance learn a lot about loyalty programs from Airlines or other companies in the services business. On a side note, when it comes to areas like innovation in environment and sustainability, there is a whole science developed around cross-pollination, it is called bio-mimicry and it focuses on reusing learnings from nature to solve complex environmental problems. Another role, the one of story teller is certainly key to create customer engagement.  If you get a chance to read the book “Start something that matters” by Blake  Mycoskie you will see what I mean. The author is the founder of TOMS, a social business, which promises to give away a pair of shoe to children in need for every pair of shoe it sells. The huge success of this company is certainly due to the story it conveys and how people relate to it.

So while individuals in a company can take on multiple roles, and while they can use the framework to get structure around the innovation process, their skills and background will often not allow them to take on all these roles and I think this is where the process generally fails. New skills and competencies have to be injected in the company, either channeled, crowd-sourced or otherwise added to projects to get to breakthrough innovations.

How to establishing a culture of innovation?

The challenge of establishing a culture of innovation is slightly different for start-ups than it is for larger companies. For smaller companies, where innovation is often at the heart of the business, I think the framework can quickly be used to validate the innovations and see where the value will be generated, while the roles defined in the ten faces of innovation could be used to validate whether you have the right mix of people that can take on some of the roles described earlier. The incubators and accelerators can also help you fill in the blanks during that process.

For larger companies, it is certainly a much bigger challenge. Changing a larger company’s culture is not an easy task. Larger companies are often optimized for cost and output. Projects that don’t have a clear business case from day one are usually not invested in, company’s HR departments might not allow you to hire people that do not fit into their existing career models, innovation investment boards are often lacking experienced entrepreneurs and are mostly composed of finance people that have never started a business, many hurdles to overcome. To overcome these hurdles requires top level commitment and different types objectives need to be deinfed. Many companies have actually managed to get around these challenges by creating an innovation culture which introduces new approaches, new KPI’s and by injecting new skills. In telecommunications,  AT&T is a good example of a such a company that has introduced an innovation culture. They introduced the Foundry concept, which works like an incubator/accelerator within the company, but then they have also invested in news skills, like for instance setting up a medical department with a Chief Medical Information Officer. When starting to grow in the digital health business they have addressed the different types of innovations, but they have also onboarded people that can the innovation roles of caregiver or cross-pollinator.

In any case I believe any change management program that aims to establish a culture of innovation should inspire itself from the 10 ten types and 10 faces of innovation.