Innovation, and its allied concept, entrepreneurship, are all the rage in education today. Courses and programs on entrepreneurship are increasing exponentially on campuses across the country, and the first few programs in innovation are appearing, such as the University of Colorado at Colorado Springs’ Bachelor in Innovation degree and North Carolina State’s Master in Global in Innovation Management degree. Politicians and academics proclaim that university research and development “drives the economy,” or that “we must innovate our way out of the recession.” Locally, UNC-Chapel Hill’s chancellor recently co-authored a book on the topic entitled Engines of Innovation, pushing for academia to become the center of economy.
While academics and pundits can hypothesize and theorize, sometimes it is best to talk to somebody who has a long track record of producing innovations that make a profit. Rich Cheston has had many titles at personal computer manufacturer Lenovo, the Chinese company that bought out IBM’s PC division in 2004. His current title is the “Chief Technical Architect” of the Software & Peripherals Business Unit—but his favorite is “Distinguished Engineer and Master Inventor.”
Cheston is heavily involved in the development of new features for personal computers, particularly for Lenovo’s commercial clients, and has produced over 70 patents in his 28-year career with IBM and Lenovo.
Yet, despite his illustrious career creating new ideas and solving problems for a computer manufacturer, he was not educated as an engineer or computer scientist. He earned a B.S. in Chemistry from Stetson University and an M.B.A. from Nova Southeastern University (with a short stint as a minor league baseball pitcher in between).
He was kind enough to take time out from his annual deer-hunting vacation to speak with me over lunch at the Silk Hope Grill in tiny Silk Hope, North Carolina. I probed his thoughts on the nature of innovation, on whether universities really drive the economy, and what innovation is coming down the road with the potential to change our lives.
1. On Innovation
Innovation is most likely to occur “when you bring technologies together that have never been brought together before,” Cheston said. He added that “if you look at my 70-plus patents, there are oftentimes clusters of five or ten” that result from such a pairing. He mentioned one invention he worked on that was made possible by pairing the accelerometer—a sensor used to detect changes in velocity in, for example, automobile airbags—with computers. The devices had been around for years, Cheston said, but only when they became extremely cheap to manufacture did IBM use them in computers to detect sudden changes in motion—such as happens when their owners drop them—so that the disks could park themselves before contact to avoid serious damage.
“There are many ways to achieve innovation, but there are certain correlations that hold,” he said, mentioning some facts from Managing Innovation: Mining for Nuggets, a 2002 book by John Huber, a former new product development manager with 3M Company. Huber tried to discover the correlations between the select few people, such as himself and Cheston, who hold many patents. This “psychographic” analysis had some surprising findings. One was that people who play musical instruments tend not to be prolific inventors. Of particular interest is Huber’s discovery that serial innovators tend to have had undergraduate grade point averages less than 3.5 (on the standard 4 point scale).
That would suggest that people who go into academia and natural innovators have different mindsets, since future professors almost invariably get top grades as undergraduates in order to get into the best graduate schools. It may be that, whereas academics seek to understand a subject in its entire breadth and depth, innovators are more focused on learning what they need to accomplish a specific goal, and nothing more. “There were other things a lot more exciting to me than reciting something out of a book,” Cheston said of his undergraduate education.
Intensely hard work is another key to creating new, useful things. “I don’t know why people think up ideas. I mean, there’s a lot of smart people at IBM and Lenovo and I don’t know why they don’t think of new things and I do. But I do know that I put effort into it.”
Nor is it easy. Cheston said that his 40-minute commute to and from his Pittsboro farm to Lenovo’s research campus in Morrisville is often his most creative time of the day. “When I get in the car and drive 40 minutes to work, I don’t turn on the radio. I’m trying to think of a new idea, and sometimes it hurts, because you sit there and start going through scenarios and you’re trying to change variables in your head and you’re trying to keep it organized—and sometimes it hurts, and I want somebody else to think for me for about a second.”
Yet, sometimes ideas just happen unexpectedly—after lots of long, hard thought. One hit Cheston while he was hunting in a deer stand twelve feet above the ground. It was set in motion when one of his former bosses told him he wanted to start his own company and hire a bunch of his friends.
“So he asked me, ‘what should I do? Did I have any ideas?’ I said ‘no, but I’ll think about it.’” He said he rejected quite a few ideas, but he “just kept cycling things through his mind.”
When the idea came to him, he immediately knew it was going to be a big one. But it became the “one that got away” because his boss “ended up going to work for Intel and didn’t act on it…that’s the other part—you have to act on it.” But the concept he conceived on the deer stand to help his boss strike out on his own was similar to the concept behind Groupon, an Internet marketing company that focuses on providing customers with a “deal of the day.” Because of that concept, Groupon today is perhaps the fastest growing company in the United States.
The sense of urgency that comes from the fear of failure also spurs creativity, according to Cheston. “I’ve seen a lot of my friends exit the business,” he said. “If I can come up with an idea that creates another hundred million dollars worth of business that keeps myself and my friends employed, that’s serious motivation.”
2. On Universities as the Innovative “Engine of the Economy”
Cheston is extremely skeptical of the idea that universities play the central role in innovation and the economy. “Are you telling me they know our business?” he asked rhetorically, with emphasis. “And what it takes to make money?”
His skepticism stems largely from the fact that universities lack the external influences that produce a truly innovative environment. For one thing, he said that they are “so removed from the customers.” Customers are an invaluable “source of input” when determining his business unit’s next moves.
“I meet with a lot of customers,” he said, and he attributes a large part of his success to their input. “Whenever I’m presenting to a customer and they say, Rich, that’s cool, but here’s our real problem, I’m taking notes, because if it’s a problem, the existing solution—if there is one—isn’t adequate. And if I can come up with a solution, it’s probably patentable, but more important, it’s meaningful.”
Cheston is adamant that need—whether it is the customer’s need for a new product or the corporations’ need to make money, or the need of individual workers to keep their jobs—is behind most economically viable innovation. “Whoever said necessity is the mother of invention was extremely insightful,” he said.
Academics often have other motivations than profit and that can mean less focus on producing products that gain market share. “It’s not about people being entertained. It’s not about people being fulfilled. It’s about a business surviving and competing in the global economy,” Cheston explained.
Another ingredient missing in academia is a focus on dollars and cents. “I can’t tell you the number of inventions that come out for, for example, a ThinkPad or a Notebook. But if it costs more than a couple cents, it’s not going to see the light of day. Because we know that Coca-Cola and Merck, when they go to look for new computers, they’re not going to spend an extra $10 or $100 for some feature that’s peripheral to what they bought the darn thing for in the first place.”
“There’s a very slim possibility that what’s done in a pure research and development environment will ever become a successful product,” Cheston said. “You can have the best idea in the world, but if some corporation can’t make money on it, who cares?”
Furthermore, a university does not function the way a profit-seeking corporation does. Cheston explained that “everything that’s sold today has a business management system that’s a set of metrics, and I don’t see that in academia. It’s very important to have a business management system in place so you can determine whether you’re on-course or off-course and make corrections. And it’s important to have the goals stated where you can measure them.”
3. On the “Next Big Thing”
The next big thing that is going to have a major impact is already here, according to Cheston.
“Cloud computing will change the world,” he said. Essentially, the cloud creates a virtual computer network across the Internet that enables a shared usage of resources. He said that, like many dominant innovations, it will go through three phases, and right now, it is in the first of them, “one of efficiency, scalability, and agility.”
Cheston used Lenovo as an example. Typically, Lenovo’s website gets tremendous spikes in visitor traffic when “we release new drivers the first week of every month,” he said. And the company “had to have enough computing power to cover those spikes [in usage],” he explained, but traffic was much slower the rest of the time, and the computers sat idle.
The cloud, Cheston continued, permits Lenovo to rent the extra capacity only when needed, as users of electricity do now, greatly reducing the company’s expenses for equipment.
Cloud computing will be a great boon to innovation, since start-up companies will no longer be forced to sink a lot of money into equipment to get off the ground. Instead, they will be able to get much of what they need from the cloud for a lower initial cost, according to Cheston. This in turn will permit them to achieve profitability faster and increase their chances for survival.
“The second phase will be about process change…the cloud will create new ways of doing things.”
He said that the some cutting-edge companies are now starting to figure out how to use the cloud to improve processes. He offered the computer security companies Symantec and McAfee as examples. Instead of scanning actual computers for viruses, these companies now run Internet communications through their software in the cloud first before allowing the computers to download it. “Because if it’s infected, I’d much rather deal with it before it gets to your computer.”
“It’s like creating a demilitarization zone around your computer out there in the cloud.”
“The third phase is where the cloud creates new businesses,” he said, “where none of them were considered possible before. Just like with the Internet. Before that, eBay didn’t exist, and Facebook didn’t exist. Now, the cloud will create new industries.”
Now that the cloud is coming, Cheston says his job is to capitalize on it. “What at Lenovo can we do differently to create, to invent, that makes our devices better cloud devices than the competition?”