After analyzing ten IBM case studies of innovation at work, Palo Alto-based innovation consultant Michael Osofsky has constructed a mathematical equation for innovators that takes into account the importance of market insights and technological know-how. As Osofsky explains, IBM demonstrates this equation empirically through 10 examples.

For example, consider Cemex, ranked #451 in this year’s FORTUNE Global 500. The company understood that a key business driver was the amount of idle time for its expensive equipment. By leveraging a satellite-based technological solution as well as state-of-the-art scheduling software, the company was able to reduce its cement delivery window from 3 hours to 20 minutes.

Tags: innovation equation

[graphics: Michael Osofsky]

The current issue of FORTUNE magazine features a great story about the “lunatic fringe” and the culture of innovation at tech industry pioneer Texas Instruments. Apparently, the key to innovation success at the company has been the ability to create an environment that is supportive of “managed chaos.” As Peter Lewis of FORTUNE explains, it all started with “a small group of crazies” (the lunatic fringe, if you will) who are convinced that giving free rein to “wild-eyed optimists” is the secret to innovation success:

“Gene Frantz [a business development manager in the digital signal processing group] is the dean of an informal and amorphous group of TI engineers (and their peers and contacts outside the company) who call themselves the Lunatic Fringe. They are senior people who have been given free rein to follow their curiosity wherever it goes. “There’s this continuum between total chaos and total order,” Frantz explains. “About 95% of the people in TI are total order, and I thank God for them every day, because they create the products that allow me to spend money. I’m down here in total chaos, that total chaos of innovation. As a company, we recognize the difference between those two and encourage both to occur.”

Basically, the ideology of the Lunatic Fringe can be distilled down to two basic concepts: (1) Look everywhere for good ideas and (2) Worry about turning them into products later. Anyway, if you’re like me, it’s impossible to hear the phrase “lunatic fringe” without thinking instinctively of the chart-topping rock anthem released by Canadian band Red Rider in the early 1980s.

With that in mind, I’ve linked to this cool Sin City montage featuring the “Lunatic Fringe” song. As an aside: if you’re looking for a DVD to watch over the Labor Day weekend and are a fan of film noir and highly stylized graphic violence, check out Sin City. Not only does the film feature Bruce Willis, Mickey Rourke, Clive Owen and Benicio Del Toro - it also includes some unbelievable eye candy in the form of Jessica Alba, Brittany Murphy, Devon Aoki and Rosario Dawson (as a “machine gun-wielding Dominatrix-Hooker-Godmother”).

Tags: lunatic fringe TI innovation Sin City

[video: Sin City’s “Lunatic Fringe”]

In the August edition of its monthly trend briefing, Trendwatching.com suggests that even the best-informed business thinkers and management gurus are likely suffering from innovation overload: “We live in a world of absolute innovation overload: clever entrepreneurs, inventors, and marketers from all over are coming up with so many innovative ideas, that even innovation blogs have a hard time keeping track…” (Yep, that includes me!) With that in mind, Trendwatching offers three insights about the current state of innovation in an increasingly globalized world:

(1) Innovation isn’t rocket science. It’s an obsession with understanding or creating what makes consumers happy, what delights them, which problems they face, and then creating something that delivers to those needs.

(2) Innovation is not necessarily about serious people in white coats puttering about in R&D labs. In an experience economy… marketing innovations rule.

(3) Wherever you live, you have absolutely NO excuse to be unaware of innovations popping up in Austria, in the Netherlands, in Japan, in Brazil, in the US, in Turkey, in South Africa, as it’s all out there.

Tags: innovation overload

[graphic: Trendwatching.com]