Saul Kaplan, Founder & Chief Catalyst, Business Innovation Factory 07-31-09 Interview

1 Interview and transcription July 28, 2009 Saul Kaplan, Founder and Chief Catalyst, Business Innovation Factory, Providence, Rhode Island A Community of Innovators Transforming Systems in Health Care, Education & Energy A. CATEGORY – Open Source Economic Development 1. What are you passionate about now? 2. What would you like people to know, think, feel and do? 3. What do you see for the future? INTRODUCTION Hi, my name is Saul Kaplan. I am the Founder and Chief Catalyst of the Business Innovation Factory, or as we like to call it, BIF. It’s great if you ever get the opportunity to create your own title, which I got to do here since I founded the organization. I call myself the Chief Catalyst, I remember back to my high school days, to high school chemistry, where I learned that a catalyst was a re-agent that got the reaction going, but then got out of the way once it was going. I also remember it never got used up in the reaction, and I liked that part. We’re trying to catalyze a real world laboratory to mobilize systems level change in health care, education, and in the energy space. All three of these things are systems level problems. They are well-intentioned systems, and sometimes I call them rugby scrums where all the players are battling and protecting their interests trying to improve their competitive position, but change is very, very difficult, as we all know in these environments. I believe that what we need to do is learn how to do is R&D for new models in systems. Where are we going to explore a better way to deliver value to the patient in health care, to the student in education, or to the citizen in the energy space? Here at BIF we’re creating a community of innovators around the country that are networked together and we’re trying to make those networks purposeful in those areas that we focus on by creating real world labs where you can experiment with new solutions. Some specific examples: we have a patient focus lab called, “The Nursing Home of the Future”. We’re trying to rethink and re-envision the elder experience. The system we have in place in this country that cares for our elders is exploding at the seams Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

2 and that’s before the first baby boomer even hits the sixty-five year-old scene in the year 2011. There’s got to be a better way, there’s got to be a better system where elders can age at home where they want to age with dignity and have a physical environment and a set of care elements of a system that are able to deliver better care for less money. We want to take that theory and put it on a real world test bed to determine what works, learn from what works and to learn from each other. We’ve got a very similar lab in the education space called, “The Student Experience Lab” where we just got a grant to understand the college student’s experience through the lens of the student. So many of these conversations are institutional leaders that get together to debate amongst themselves how the system needs to change. There’s no voice of the student in these innovation conversations and we try to bring that voice into the conversation and then create an environment where we can think about better ways to deliver value to the student that might cut across the public and private sector, might cut across silos, and force us to collaborate in a new and different way. So, really what we’re trying to do is to mobilize systems change in areas that are really important to all of us regardless of whether we sit in the public sector or in the private sector and we’re trying to create an actionable platform where we can take ideas from the whiteboard and move them on to the ground. [00:03:45] My passion is R&D for new business models in systems. I don’t think tweaking the systems we have in this country are going to create a kind of country we all want to live in, create a positive future for our children and for our grand children. So, I think we have to get below the buzz words of innovation and we have to start rolling up our sleeves and demonstrating that all of this great technology that we have available to us today, can actually be put to good use to solve the problems that we struggle with every single day. We don’t want to sit around the table and talk about it, we want to roll up our sleeves and try to do something about that. I’m very encouraged today about the opportunity. I think there’s a window of opportunity right now that all of us can take advantage of and I believe that this statement of “A crisis is a terrible thing to waste” is true. This is our time. This is the innovators day. One of the things that encourages me the most is the next generation, the millennials or the “Y” generation give me great hope for the future. I know I have three millennials in our family. They are wired to connect, they are wired to collaborate, they have a very healthy distrust of institutions and how slow institutions are to deal with the problems we’re stalled with, and they have no patience. In my era, the only thing you could do is you could get a picket sign and go out and protest. Now the millennials are mobilizing, they’re self organizing, they’re connecting with each other and they’re not waiting for institutions to move towards some of the new system changes that we all want. That’s a very, very positive sign and I think it bodes well for the future. I think most large institutions, public or private, could learn a lot by watching how the millennial generation processes and shares information, how they collaborate, and how they work together with a common purpose to get more stuff done. I think we just have to just get more stuff done and experiment more than we do today. Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

3 What value do you see Open Source practices offering to innovation in a networked world? [00:05:54] Open Source is a really important idea and I think we’re just learning how to take advantage of this idea. Too many of us are dinosaurs, I know I am, I grew up in a hierarchical world where you were in an organization with functions where you know exactly where you were in the pecking order. Everything you did was systematic: you did this, then you did this, then you did this. Today we look at a network world. Everything connects to everything else and communication happens in an entirely different way than the way I was wired as a dinosaur. We have to learn new tricks and we have to hurry up and help the millennials provide the impetus for us to make the changes that we need to make. But there is no question that this idea that “I have the best idea, therefore you should follow me and you should do what I say the way I say it, is very old thinking. New thinking is, one of our advisors here at BIF, Roger Martin, says that the way you define an innovator as somebody who knows they have a strong point of view, they’re confident enough to put their point of view out, but they know that they’re missing something. They know they’re missing something and they’re on a mission to find that missing thing and the only way they’re going to find it is by exploring across silos and the grey area between silos to find the thing that’s gong to make their idea better and more likely to happen. That thinking leads you to open source, it leads you to put your ideas out on social media platforms and welcome additions and changes to your ideas. It means you’re going to find and connect to people who can help you to implement what you’re trying to implement and you’re not going to wait for institutions and the rigidity within institutions to constrain you, you’re going to connect with them using technology to enable you to do that. I still think it’s early days, you know we see all the examples in the software world that work, where we all know and love Wikipedia, and see those examples, but when you start to apply that in the physical development domain, in the capability in large organization or system domain, they haven’t figured out quite yet how to apply it, but we will, but we will. You can see social media platforms just coming into their own and enabling people to self organize and to share and exchange ideas. The next thing we have to do is we have to make the platforms actionable. I often say we have to make the networks purposeful, that we have to harness all of this energy on these social media platforms not just to talk about and exchange ideas, but to roll up their sleeves and start to work on things that can improve some of these important systems that we’re working on. B. TOPIC - Innovation Framework 1. What category of the Innovation Framework do you primarily invest your time and attention? Brainpower? Networks? Quality, Connected Place? Dialogue and Inclusion? Or Branding Stories? 2. What secondary categories are you interested in? 3. Which category would you like to collaborate with next? [00:08:58] So, to get below the buzz words of open innovation and to actually put it into practice in the real world, there are three areas that I think you really have to focus on and Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

4 I’ll do them in order of priority, although they all are I think important in connecting with each other. The first thing is, it has to be purposeful. There has to be a reason, there has to be a vision that people can buy into and share that says this is the hill we’re trying to take. You know, we’re trying to transform the health care system, or we’re trying to transform the education system, there needs to be a clear purpose with a clear understanding that the current system can’t get us there. We have to start experimenting with new systems; now, how do we go about doing that? So, the first thing is purpose. The second thing is you have to activate a network that is a two-way conversation, not a one-way conversation. We, again as dinosaurs, grew up in a one-way communication world, You know, we figure out what the right message is, we figure out how to package the message, we control the distribution of that message, and then we just pat ourselves on the back because we just executed a great campaign. It doesn’t work that way anymore, ideas come out in bite sized chunks, they get mashed up in the network and they get improved, new people come in to support the idea and this happens more virally today and you can see it happening as you explore some of the new social media platforms to do it, so it has to be two-way, it can’t be one-way anymore the television era is over. We get bored watching a one-way communication device we want to interact with it and I know the millennials want to interact and live on interactive platforms. The last piece that’s really important to us is storytelling. It is so important that we are effective at telling our story. If we’re trying to transform health care we need to create emotional connections with enough innovators to be able to get to Malcolm Gladwell’s, “Tipping Point”. The only way we’re going to do that is if we’re effective storytellers and can expand our networks and create emotional connections with more people that want to be part of the conversation and be part of that network and you have to constantly be working on storytelling, it’s not just the final report. Again, when we grew up, it was you did a project and at the very end you produced a report and then you were proud that you could get people to read the final report. Today, it’s talking about the project every single day, and, “How’s the project working?” “What isn’t working?” and then putting it out to an external network that then helps you to improve it and the process and the deliverable, and then it’s a lot more likely that more people are going to buy into the solution and help move the solution around the country the way we need it. So, this is the way we’re going to go from a real world laboratory here at the Business Innovation Factory, to disseminating our ideas and our practices in a way that others can learn from, others can experiment with, we can learn back from those experiments, and then together we can start to mobilize the system change that we need in this country. C. ACTIVITY – Strategic Doing Explore and Research 1. What research areas interest you? Why? 2. Who would you like to be connected to that you are not? 3. How will your research serve the sustainability of communities and their regions 50 years from now? Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

5 [00:12:17] I love the expression, “Strategic Doing.” In a lot of respects, I think that defines who I am. I’ve always been in this grey area between setting strategic direction and having the operating capabilities to be able to move towards that vision and achieve it. To me, the most interesting place has always been in the grey area between that, where you can try to make those connections. As I understand, the idea of Strategic Doing, it is a more iterative process rather than a sequential process that we need to experiment more, I often say that we need to try more “stuff” and we need to get better at observing how the new stuff works and determining how we can improve on it and I don’t think the learning ever stops. The way we think of R&D today is very product, technology oriented. We all have in our minds this picture of R&D for a new product; R&D for a new technology, but nobody really knows how to do R&D for new business models or new systems that that is more about how we deliver customer value and then what products and services and delivery vehicles do we need in order to do that? So, I think we need to flip the whole thing on it’s head and we should be experimenting in the real world from an idea to a rapid prototype of a real world simulation of that systems so that we can take the learning’s from that and create a whole new set of products, services, and business models to do it. [00:14:05] One of the things I’ve been doing a lot of is hanging out with designers. I’ve always, I was brought up as a road warrior consultant and had a traditional MBA analytical oriented political approach to things. Every report had chevrons, you know, you do this, then you do that, then you do this. In this new-networked world, I’m not sure that’s the best approach. I actually like some of the thinking you see in the design community for the design around a process which is more of an iterative approach that starts with understanding the customer experience and then begins to design or architect ways to deliver value. I’ve been hanging around a lot of designers hoping that some of that thinking will rub off on me and on some of the others in our Business Innovation Factory community. [00:14:53] So, I talk a lot about bringing together the usual suspects. You know, it’s this idea of breaking down the barriers to working affectively across silos. I learned this when I was in the public sector for a couple of years. On Monday, I would meet with the health care crowd that was passionate about changing health care; on Tuesday, I would meet with the energy crowd and they were just as passionate about becoming green – and, you get the idea – and on Wednesday was Marine, and Thursday was…and every day I always wanted to take those silos and say, “Can I take the innovators from each of those silos and can I bring them together and connect them in a purposeful way?” Because I frankly think we’ll have a better chance of fixing health care if we start bringing ideas from outside of health care inside to the innovation discussion. The same thing is true in education; we have to get beyond the usual suspects. Everything we do here at the Business Innovation Factory, including our very successful summit that we have put on every October, this is our fifth Summit this year. We were very excited this past week; Mashable named us one of the top seven places in the country to watch great minds in action. We’ve built a very special community and every October we bring them together in an intimate way, there are three hundred innovators from around the country that come together to exchange and share innovation stories across every imaginable silo, and the Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

6 best stories every year are the innovators that completely surprise you from areas you would never even think to look to hear a story of how people have re-configured their resources to deliver better value to their end customer. We’ve heard stories from police chiefs, from business executives, from artists and designers, and then we put them together and we watch the magic happen by helping them, making it easier for them to connect with each other. It’s that environment that’s really creating a lot of the energy that we have today in the Business Innovation Factory. Focus and Networks 1. What networks are you building? Why? How? 2. What criteria do you use for mapping knowledge networks? 3. What criteria do you use to identify best practices in those networks? [00:17:07] So, I sort the world by trying to identify that the innovators are. I used to, all throughout my private sector career, I used to believe you could proselytize to convert people to innovators. That, if I talked enough, if I lectured enough, if I taught enough, if I created better workbooks, and better case studies and better working sessions, that I could create more innovators. I don’t believe that any longer. Maybe it’s just that I’m old and I have too many black and blue marks, but I don’t think you can convert someone to be an innovator. I think you’re either wired to be an innovator, or inclined to be one, or you’re not. My new strategy is to find the innovators. Across every silo we can imagine. We’ve gotten very good at figuring out behaviorally, who is or isn’t an innovator, who’s more inclined to try a new things, who’s more inclined to resist new things, and you can segment the people in that way. You can also segment organizations that way, because it’s not that an organization is innovative or it isn’t; it’s, are there pockets within the organization that are able to mobilize innovation? In fact, I believe we don’t need everyone in our organization to be an innovator. In fact, I want most people in our organizations to be peddling the bicycle of the current business models so that we can sustain the organization; I want them to be creative, I want them to work collaboratively in doing their work, but I want the innovation to happen in a discreet group, that’s thinking about potential new futures for the organization particularly new futures that might be disruptive to the way we currently deliver value, and that’s the hardest part, right? Because organizations don’t naturally disrupt themselves. So, what we’re trying to do is make it safer and easier to explore business model innovation and to experiment with new approaches than it would be otherwise. We’re on a mission to help innovators to understand how to access tools that can help them be more innovative, deliver more value in the projects that they’re working on. Execute and Enterprise 1. What is the next enterprise opportunity that you see? Why? 2. How much time would you like to spend on this opportunity, from idea to execution? 3. Whose insights and guidance do you/would you engage? 4. What benchmarks and measurements do you use in your work? Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

7 [00:19:28] We think the best way to start is to pick some very big hairy problems that we’re dealing with as a society. Again, because I think these are all systems problems. So, we pick the same ones that President Obama picks, that all state leaders pick, we talk about health care, education, and energy. These are the three systems areas that I think we can all agree that the current systems are not delivering the way we want them to. But we don’t have a road map or a path for how to change that system. Everybody points to everybody else in the rugby scrum. “It’s the government that needs to take care of it.” “No, it’s the private sector.” “It’s the colleges and universities.” We all point at each other and then nothing happens. So, we need to create safe spaces that we can experiment in and that’s what we’re trying to do in those three areas, so we’re very purposeful and we’re creating networks and communities that are interested in those three areas and interested in sharing learning’s and ideas across those three areas so that we don’t recreate the wheel in any one of those areas. We have projects that are going on right now here at BIF in the patient space, I mentioned the elder project earlier, I also mentioned the student project, and the third project we want to start is in the energy space. I think it’s really important of bring the voice of the citizen into this conversation for us to be able to understand the behaviors of homeowners so we can understand what it’s really going to take to better manage our energy utilization pattern. Where’s the voice of the citizen in this? We have lots of fancy new tools and technologies, all the institutions are talking about what that new green ecosystem needs to look like; we want to bring the voice of the citizen into that, we want to start experimenting with how we do a better job in our own homes. Here in Rhode Island, over 50% of our energy costs are in our own homes and driven by our behaviors. If we could start to understand those better, I think we could start making a better case and provide better tools to solutions to enable us to become more energy independent and I don’t believe the current system that’s in place today is going to result in a meaningful movement toward that objective. Performance and Education 1. What information do you share with others? 2. Do you participate in collaborative leadership? With whom? Why? 3. What next steps do you envision to pro-actively respond in education, economic and workforce development? 4. What next steps do you envision to pro-actively respond to the powerful topics affecting communities and their regions, such as: climate change, green job creation, water, land, energy, technology, and health care? 5. How will your research/business serve the sustainability of communities and their regions 50 years from now? [00:21:55] So, let me see if I can wrap this all together and bring it back to your community. Where you live. What does this really mean to you? One of the things that was really enlightening for me, I had spent my entire career in the private sector, where I learned about innovation through the lens of a corporation. I did a lot of work and have a lot of black and blue marks around helping large organizations think about new capabilities and new business models or ways to deliver value to their customers; but it Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

8 wasn’t until I came out of the consulting world and I made the mistake of raising my hand to the then newly elected Governor of Rhode Island saying, “How can I be helpful in my own community?” I had lived here in Rhode Island but had been a road warrior traveling most weeks and I wasn’t paying much attention to what was going on in the local community and I started looking at the local community and saying, “We’ve got to rethink the way we approach economic development and I had the good fortune of spending six years working in the public sector, working for the Governor first leading all of our customer contact related activities and shaping an innovation strategy, a 21st Century innovation economy strategy, and then putting into place the programs and platforms to be able to execute that. I was subsequently asking by the Governor to become his top economic advisor and ran the Economic Development Agency for several years. I’m no longer working in the state governments, so I can now look back at that period and I can honestly say that looking at innovation through the lens of the community was a really, really important vantage point because it’s a different lens than looking at it through an individual organization. You can think about it through a corporate lens, through a public agency lens, through a university lens; innovation is hard enough when you think about it through the context of your own organization to solve the big systems solutions that we need to work on; it’s going to require us to work across those boundaries. We have to dissolve those boundaries between the public and private sector, between industry “x” and industry “y”. We have to get back to redesigning new systems that deliver to the end customer, the patient, the citizen, or the student, and we need to experiment with doing that that’s unconstrained by the current boundaries in sectors. So, we created BIF as a real world laboratory, both to create better solutions in health care education and energy, but also to start pointing us towards a new economy that takes advantage of our best asset, our “Brainpower”, puts it to work solving real problems, creates new organizations, creates new industry sectors that we can lead that will deliver better and higher wage jobs to our citizens, and if we don’t get it on with moving aggressively toward that vision, we’re going to fall further, and further, and further behind. So, I feel very strongly that we need to rethink the way that we approach economic development and begin to understand what innovation to capacity looks like at the community level so that we can increase that capacity and improve the conditions that will allow innovators in the private sector to do what they do best. Which is create new solutions, figure out how to deliver those solutions, we just want to harness and point it towards some of the bigger issues that we’re all struggling with regardless of what sector we live or work in. Closing Would you talk about your insights into business development opportunities today from your years of experience as an economic development practitioner? [00:25:54] When I took the job in the public sector, I got a lot of ‘interesting’ looks and some pointed questions from friends saying, “Why did you do that? Doesn’t the government move too slowly? Saul, you’re a bounce-off-the-walls kind of guy! How are you going to sit in the government sector?” And I thought about it, and my answer was, “I just spend twenty years working in the corporate sector and companies don’t move so Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

9 fast, I’m pretty sure of that, and yeah, you’re right, the government doesn’t move very quickly, but I love to tease my friends in academia because I’m completely convinced that academia moves more slowly than the other two!” The real serious point is, all organizations are the same, it really doesn’t matter, these organizations delver value to the end customer, whoever the end customer is, they constantly work to improve it, and to get better, they constantly work to strengthen their position within the way it works today. That’s predictable, that’s healthy, and that’s a good thing. What we need to get better at is to create safe platforms to experiment with some different approaches, some new configurations that cut across those boundaries where we can find the innovators in academia, in the corporate world, in the public sector and NGO world, and provide neutral platforms where they can experiment with some new ways to solve these big problems that we have. We all know there have been more solutions than we have been able to explore. Experimentation is hard, particularly when you’re pedaling the bicycle as hard as we all are to keep the current model and systems working. But, we have got to get better at experimentation at the systems level because won’t fix health care and education and energy issues the way we want to until we learn how to do that better. So, platforms like the Business Innovation Factory, and connecting to other platforms that have similar capabilities or interests is in all of our best interests in order to nudge this country towards more systems level experimentation and real systems level change so we can deliver better value to the student, to the patient, to the citizen. Our generous thanks to Saul Kaplan The Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Floor Cleveland Ohio 44103 USA Copyright 2009 Betsey Merkel and I-Open Creative Commons License Attribution-Noncommercial No Derivative Works 3.0 United States Website: http://i-open.org Keywords Collaborative health care, networks, pediatrics, social networking platforms, quality improvement, medicine, education Related Links I-Open http://i-open-2.near-time.net/wiki/saul-kaplan-founder-and-chief-evangelist-business- innovation-factory Flickr http://www.flickr.com/photos/i-open/sets/72157621926598964/ Contact Information Saul Kaplan Chief Catalyst, Business Innovation Factory Principal, Innomodels Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

10 60 Valley Street Unit 25 Providence, Rhode Island 02909 401-270-5943 http://businessinnovationfactory.com http://innomodels.com http://www.linkedin.com/in/saulkaplan http://twitter.com/skap5 Website http://www.businessinnovationfactory.com/ Biographical Information http://itssaulconnected.com/about/ Copyright 2009 Betsey Merkel and I-Open. Creative Commons 3.0 Attribution- Noncommercial-No Derivative Works. Institute for Open Economic Networks (I-Open) 4415 Euclid Ave 3rd Fl Cleveland, Ohio 44103 USA

Saul Kaplan, Founder & Chief Catalyst, Business Innovation Factory 07-31-09 Interview

by Institute for Open Economic Networks (I-Open) on Dec 05, 2009

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Saul Kaplan, Founder & Chief Catalyst, Business Innovation Factory 07-31-09 Interview Document Transcript