June 8, 2005
Innovation: A Leadership Issue
By Bryn Meredith

The topic in the forefront of every senior executive's mind is "How do we become more innovative?" As we adjust our thinking, strategies, and modes of operation to compete in what is no longer the "new" global economy, I suspect many of you have sat in a meeting in recent months and listened to the tired refrains, "We need more creative people", "We should let our people know we like new ideas", "We should increase our R&D budget", "We must get new products to market before our competition", or the newest buzz theme "We should outsource our innovation. more

The World of Innovation
By Ron Crossland

Innovation, arguably, is the core business asset in today's market. If innovation isn't in your corporate bloodstream, then the resulting anemia will cause business vitality to drain away. Most businesses understand this, but many corporations have taken a dangerous approach to dealing with innovation issues. more

A Tale of Two Bosses
Crazy Times! David Parks (rt.) with former boss Tom Peters.

Ten years ago I took a big risk. I quit a great job in London and moved 6,000 miles to work for Tom Peters in Palo Alto, California. My former boss in London was very 'British' and very formal, having honed his leadership shills in the military. more

The Innovation Paradox
By Gregg Thompson

Never have we been busier in the corporate world. The advent of computer-based productivity and communication tools has allowed us to conduct more research, share more information, and work on more projects. But have these tools really helped those of us who toil daily in corporations unleash more of our natural creative talents?

Increasingly, we at Bluepoint are being asked to help train corporate leaders to create environments that will encourage people to work at their creative best. more

Target Trumps with Design
By David Parks

As I opened the Sunday edition of my local San Francisco Chronicle, the usual wad of inserts tumbled en mass to the floor. One shouted out. It was the distinctive red and white branding of Target. The insert lauded praise to great design saying "Great design is something that makes your life better. more

Book Review: A Whole New Mind: Moving from the Information Age to the Conceptual Age
By Ron Crossland

A Whole New Mind: Moving from the Information Age to the Conceptual Age
By Daniel H. Pink

Pink, a contributing editor at Wired magazine, and author of Free Agent Nation, just had his newest ideas released this past March. The fundamental thesis of the book is that we are leaving the age where logical processes alone (left-brain thinking) are sufficient for career or work. more

Innovation: A Leadership Issue

By Bryn Meredith

The topic in the forefront of every senior executive's mind is "How do we become more innovative?" As we adjust our thinking, strategies, and modes of operation to compete in what is no longer the "new" global economy, I suspect many of you have sat in a meeting in recent months and listened to the tired refrains, "We need more creative people", "We should let our people know we like new ideas", "We should increase our R&D budget", "We must get new products to market before our competition", or the newest buzz theme "We should outsource our innovation."

Regardless of viewpoint it is probable you have concluded that if you don't do something, you will get left behind. The status quo is no longer the status quo in the world of new ideas being exchanged, discussed, improved, and communicated across the world in real time. Status quo means you are decelerating compared to your competition, and before you know it you will see them in your rearview mirror as they prepare to lap you in the Innovation 500.

It is not just young visionary companies that consider innovation a priority. Take Microsoft for example, already a company with one of the largest R&D budgets in the world. Steve Balmer says he is wild about Microsoft's latest passion: innovation. "We are going to see more innovation in the next five years than we have seen in the past decade," Balmer told students, alumni, and press at Stanford's School of Business (May 05). "If we are not innovating fast enough, if we are not innovating big enough, then we miss an opportunity to win."

The view from the top of the hyper-competitive software marketplace is simple - the bigger the idea, the better.

Eric Schmidt, CEO of Google, suggested to a group of attendees at a May, 2005 IT expo that to encourage new ideas at your company, just listen as your engineers run wild. "We prefer them to run rampant. The cleverest ideas don't come from leaders, but rather from the leaders listening and encouraging and kind of creating a discussion."

Schmidt also encouraged executives to have an open door policy when it came to technology demonstrations. "You want to see every conceivable demo, no matter how whacky it is," he told the audience. "People love that. They get a chance to present to someone important like you. All of a sudden the whole (corporate culture) becomes about leadership and innovation."

Schmidt's advice seems in perfect harmony with the findings and suggestions of Michael Schrage, whose insightful book, Serious Play, details the importance of prototypes and the discussions they foster. "Good prototypes have 'charisma.' They create narratives... tell stories," writes Schrage.

Okay, you are not a frequently brandished household name company like Microsoft and Google. But small, mid-size, or a multi-national - we are all trying to achieve similar things in our own space, stay ahead or get ahead of the competition, and create growth. It might be worth asking yourself the question, "What happens if we don't build an innovative culture? How long will we remain in the race if our competition is lapping us?"

Fortunately, most of the corporate executives we speak with recognize the need for innovation. Sometimes they seem desperate trying to figure out how to create it. We suggest that Eric Schmidt revealed the answer when he said "All of a sudden the whole (corporate culture) becomes about leadership and innovation."

The first key principle required for innovation is not developing individual creativity alone, but creating a sustainable innovative environment. This is a leadership task. In order to succeed at this task, leaders must develop innovative abilities and develop them in their constituents. We call these Innovation Fundamentals. They must also be able to create and sustain a Culture of Innovation by using these fundamentals to maintain key organizational dynamics.

Leaders must be able to:
- Identify and overcome the basic barriers to innovation.
- Apply prototyping principles to organizational innovation.
- Create and deploy proven internal marketing principles to better incubate innovative projects.
- Provide appropriate stimulation for constituents.
- Create and maintain a culture of creative tension.
- Use an appreciative approach to maintaining energy and resolve to complete innovative projects.
- Maintain a culture of continuous play.

The second key principle required is to not get better at a portion of the above abilities, but to get better at all them as a system. Creating an innovative culture is without doubt a leadership issue but we need to develop all aspects of quality leadership in our senior teams if we expect to achieve our objectives on schedule.

Take a moment to consider your organization as a tropical fish tank in need of a good cleaning. You remove all the guppies and send them off to the local guppy innovation spa where they experience several fun-filled exercises that teach them how to be more creative in their ecosystem (tank). They revel in delight - some even begin to imagine they are sharks- their creative juices are so stimulated. When the spa is finished, these energized, creatively enhanced guppies return to the same dirty water. Strain as they might with their rejuvenated creative powers, they are beaten back by the daily feeding regime which never alters. They cannot get past the Save the Plants Committee or the Waste Removal Union procedures, so their new ideas get shot down at once. They try escalating their ideas to the angel fish that hover around the treasure chest, but these angels are too busy worrying about purification and aeration production to pay any attention. Plus there are rumors that this tank is soon to merge with a larger tank and everyone is scrambling, trying to gain some information about the kind of fish they will meet, whether or not the other tank is cleaner, and which fish will not make the transfer, because everyone knows when you merge tanks, some fish get caught in the transfer net.

As the guppies get dirty again amid the rumors and the tank's decreasing visibility, communication gets clogged, trust in the ecosystem erodes, and ideation is numbed by the humdrum of being back in the same old water.

Leading innovation is about cleaning the tank, not the fish.


Bryn Meredith is the President of Bluepoint Leadership Development Canada and can be reached at (905) 469-6526 or brynmeredith@bluepointleadership.com

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The World of Innovation

By Ron Crossland

Innovation, arguably, is the core business asset in today's market. If innovation isn't in your corporate bloodstream, then the resulting anemia will cause business vitality to drain away. Most businesses understand this, but many corporations have taken a dangerous approach to dealing with innovation issues. Looking for a quick anemia remedy, many have defaulted to outsourcing - in ways that may cause their companies to default. Some insist that Six Sigma processes can be reapplied to innovative situations. Some are simply in denial that they have an innovation problem.

Let's take the last situation first. Success may breed success, but it often breeds denial as well. Large scale companies are especially prone to denial. United Airlines and American Airlines saw regional carriers growing through innovation for years, but focused their attention on menus and uniforms. Nokia did everything the Nokia way. It manufactured everything it needed right down to producing its own microchips. Some claim that this was an indication of innovation, but Nokia began to understand it actually limited innovation. For years they were blinded in the glare of their own success. BusinessWeek contributors Pete Engardio and Bruce Einhorn reported on this denial condition and quoted Nokia's Chief Technology Officer Pertti Korhonen, "Nobody can master it all. You have to figure out what is core and what is context."

"The deeper issues of innovation resistance so common to large companies: the cognitive capacity to deny the need for change and the inability to commit to it before it is too late," write Liisa Välilkangas and Michael Gibbert in the Spring, 2005 edition of the Sloan Management Review. They conclude that the denial and resultant inability to commit spring from three primary sources which they term the performance trap, commitment trap, and business model trap. Each of these is a form of denial, but it is only one of the problems.

"Once Six Sigma language is adopted by the organization, it begins to focus on productive activities instead of conversation about productive activities," write Amemieke van der Werff and Tamara Tammen in The Knowledge Lens. The inaugural edition of this journal from Northwestern University is entirely devoted to the subject of innovation. And many of the authors suggest, as I do, that applying Six Sigma to innovation would be like asking Picasso to have painted by numbers. A lesson from Japan, perhaps the most revered Six Sigma region on the planet may shed some light on this phenomenon.

In the 1980s and 1990s, Japan tried to get a foothold in the developing biotech industry. But the basic Japanese innovation model failed in this important field. Leonard H. Lynn and Reiko Kishida completed a thoughtful study of what caused this failure and detailed their results in the December, 2004 issue of the Asian Business & Management journal. Their analysis about biotech likely has echoes in other industries. They found that:
1. Japan doesn't provide well for start-up companies.
2. Japanese universities are relatively weaker at developing new research programs and fostering new business than Western counterparts.
3. Japan's government spending on biotech R&D and basic science is a fraction of Western governments.

Reading the author's analysis shows that, in biotechnology at least, a rich innovation ecosystem is required that includes investing in start-ups, funding basic research, and gearing universities and industry to better work together. The Bayh-Dole Act of 1990 allowed US universities to move from conducting what was traditionally known as "public science" to the ability to patent technology and then sell these patents to industry. While there are advocates against this model, it has been supremely important in getting many new innovative ideas from ideation, to sketch pad, to incubation, to production. The authors show how Japan is attempting to adopt similar innovation practices.

What has this to do with Six Sigma? Japan is excellent at technology diffusion but not at technology invention . Some might argue that the US is just the opposite, with many start-ups having only an idea or a patent as their largest balance sheet entry. But the Japanese model of perfecting things has included perfecting the science of Six Sigma to the detriment of its ability to innovate. Lynn and Kishida concluded their article with the following statement regarding R&D, "Even if Japanese spending doubles over the next five years and US spending remains flat, the US would still be spending three to four times as much as Japan."

Yet there is something to learn about US R&D spending by looking at the numbers more carefully. Christopher Koch recorded in CIO online on January 19, 2005 that the amount of money going towards "research" has been declining over the past twelve years in the US and the flow of money has been towards the "development" end of things. This tracks with the trend, most easily seen in electronics technology, towards convergence. Once you have a cell phone, what else do you do with it? Add on a calendar, music player, video camera, and debit card (some experiments are under way in Japan for using a cell phone to purchase items from vending machines). These incremental, "developmental" improvements can be labeled as innovation, but they seem a distinctly different quality from the invention of the cell phone. These incremental innovations are perfect for the forces of Six Sigma. After all it is just a matter of putting previous Six Sigma proven designs together and running them through the Six Sigma machine.

Add Six Sigma to outsourcing and you start turning more and more to suppliers to provide innovation. This can create advantage, but there is a danger. As Engardio and Einhorn reported of Boston Consulting Group Senior Vice-President, Jim Andrew, "It is a slippery slope. If the innovation starts residing in the suppliers, you could incrementalize yourself to the point where there isn't much left."

With all this incrementalism, what is a company to do? They do what GE, Proctor & Gamble, Boeing, Dell, and Eli Lilly and a host of others are doing: outsourcing innovation to business partners and suppliers. Immelt, as GE's CEO, is going for both big ideas in the US as well as inviting greater participation for smaller ideas from all his global suppliers. R&D is the last part of the business model to be subjected to cost analysis, measurement, and redeployment.

But as Pete Engardio indicated in his BusinessWeek Online Extra, most of the outsourced R&D jobs are those at the maintenance end of the innovation spectrum. Auxiliary systems engineers for tech gear or documentation specialists for any new product are the most obvious, and most frequent, target of outsourced jobs.

The world has outsourced everything to India it seems. And India is grateful - it is now developing its own ability to return this outsourcing gift using the currency of innovation. Wipro Technologies and HCL have already demonstrated that their innovative ideas have global clout. Having restructured manufacturing for many companies they are now bent on restructuring design - the eye candy of innovation. In fact many OEM (Original Equipment Manufacturer) companies prefer the new moniker ODM (Original Design Manufacturer). We've outsourced to countries that have shown their ability to move quickly up the innovation food chain. Outsourcing innovation to save a buck can lose the balance sheet.

What can we learn from this series of events, reports, and analyses? I think there are three ideas worth considering as we examine the world of innovation.

Idea Number One: Determine the difference between core and context. Be careful to use outsourcing as a blind cost savings strategy. Incremental innovation may be aided by Six Sigma processes, but large scale innovation, the "what a great idea!" kind, is killed by it. Remember, Orville Wright did not have a pilot's license.

Idea Number Two: Innovation takes time. Outsourcing to simply save money or speed up discovery may backfire. Basic research, creating a rich environment, and investing in ideas, many of which will die off before yielding anything concrete, is the trade-off for the once-in-a-lifetime thrill ride that break-through innovation can provide.

Idea Number Three: Invest in innovation. Roger Martin, dean of the Rotman School of Management at the University of Toronto has reshaped his entire MBA program around the subject of innovation, design, and business. Reframing innovation as a way of thinking rather than a cost to be controlled requires a qualitatively different frame of investment than cost-cutting outsourcing does.


Notes
1. "Outsourcing Innovation," Pete Engardio and Bruce Einhorn, BusinessWeek, March 21, 2005.
2. "Boundary-Setting Strategies for Escaping Innovation Traps" by Liisa Välilkangas and Michael Gibbert Sloan Management Review, Spring, 2005.
3. "Lost in Translation," Amemieke van der Werff and Tamara Tammen, The Knowledge Lens 2005, Issue Number One, Northwestern University.
4. "Changing Paradigms for Japanese Technology Policy: SMEs, Universities, and Biotechnology," Leonard H. Lynn and Reiko Kishida, Asian Business & Management, December 2004
5. "Innovation Ships Out," Christopher Koch, CIO Online
6. "R&D Jobs: Who Stays, Who Goes?" Pete Engardio, BusinessWeek Online Extra, March 21, 2005


Ron Crossland is the Vice Chair of Bluepoint Leadership Development and can be reached at (513) 683-4702 or roncrossland@bluepointleadership.com

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A Tale of Two Bosses

Crazy Times! David Parks (rt.) with former boss Tom Peters.

Ten years ago I took a big risk. I quit a great job in London and moved 6,000 miles to work for Tom Peters in Palo Alto, California. My former boss in London was very 'British' and very formal, having honed his leadership shills in the military. The culture was all about command and control, hierarchy and operational efficiency. In fact you could say the company was run like a military battalion.

Transitioning from that situation to free-wheeling California is one thing - but joining Tom Peters Company (TPC) in the heart of Silicon Valley jettisoned me into a totally different stratosphere of innovation and excitement in my career. After all, Tom was the co-author of In Search of Excellence, the most famed business book of all time. He was also author of Crazy Times Call For Crazy Organizations, which definitely applied to TPC. The standard deviation for out-of-the-box thinking was extreme to say the least. Don't get me wrong, I had been innovative in my former job but it was limited innovation, innovation with my foot on the brake. My ideas were pretty safe, not too radical, not on the edge, because I had designed them to please the boss.

In most organizations the bottleneck that kills innovation is almost always located at the top of the bottle - the boss. Ironically, the strongest call for innovation comes from the senior leadership. Go to any corporate web site, look up the mission, vision and values and nine out of ten times you will see innovation listed as a core value. The real question is how much innovation is found when you go out and look for it inside the organization?

The burning question for leaders is "how do we get more innovation in our corporate water system?" The trouble is that they don't necessarily see themselves as part of the problem. Typically they look for a 'fix' and send a handful of employees off to 'innovation school.' That in itself is not a bad thing, but the effect in terms of game changing enterprise-wide innovation is likely to be limited. I witness this happening all the time with training. For example, a senior team mandates a training initiative, middle managers attend and learn innovative new skills and behaviors only to return to the same old work environment and have their actions and ideas quashed by the corporate DNA/the System/the boss.

One key reason why companies are systemically hostile to innovation is a lack of tolerance for variance. Think about it, businesses typically want predictable outcomes - on time, on budget, to a prescribed quality standard. Yet innovation demands variance/difference. One of the biggest drivers of innovation is diversity - people who think differently. If you are truly looking for the next big idea it usually starts out weird and dangerous. Nicholas Negroponte of MIT's MediaLab says "creativity comes from unlikely juxtapositions. The best way to maximize differences is to mix ages, cultures and disciplines." In an August 2002 issue of BusinessWeek, I read, "Hiring diverse, even eccentric people, mixing them up in unexpected ways, and asking them to do something can prompt surprising ideas."

Great innovation will always sprout from the radical, the fringe, and the weird. Crazy ideas colliding chaotically might allow the one great idea to emerge that changes the game or even changes the world. Executives need to spend more time on the fringe - get outside of their own corporate environments to start to appreciate the conditions that cultivate creativity. Bluepoint's Gregg Thompson describes 3 key elements corporate leaders need to focus on to develop a culture of innovation:

Creating Tension - where there is a visceral human frustration with the current way of doing things (the status quo) that drives people to seek new and better answers to real issues.

Appreciative Culture - where seeds of ideas are incubated gently and carefully in their early fragile stages. Most ideas are shot down if they don't look like a success at first sight.

Continuous Play - where creativity and lifelong learning are part of the corporate DNA. Silos, walls and barriers that hold employees and ideas hostage are dismantled and personal magic is allowed to flourish.

Innovation is ultimately a function of leadership. It is up to those of you leading in organizations to keep the innovation cauldron bubbling. You create the conditions and climates for businesses and people to grow and compete energetically. Leaders are the gardeners who fertilize the soil that enables entrepreneurial, risk taking behavior to sprout in volume. Remember the goal is not to create a neatly pruned English Rose Garden like my former boss back in London, but to grow a diverse and technicolor field of Wildflowers just as my innovation mentor Tom Peters would prescribe.


David Parks is the VP of Sales for Bluepoint Leadership Development and can be reached at (415) 383-7500 or davidparks@bluepointleadership.com

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The Innovation Paradox

By Gregg Thompson

Never have we been busier in the corporate world. The advent of computer-based productivity and communication tools has allowed us to conduct more research, share more information, and work on more projects. But have these tools really helped those of us who toil daily in corporations unleash more of our natural creative talents?

Increasingly, we at Bluepoint are being asked to help train corporate leaders to create environments that will encourage people to work at their creative best. By calling upon their leaders to create workplaces that foster creativity, our corporations are recognizing that without innovation they will not thrive and may not survive in this fast changing, highly competitive world.

So what's the problem? Why is the spectacular array of electronic tools at our fingertips not enough? In his wonderful book, The Heart Aroused, David Whyte captures the organizational dilemma when he says "Work, paradoxically, does not ask enough of us, yet exhausts the narrow parts of us we do bring to its door." These are haunting words for those of us who lead organizations. Are we really driving our people to exhaustion while tapping into very few of their most valuable gifts and talents? We must resist the urge to simply blame modern corporations as simply creativity-stifling entities incapable of allowing natural human creativity to blossom.

"The corporation is at once the larger body that allows the individual to achieve things that are beyond his powers alone and the parent who tells the child exactly how things are going to be. The corporation both dispenses power to individuals and renders that same individual powerless," Whyte reminds us.

But some leaders do create workplaces where people come with all of their creative gifts in hand, where people are on fire with new ideas and are immersed in a culture of creativity. We have all seen or lived such examples. Many of us are now or have been part of teams or organizations where this culture of innovation exists. The question is - How do leaders create this environment? How do leaders lead innovation? I would like to invite our readers to share their experiences and opinions. Think back on a time when you were at your creative best within an organization. What did the leader do to foster this? What was so special about this organization? We believe that much of our best development as leaders comes from learning from our own experiences and those of others. Send in your stories and comments to the email address below and we will publish the best in the next edition of The Point.

Gregg Thompson is the President of Bluepoint Leadership Development and can be reached at (513) 289-0141 or greggthompson@bluepointleadership.com

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Target Trumps with Design
By David Parks

As I opened the Sunday edition of my local San Francisco Chronicle, the usual wad of inserts tumbled en mass to the floor. One shouted out. It was the distinctive red and white branding of Target. The insert lauded praise to great design saying "Great design is something that makes your life better. Easier. More fun. It works well, it looks even better."

Opening the insert I proceeded to read about three designers. Two I had heard of: Isaac Mizrahi, the international fashion designer and Michael Graves, Architect / Designer now partnering with Target to design spiffy household items such as kettles, mugs, clocks, and other everyday items. The third was Deborah Adler. I had never heard of her and was amazed by her story. Adler is a 29 year-old graphic designer who took the standard issue amber-cast pharmacy pill bottle and gave it a total and radical overhaul.

Most innovations start with a stimulus. In this case it was when her grandmother fell ill after accidentally taking her husband's antibiotic rather than her own. Adler decided to take matters into her own hands. Her solution? An innovative new pharmacy bottle for Target with a label that makes information about your medicine easier to read and understand. The Target ClearRX prescription-packaging system debuted in Target pharmacies on May 1, 2005.

Color-coded rings easily identify the medicine of everybody in your family and a new bottle shape puts all the vital information right in the palm of your hand. If you are like me, you are probably saying "why didn't I think of that?"


Below: Deborah Adler poses with her ClearRX prescription pill bottles.

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Book Review: A Whole New Mind: Moving from the Information Age to the Conceptual Age
By Ron Crossland

A Whole New Mind: Moving from the Information Age to the Conceptual Age
By Daniel H. Pink

Pink, a contributing editor at Wired magazine, and author of Free Agent Nation, just had his newest ideas released this past March. The fundamental thesis of the book is that we are leaving the age where logical processes alone (left-brain thinking) are sufficient for career or work. We live in an age of creativity, innovation, and more right-brain activities. However, as Pink highlights but doesn't quite detail, what's most needed is more whole brain thinking. For some this is familiar territory, for others it may be territory you have heard about, but really haven't investigated in full. Let me help you figure out which type of reader you are.

For those of you in the "don't know much about the issues of the creative, conceptual age group" or those of you who have little time to read anything or only occasionally dip into business periodicals, you will find this an informative, easy to read, and well constructed book. Pink covers the neurology of Left-brain/right-brain 101 well enough. The best feature of the book - tips on how to get better at conceptual stuff - will likely have good value for you.

For those of you interested in modern neurology in its fullest sense, you need to look elsewhere. Pink's treatment is limited and while his ideas of what we need to do are well conceived, his understanding of underlying whole brain functioning is sophomoric. For those of you who have read quite a bit on modern brain science or would rather not worry about the brain, but are interested in how to use imagination and innovation, then I recommend better treatments from authors such as Tom Peters, Clayton Christensen, C.K. Prahalad, Andrew Hargadon, Tom Kelly, Doug Hall, Seth Godin, and Chan Kim and Renee Mauborgne.

What I most liked was Pink's statement that the conceptual age requires whole brain thinking. While his book is organized around the distinctions of L-Brain and R-Brain modes of ability, readers shouldn't lose sight that it's both parts cooperating that's what is most needed. Pink's Six Senses - Design, Story, Symphony, Empathy, Play, and Meaning - are the attributes that he posits are now important and will increase in importance over time. He does bring some fresh ideas to a familiar topic. Each of the six senses is defined and then Pink offers some interesting ideas about how to develop the sense. Some of his personal anecdotes stimulated my thinking about how to increase my "six senses."

Fundamentally though, his message, while simple and basic, embraces the entire theme of this newsletter edition. Leading innovation requires individuals who can use whole brain processes and are serious about developing their own and their constituents' six senses.

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Innovation: A Leadership Issue
The World of Innovation
A Tale of Two Bosses
The Innovation Paradox
Target Trumps with Design
Book Review: A Whole New Mind: Moving from the Information Age to the Conceptual Age
Leader as Coach
Great Expectations: High Performance Coaching in the Workplace

Monday, June 20, 2005 in Vancouver, Canada.
For more information please contact Susanne Biro Telephone: (604) 983-2923

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