We need the engagement platform for translating big data learning

Knowledge BuildingBig Data is knocking very loudly on our door, how are you going to let it in and manage it?

How can we liberate that creative energy we have within our organizations, how can we achieve higher engagement?

How can we learn, share and transform the knowledge that is all around us, simply flooding in? How can we translate the data flowing in with the knowledge insights and innovation outcomes expected? How are we going to unleash the creativity that goes with new knowledge?

We need to actively encourage connected minds for value creating opportunities and knowledge sharing for innovation to flow right across all the organization. All the raw data needs connected and engaged minds.

“For this we need to think about installing a modern engagement platforms that has knowledge and learning as its beating heart”

Why do we need to build this modern engagement platform? Big Data is knocking on your door.

We need increased capacity to ‘listen and capture’ understanding. We need to deploy some filtering and analytics as ‘big data’ becomes increasingly part of our organizations lives. We need to go beyond analytics.

“We urgently need a system of absorbing and translating data’s raw power to turn these into measurable innovation outcomes”.

We need a structured system where we manage any absorption of data through its different stages of translation into valuable knowledge, to see its potential and then to realize the (new) value out of it for new innovation outcomes.

With all this new data flowing in, you need to turn it into valuable knowledge by capturing all the interactions, offer search and discovery services, organize different event and scenario management and be able to retrace the interaction history. We need to think beyond just data discovery.

“We need to equally build a knowledge sharing system and this will require as much a robust technology solution as at the raw data front end structured on a scalable learning approach”.

We need to find ways to merge data and information to turn this into ‘actionable’ knowledge and eventual valuable new innovation. We do need to think harder about building beyond analytics into these engagement platforms. It is here you actually mine the raw knowledge and transform it. We need to absorb in our organizations capabilities or we will simply overload them with just data.

We need to shift from scalable efficiency to scalable learning.

Firstly and most important for me, is our need to understand the building of learning and experiences through the Absorptive Capacity framework as I think it will have an increasingly valuable part to play in managing data, information and knowledge going forward.

A fair time back two researcher, Cohen and Levinthal (1990) pioneered the concept of absorptive capacity, further defined as the ability of an organization to identify, value, assimilate, and apply new knowledge. Since their 1990 publication, the concept has been further developed and given rise to many thousands of published papers around this subject.

The Absorptive Capacity Components

The Absorptive Capacity Components

The value of absorptive capacity is that when organizations have some prior knowledge and awareness they are more receptive to adding new understandings and new ideas. They can build better value from not just the knowledge but the structured application of it.

“As ‘big data’ grows we need to move from potential to realized outcomes”

Organizations that encourage and set about learning consciously and consistently will set about the search for new idea coming from all the incoming sources by having this already established learning structure in place. They are far more likely to better recognize new ideas that might lead to innovation.

Exploiting our learning requires framing

I would suggesat those organizations that exploit the Adaptive Capacity framework are more likely to develop deeper understanding of integrating, exploiting and experimenting with any new knowledge. Then they are in that ‘better’ shape to set about placing the data and knowledge gained into a new setting, framing new concepts or hypothesis, to push this knowledge forward into new innovation.

“We need a structure were we are constantly, consciously advancing learning, extracting its value, turning this into valuable new potential and successful innovation outcomes.”

Adoption Capacity 1
This gaining of continuous knowledge encourages constant learning and this has a positive feedback cycle as it builds the capacities and capabilities for future innovation activity for the increased potential for new value.

Absorptive capacity, once recognized and established as a system, promotes the search for new knowledge that greatly increases the capacity to make the necessary new connections for new innovation to happen.

The ability within our knowledge gathering needs a continuous focus and methodology of approach.

For this to happen, it does need continuous focus, we need to build greater absorption capacity. If organizations take the alternative route of wanting to squeeze every last drop out of the existing innovation activity or research department, organizations over time develop as bad learners, they begin to ignore, to assume they have the knowledge and get fixed in their mind sets. They totally rely on data and don’t apply their knowledge and they fail to translate this into meaningful outcomes.

Those that fail to seek out and absorb, will certainly tend to reject faster and increasingly adopt the “not invented here” syndrome. That can only last for a limited time before ‘innovation decay’ and ‘data overload’ does sets in, people become frustrated and finally give up and leave, and when they do just remember all their knowledge goes with them also.

“There is a real risk that all the incoming data can be totally overwhelming, we need to structure a learning system to absorb, exploit and translate for measurable innovation outcomes”

Managing new innovation outcomes we need to apply absorptive capacity as a learning framework

We certainly understand that today innovation is not confined within the walls of one particular company. The world ‘absorbs’ more innovation than we can turn into greater value but we need to attempt to capture this and see if and where its value might lie.

If we agree that most innovations happen outside often self-imposed boundaries then we have to extend outside all our existing boundaries and go beyond. We have to open up our organizations and collective minds to draw in the knowledge in so as to allow it to reside, circulate and be translated into new forms of understanding.

Absorptive capacities give us the system on which we can encourage the gathering, understanding and translation of knowledge. It underpins engagement and also helps manage the ‘raw knowledge data’ that needs transforming. We all need to be able to have ‘syncing’ capabilities of learning.

We need a system to capture and allow knowledge to flow, and a strong absorptive capacity has three main outputs which result from the flow of external or distributed knowledge that is allowed to flow internally.

“With the creation of new knowledge and insights, these can create new innovation that then leads to new economic and social value”

Achieving a clear engagement platform for all to gain from

So in our need to achieve a greater engagement from everyone within our organizations we need to recognize the importance of having a ‘modern’ engagement platform available, a central place for scalable learning to take place so we can structure the new knowledge and insights coming into the organization.

As we increasingly need to engage, where outside knowledge combines with our internal understanding and needs, then we do need to think about scalable learning to anchor and then diffuse new knowledge into potentially more valuable innovation outcomes that are measurable and linked back through the learning cycle.

 

Is all investment about the future?

Buy back questionI was reading an article by Doug Collins on the “three wishes for the innovation practitioner for 2015” where he points out “2014 was the year for share buybacks and dividends“.

An article from Bloomberg reports that companies in the Standard & Poor’s 500 Index are “poised to spend $914 billion on share buybacks and dividends this year, or about 95 percent of earnings.”

95% of earnings – Doug rightly says “wow” and offers a thoughtful set of observations

“Every organization that enjoys free cash flow makes a decision on where to allocate that resource. If the opportunity available to the organization meets or exceeds the hurdle rate—the desired, expected rate of return—then, in theory, they invest in that opportunity. If not, then no: the organization returns the cash to the investors. Of course, earnings come after investments the organization makes in innovation—research & development expenses, for example. Many do invest a lot in R&D”

He then remarks “And yet…..and yet” ….

“This offers the implicit message from the firm to the investment community: “we do not have a better use for this cash (i.e., the ideas we might pursue do not seem as promising and as compelling as we would like).”

“We know that we cannot cut, or cost save, our way to growth. By extension, we know that we cannot grow a business for the long-term by returning all profits to the investors. Doing so suggests a lack of vision—a lack of acuity into what the customer wants and what the market demands”.

Then you begin to read through the Bloomberg article

“Companies in the Standard & Poor’s 500 Index really love their shareholders. Maybe too much!  Money returned to stock owners exceeded profits in the first quarter and may again in the third”

The Bloomberg article goes on “Buybacks have helped fuel one of the strongest rallies of the past 50 years as stocks with the most repurchases gained more than 300 percent since March 2009. Now, with returns slowing, investors say executives risk snuffing out the bull market unless they start ploughing money into their businesses”

Some further quotes from the Bloomberg article

“You can only go so far with financial engineering before you actually have to have a business with real growth,”

Buybacks are something corporations can take control of and at low borrowing costs, they’re a viable option,”

If management can’t unearth future opportunities for growth, as a shareholder, I lose confidence.”

Buybacks have become sort of the low-risk medicine in the C suite,”.

The reality is capital expenditure comes with risk, significant amount of risk, especially in a slow-growth world. Buybacks offer a lot of flexibility.

So you do have to ask the really hard question: where is the future REAL growth going to come from?

So why are our companies not ploughing additional money back into their business, partly it serves the interest of top management who are often compensated on EPS. Business today remain utterly reluctant to buy new equipment, build factories or hire more workers, while management regards the recovery as uneven, it has regarded the buyback strategy as the best bet. How totally wrong!

Clearly the view that your own stock is under-priced, you believe your strategy is the right one and you are certainly not going to sit on hordes of cash, it is perhaps value-destroying to “our” shareholders. Yeah right including mine!

This is where the whole compensation of management has gone off the rails. If tenure at the top is shortening- as it is- then pushing your stock price performance helps for a two to three-year period helps you as the manager. Yet it really is simply “kicking the future down the road” for others to deal with, if it is not too late. It is very unlikely these buybacks will help performance of the company over a decade but then again most management has ‘cashed in their chips’ by then.

Simply too much cash and buy-backs are stopping innovation and new growth

Now of course if this ‘bull market’ does come to the end of its run this year as many are predicting then the ‘game’ of improving financial ratio’s gets so much harder. Buybacks do reduce the assets on the balance sheet (cash is an asset), the return on assets (ROA) increases and if the shares bought back are ‘retired’ the return on equity (ROE) equally goes up.

Today our markets and the investors view higher ROA and ROE as the greater positive over the need to invest in the promise of a better future. Yet change is stirring, new business models are revolutionizing industries, crazy ideas will be creating new markets and this call of the unknown holds an interesting promise of future ‘higher’ returns. The Darwinian effect is raising its head and innovation holds one big key to evolving differently to manage in these changing times.

Are these prop-up ratio’s providing short-term relief, holding strategies to what would otherwise be an ailing stock from poor investment in innovation or new assets or helps them get out of excessive dilution. These signal a company struggling.

The reluctance to raise capital investment has left companies with the oldest plants and equipment in almost 60 years. The average age of fixed assets reached 22 years in 2013, the highest level since 1956, according to annual data compiled by the Commerce Department.

Do you recall the Capitalists Dilemma?

I am sure many of you can recall the article in the HBR “The Capitalist’s Dilemma” by Clayton M. Christensen and Derek van Bever from the June 2014 Issue. This is where they outline the three types of innovation 1) Performance-improving innovations replace old products with new and better models 2) Efficiency innovations help companies make and sell mature, established products or services to the same customers at lower prices and 3) Market-creating innovations, our third category; transforming more complicated or costly products so radically that they create a new class of consumers, or a new market.

We are today often failing to create the market-creating innovations. Market-creating innovations need capital to grow—sometimes a lot of capital and risk and this is deemed unhealthy in today’s more uncertain environment but you are ‘creating’ lots of cash by running lean. Buy backs are safer, the risks lower and top management’s projects their confidence that this is better for shareholder wealth. Shareholders take the money but over time I would certainly argue lose confidence in a lasting future and constantly switch shares to chase the cash! So shares get propped up even more and the circle starts again and the future gets sacrificed just that little bit more.

The Capital Dilemma article was suggesting the need for a New Orthodoxy of New Finance.

It does recommend the emancipating of management. “Many managers yearn to focus on the long-term but don’t think it’s an option. Because investors’ median holding period for shares is now about 10 months, executives feel pressure to maximize short-term returns. Many worry that if they don’t meet the numbers, they will be replaced by someone who will. The job of a manager is thus reduced to sourcing, assembling, and shipping the numbers that deliver short-term gains”

Re-evaluating differently

While we value innovation alongside non-innovation in the same way the demands for returns on investment place unfair demands on internal innovation projects. Investing in the future is so much harder and while there is this lack of confidence in new innovation, alongside this lack of external pressure for different judgements, we are looked into that diminishing short-term viewpoint dominating our boardrooms.

Hopefully if this present bull market does end, innovation, the sources for new growth, alongside greater mergers and acquisitions (M&A) suddenly gets its ‘growing’ voice back in the boardrooms. Suddenly corporate behaviour moves from financial prudence and cash becomes released for accelerating real expansion.

We have lacked the right type of investment in the future

I just wonder if those at the top really understand that it is not just cash that will ‘create’ innovation when they require it, when they have  that sudden need to chase for real growth if the stock markets turn mean? This acceleration comes from driving new innovation. If they have not been sustaining investments in their resources; their assets and their people and we know these have been far more diluted through this pursuit of lean management, dispersing most of the gains with the cash piles achieved, then the company is in real trouble.

They might soon realize that real innovation and the skills needed has been running on ‘empty’ or just the past fumes of low-octane incremental fuel, with little sustaining power, apart from this propping up the short-term. This sudden realization might create a sheer sense of scrabbling. A scrabble just to regain those forgotten skills and bring real lasting health back into our companies where people are valued again for what they can bring.

It would be nice to see a pursuit of growth back on the agenda, through pushing all the buttons needed surrounding innovation, and to see top management really earning their place, unearthing future opportunities for real growth, something shareholders will be increasingly looking to see.

Risk Opportunity

Risk and opportunity are the ‘yin and yang’ for innovation and when you are looking to really grow to give really valuable shareholder return then top management is going to have to re-learn much.

“Recognizing the power of ‘yin and yang for innovation’ can give you the order of things and how and why they relate to each other. Complementary and conflicting opposites do contribute to a greater innovation understanding but they do need consistent attention to manage”

It is critically important to have this ‘flow and balance’ and allow it to constantly evolve. Lets get back to investments that are about the future and that needs a healthier appetite for innovation investments.

Where are the new feeding grounds of innovation?

Credit Wildebeest migration, Kenya, by Bonnie Cheung

Wildebeest migration, Kenya by Bonnie Cheung

I am presently reading an early release draft of a book written by Mike Docherty of Venture2, on innovation, and I would certainly recommend the read when it comes out. The book Collective Disruption will be available as of February 2015.

The book as Mike wrote to me, is aimed at corporate leaders, both in large and small companies, charged with new sources of transformative growth and makes the case for co-creating new businesses with entrepreneurial partners. It builds on a foundation of open innovation, but is focused specifically on new business creation (vs core business support).

I know that Mike is passionate about the intersection of corporate innovation and entrepreneurship for co-creating new businesses and business models. As CEO of Venture2, a consulting and new ventures firm, he works with leading brand companies and start-ups to commercialize breakthrough new products and businesses.

Mike has experienced disruption many times.

This crisis is personal one to Mike, as he has seen and been involved in numerous points of innovation disruption. As he states in his book: “I have been on both sides of the conference table as it (disruption) has unfolded. In my work inside and outside of big brands, I have come to know, respect, and work alongside the managers who have to make innovation work for both the company and the customer. Theirs is a serious challenge. I know because it has been and continues to be, mine as well”.

Mike was part of the turnaround team at Sunbeam Corporation some years back, who combined became really creative thinkers and they become well respected in pioneering many of the aspects of open innovation. They achieved an impressive delivery of 150 product launches in the second year by leveraging partnerships and the internal creative forces, going from the previous 10 new products in the first year. This experience took Mike into a new direction and helped form his business evolution in his work with his venture business and boutique consulting practice, Venture2.

In his book he clearly stated open innovation is not enough.

The core of his book is firstly arguing the old definitions of innovation are dead (this I totally agree with) and as he states new ideas are coming from everywhere, emerging competitors are disrupting established companies every day. Companies need to increasingly focus on new business creation for step-change growth.

Yet as he states, and I totally agree, this is a scary place to go for big companies, as this is transformative innovation and most are simply are not good at undertaking this. His book sets out to address that ‘soft spot’ in the big- company skill set. It is all about understanding, learning ad playing the collaborative disruption game. This he believes comes through a collective disruption model where you engage more with the entrepreneurial ecosystem to create market-disrupting businesses. That means collaborating earlier and more deeply with partners and that’s the roadmap he’s trying to share with this book.

Mike lays out some practical approaches in each phase of corporate/start-up co-creation: discovery, definition, incubation and integration. And he supports his case with interviews and examples from some leading exponents of innovation He offers a book for the insider of big organizations but also for the partners found outside, as well as for the many entrepreneurs that will find they are dealing with big organizations. They need faster-scale up and preparation for a successful exit, early engagement of the bigger company into the new value proposition, either threatening them or enabling them to enter into a new area of their innovation.

So this is a book that goes beyond transactional approaches and focuses on the need for relationship-based networks and a solid understanding of the innovating ecosystem, one of collective disruption for future growth.

So we are at the end of the old era of innovation?

That era that did have self-imposed walls and traditional (old-fashioned) design. Today we need to build our ecosystems, seeking out partners and entrepreneurs alike. This does call for being far more disruptive, as Mike suggests in his book “Collective Disruption,” we need the new order, where you can navigate, always with some risk, into new growth opportunities by constantly learning and collaborating with others.

I would argue once you become familiar with managing in disruptive times, in working with partners all dependent on each other, in mutual and ever-increasingly ecosystems, you learn to look well beyond your old self-imposed borders.  You will suddenly see this new innovation expanse where you can begin to roam to explore increased innovation opportunities. You recognize that migration of constantly moving and change that becomes essential, a necessity that gives you a greater chance to not just survive but feed off of those new innovation opportunities.

A place Mike suggests: “where you’re living the unique challenge of creating transformational and step-change growth”.

Finding that set of collaborating capabilities and competencies that can be successfully unleashed as our new innovation activities, ones that can be radically different- they create real growth. One’s where agility, lean and risk-taking become more of the norm, they are dynamic, ever evolving and changing, and so those innovation activities are richer in eventual outcomes.

A place to keep you healthy and sustaining and growing by traversing constantly across a very different, ever changing (and challenging) landscape, than the one you left behind that also needs renewal.

For some reason reading this book triggered thoughts of the mass migration of Wildebeests in East Africa

As I was reading through the opening chapters, for some reason, it triggered a thought of the mass migration of the Wildebeest in East Africa. The old-established practices on innovation are exhausted; we do need to change our approaches and mind-sets to find those new ‘feeding grounds’ of innovation.

Why this book triggered this is that disruption is becoming part of our business life, or it should be. To stay alive today or to remain healthy, you have to leverage and extract from the whole innovation eco-system to create the different conditions; equally you need to take increasing risks to transform and improve your chances of survival.

Watching the frantic herds of the wildebeest migration crossing the Mara River can be very spectacular; there are often scenes of great panic and confusion as the massive predator crocodiles in the river wait to pounce. Utter disruption yet necessary to survive and prosper for all involved. For business, are these predators the consultants advising a business with often conflicting messages adding even more panic, or the entrepreneurs, who seize the ‘feeding opportunity’ to fatten up by creating the frenzy that goes with this crossing point?

When you make a significant move away from your established ‘feeding grounds’ you suddenly have such an expanse of new opportunity but it is not without risk, the risk of crossing over, recognizing the other side is essential to be the place for new,real growth.

I could not get this thinking out of my head of migrations as I continued into the book. Strange isn’t it on what sometimes does get triggered as connections as you read a book?

Are we about to witness this mass movement to find new innovation opportunities?

Mike’s book Collective Disruption certainly nudges us along, it does lay out a case for change, a contributing part of the processes and understandings that needs to ‘stir the forces’ we do need to bring about for real innovation change. Mike, in his book, partly catches that sense of the wind of change, that is blowing and needed for innovation. Mike offers some highly practical solutions and thinking, based on his depth of knowledge and experiences within his work of approaching your need to change, with an imaginative framework to help you navigate the terrain, so as to make the necessary transition for yourself and your organization.

Innovation, certainly is for me, in real need of changing; the global forces and those competing are making the mass within our companies restless for change. We are on the road to migration; finding new solutions built far more based on collective and disruptive approaches, that will offer far better innovation outcomes for sustaining our futures and opportunities for achieving better levels of growth we need.

My innovation wish for 2015

2015 Innovation WishI would like to see emerge a different ‘sustaining’ capacity built around innovation as the continuous core, constantly evolving, adapting, learning and adjusting, in perpetual innovation motion.

A truly integrated innovation solution that sits in our organization to allow innovation to be fully leveraged and exploited.

We need to recognize innovation has many touch points, a myriad of dimensions that need to be aligned and integrated. I genuinely believe we need a solution provider, who takes a more holistic view of innovation management that can make a significant advancement on where we are today, in our processes and systems.

These need a total integrated solution as the approach. this has its complexities in the challenges but we do have the potential through technology deliveries, platform constructs, using the flexibility and adaptability found in the cloud and if we combine this with our innovation management understanding, then we can to begin to construct this systematically and thoughtfully. It is very achievable and necessary for our organizations abilities to absorb and translate knowledge into innovating growth, something missing for many.

Innovation is certainly one of those in need of a real concerted effort to bring our approach to the management of innovation up to date within our enterprises, to make it more inclusive and that can I believe come far quicker through delivering it across the organization and all their partners by operating within the cloud.

An Enterprise Innovation Process (EIP) that is highly visible, agile and core to the organizations future, seen by all, used by all and truly valued by all, as integrated and highly valuable to engage with.

The formal management of innovation is not resolved today, it is a collection of pieces.

To quote these statistics from an Innovation Leadership Study in March 2012 for example:

• *Only 30% of respondents agree they have an effective organization structure for innovation.
• *45% do not have a well‐defined governance structure for innovation.
• *40% lack clear roles and responsibilities for innovation.
• *39% state they do not have an effective decision‐making process for innovation.
• * 54% of those surveyed indicate they do not have a formal KPI system for promoting innovation.
• *49% are not having a well‐defined process to prioritize and allocate time and funding to innovation projects.

If innovation management can be integrated into the organizations systems, I would suggest many of the current problems and frustrations we face today, in our innovating efforts, in barriers and issues surrounding innovation, might begin to melt away or change the existing unsatisfactory result game of today.

We need to strive towards making a more radical attempt at integrating innovation into our systems and structures. It is needed, as we need to all engage through innovation far more, to tackle growing issues and problems that are complex challenges that really need integrative thinking and connected processes.

Making the business case

Innovation management today is often standing outside any integration structure.  Some people, I am sure, would argue that it should do, yet I do often see and certainly feel innovation is often missing the critical top management line of sight and suffers accordingly. Often this is in numerous resource constraints that ate becoming a real performance drag against expectations. To resolve this and many other issues innovation needs to be more central in core process thinking and managing throughout the entire organization.

• Often Innovation runs counter to repeatable processes; it needs to leverage this ambidexterity of having access to all that makes it adaptable‐ nimble, agile, constant change, and experimentation, prototyping tailored to explore incremental innovation in faster, more flexible ways.

• Alongside this to allow for more radical innovation that taps into greater needs for mobility, usability, elasticity and yet still be aligned to leverage, exploit and maximise opportunities needs to run in parallel.

We need not just a new innovation management system; we need to build this on a modern engagement platform. As constant change happens we will need to accommodate new technologies and its realization of enterprise value will need an even greater evolution than ERP, the present backbone of organizations. We need a new outward focused orientated system that can be delivered through this suggested Enterprise Innovation Planning (EIP) system.

As outlined earlier here, to achieve this I think we must go cloud‐based, agile, and moving towards having a more ambidextrous organization design for innovation. This will help innovation to break out of the existing constraints and linear approach we have given it as its present straight jacket.

Integrating the innovation process and system is needed more today than ever.

We are in a really evolutionary period, with the explosion of change taking place in the post‐digital world of cloud, big data, social and interconnected devices. External insights and Intelligence will not become Enterprise knowledge that flows without real, deep integration.

Receiving the knowledge alone will not turn these into ‘higher scales, richer, more innovation business outcomes’ that have real growth value, unless we realize the massive ‘mismatch’ between digital flowing in and the physical attempting to cope with this.

The discovery of insights from all this embedded intelligence, social activity and data analytics is leading us to potentially manage a significant wave of new innovation opportunities from this growing digital knowledge and activity.

Insights and ideas will form a real log jam attempting to enter the innovation pipeline

As it stands I can see a potentially a damaging build‐up, or a log jam of promising concepts all desperately trying to work themselves through the innovation funnel. Either decisions or the existing disciplines have to be radically altered, where we take on a much higher risk profile to enable these to move from idea to finished product or new service, or we accept the consequences of different failures, growing frustrations or variable revenue metrics against the cost invested.

The innovation pipeline today is very manual; it will always need human intervention, in decisions, in inputs, in what is communicated, what is approved or dropped. Yet innovation often gets far too weighed down by the wrong type of human intervention.

What changes are needed, who will be willing to invest in this radical redesign of the innovation system?

It is through searching for and seeking engagement in the ‘wider’ world we will begin to make greater connects and receive potentially enormous amounts of (raw) data, about interactions, performance, possible issues and connecting those previously fragmented and dispersed information, through analytics so it can be turned this into emerging valuable knowledge.

Innovation needs a radical redesign and update to accommodate the changes occurring in the present digital evolution of mobility, social and big data.

• We will need to transform much within our systems but more importantly to orientate our skills to receive, translate and diffuse new knowledge, in significantly different ways.

• It is through this combination of people and ‘things’ connecting into our businesses that we will be able to extract new observations, to give us insights that can lead to completely different innovation opportunities.

• Market trends are changing faster and becoming shorter, so opportunity windows are narrowing. Risks of missing out are constantly increasing for those who are not focusing intently on that critical ‘time to market’ and not constantly streaming their innovation system, looking to automate it where ever they can.

Today we are still too reliant on manual systems for much within our innovation work.

What is needed is to push the thinking on how to automate the innovation process even more.

We need to think our innovation system designs a whole lot deeper to allow these new digital technologies and the insights to be worked through the innovation process. Speed is becoming ever more important, for new solutions to be turned out the other end as new innovation.

We need to design a complete innovation system otherwise we will be investing in a front loaded area alone, limiting digital impact and that will not deliver the power of actual growth expected or needed from our innovation activities so as to deliver new valuable outcomes. Approaching the innovation process holistically would certainly help instead of bolting further onto our present ways as our innovation challenges become even more complex.

Offering an Enterprise integrated solution would really offer innovation and its management a real opportunity to become fully embedded within our organizations.

Innovation gains real line of sight and across organizational engagement to move closer to its promise of delivering sustaining growth, new business and impact.

So it would be a real achievement if we saw real hard physical evidence that innovation was moving towards this integrated system in 2015, so our Enterprises can leverage all the knowledge and insights that can be harnessed into new innovation growth.

Dealing with Your Darwin Effect through Innovation

IFD 4

I have been working away, as my labour of love, frustration and sheer determination, on my thinking through the ‘harnessing’ of the dynamics within innovation, to offer organizations their innovation fitness and future landscape design, so as to radically alter their present capabilities and capacity to innovate.

The aim is to relate these to where your organization is in their existing capabilities, where they need to go, in identifying and clarifying the necessary capabilities they need to have, so as to achieve certain strategic goals and then, “we”, together, collectively prioritize the critical ones as ‘must have’ and then set about filling the gaps. This is the innovation fitness journey needed to be travelled.

The building of those more ‘dynamic’ capabilities and competencies are the ones you need so as to provide for a more dynamic innovation environment and deliver unique capacity for your ongoing strategic goals.

This work is covered off partly on this web site but does have its own dedicated site where the articles, post and thinking have been building up over a fairly lengthy period. Go and visit it at www.innovationfitnessdynamics.com.

So let me tell you what this is all about and I will describe this with heavy referencing from Geoffrey Moore’s book “Dealing with Darwin”. Without doubt one of my favourite books in how it helped me piece together a large part of my dynamic innovation fitness puzzle.

First you have the internal view.

Critically, you need to take a fresh look at your internal dynamics, at what happens when core competencies cease to differentiate, how resources must be shifted to new areas, how deeply threatening such changes can be, how a protective inertia emerges as the enemy of destabilizing innovation, and finally, what kinds of management responses can best deal with inertia and redirect its energy towards fresh innovation. This is the inward facing dilemma that needs to be addressed.

Then you have the External viewpoint

It is about creating competitive advantage in an increasingly commoditizing world. To lead that effort, you must continually reappraise what role your company is playing in the market ecosystem, how the market landscape of competition is changing and understand where your competitive advantage has come from in the past and where it is likely to come from in the future and with what kinds of differentiation will be most rewarded, and what kinds of innovation are most required. This is the outward facing portion of the story.

Then you have that growing sense of observations

Innovation and inertia: we often get stuck in particular types of innovation, promote given skills to the detriment of others, equally necessary but ignored or not understood fully.
We fail to adapt to market changes, we fund to much of one type of innovation to the exclusion of others and in the process create internal traffic jams of sorts, frustrations and tempers to match.

We squander our scarce resources of time, talent and management attention on initiatives that fail to give us competitive advantage and get constantly impeded by these forces of inertia all around us. Indeed, the more successful we have been in the past, the stronger the resistance to any subsequent change in the innovation course.

Then you have those real world worries

So what does keep management up at night about their performance on innovation? The rising anxieties stem from that worry that perhaps we are losing our ability to innovate, can our people still compete? Do we really get it? And even if we do, can we still get it to the market place at the right time and feed that need? Can we actually see the light of day?

Then Evolutions can happen

Evolution proceeds more gradually but in times of crisis we are forced to make choices that enable you to step back and reflect. I would argue we are all increasingly facing our own types of crisis in today’s volatile world.

If you were able to achieve an understanding that is based on more informed choice, so you can extract yourself from one path that makes you increasingly vulnerable and provides support to commit to a new core focus, one that offers you a more sustaining competitive position on which to compete through innovation. Would you take this different pathway?

Your task, challenges and keys to unlock your dilemma lie here.

1. The task is to develop a suite of core innovation competencies with proven capability to create (unique) competitive advantage.
2. The challenge for management teams is to choose the type of innovation appropriate to their situation and to exploit it deeply enough to create definitive separation from their direct competitors. This can be completed in different ways but through a thorough analysis is recommended
3. The key is to identify and then to extract (scarce) resource from (existing) context and re-channel this into the new core that will differentiate you through the new emerging innovation competencies and systemic approach.
4. A real need is to reposition resources and provide focus on the ‘right’ capabilities to meet new challenges knowing your “Innovation Fitness & the Dynamics in the Landscape”

The sooner you start, the sooner you will be able to extract yourself from the commitments that make you vulnerable and establish those commitments that will strengthen your new position“- Geoffrey A. Moore

Survival of the fittest dominates irrespective.

  • We are all caught in this Darwinian race- all of us it seems.
  • So where do you want to focus your limited resources? The ‘natural selection’ choice to increase your abilities to innovate linked to your needs.
  • Start by mapping out your innovation direction to the tasks and capabilities on hand and those needed or required to get you to certain predefined goals.
  • Chose the path that will leverage and expand your knowledge, capabilities and capacities and start the journey.
  • Start recognizing the opportunity spaces and gaps when you think you should be heading but feel you might have constraints in moving towards.
  • The greater you can identify the need for improving your ‘innovation fitness’ allows you to get closer to accelerating towards the seen and yet unseen opportunities.
  • The greater ‘innovation fitness’ equates to more value creation potential.
  • As you learn to recognize the difference between managing the existing routines and building the new capabilities, the quicker you can absorb these new learnings within the organization, so they can become the new dynamic routines that are needed.
  • You then begin to reduce uncertainties and strengthen the true innovation capabilities you need to thrive and survive in this Darwinian world.

Interested to learn more?

Then simply contact me. I am happy to discuss this and how this can be applied to your organization and what it means in engagement and commitments.

You build progressively the Innovation capabilities and competencies levels to become dynamic and fitter to compete and succeed.

Achieving a higher collaborative gear

Collaborative GearsFor a big majority of us, open innovation is now well established, it is part of our innovation furniture. The quest for many, today, is the search for richer engagements, possibilities and exchanges. We need to move beyond the existing boundaries and go deeper into the collaborative space.

I regard collaboration as the active ingredient, the yeast that allows our ‘daily innovation bread’ to rise. Getting all the parties ‘gathered around’ puts increased vitality, energy and commitment into working together over a project or idea.

As we learn to reach out and collaborate, exchanging perspectives and our different thoughts, it is in these interactions, in the many exchanges on-line and off-line that we move towards a real sense of achievement.

Allowing outside ideas through our doors

Open innovation has literally thrown open the doors, many of our research and development activities are increasingly relying on the input from outside. Open innovation is changing our behaviours.

Yet it can be tough to shift our ingrained habits and patterns of behaviour to accommodate differences of opinion, acceptance that many of the answers lie outside of our building and domain of expertise. The more we look outside for answers the more we are getting closer to the truth, as the truth lies out in the market place.

We need to seek those “moments of truth” and be true to ourselves, in having open, honest dialogues; these strengthen sharing, confidence and trust – all essential to collaborations.

There are certain behaviours to avoid, certain ones to embrace.

I am sure we have all looked at collaborations as more one way, our way, and not made the progress we had originally expected. True collaborating is an art, not a science. It needs constant practice, a freedom to explore and express. You need to have a clear sense of purpose, on why you are talking; otherwise you wander and never get to the point of real value.

The work is around issues / challenges / problems that have the potential for mutual gain. No one enjoys those “black holes” or “long silences” of one way dialogues, those that often feel like “I think this person is sucking out my brain” and expecting that for free.

No, for me collaborations, good collaborations, can move up a gear from those past open innovation experiences. We need to make them human dialogues that appreciate and respect the others’ opinion, otherwise why bother with open innovation, if we already know the answer, we just want you to confirm it?

Designing our collaborative platforms with some suggested principles

  • I like the principles of “demonstrating, validating, sharing and discussing” as you ‘plug’ into each other so you can achieve active dialogue on ‘given’ subjects on a solid ‘give and take’ approach.
  • Often we constrain ourselves in working out the prescribed agenda of needs before we get into any dialogue, I think this is a huge mistake. We should make conversations creative, a rich mix of development techniques that generate good interactions and create that growing bond and identification.
  • We need to allow time to let discussions and exchanges grow and flow and sometimes they can move into unusual directions that lead to even better creative exchanges for value building.
  • We need to seek a bias for action, by simply keeping on asking the basics of “for whom, why are we discussing this, how can we proceed, when and what issues stand in our way?”
  • I like the idea to start off any potential innovation conversation with a belief of its change possibilities; it opens us up to what both parties can truly get out of the collaboration.

The need is for both sides to feel they are gaining from any collaborations

  • We should always start with the belief that we need to gain mutually, and often just simply recognizing that you might ‘just’ simply gain personal knowledge and insights that could offer value somewhere ‘down the line’.
  • Each side constantly needs to track back to a sense of worth and that comes from allowing time for feedback and open thinking. Take your time to really engage in mutual conversations, they prove to be increasingly valuable over time.
  • By the use of design thinking techniques can certainly help in providing a greater dimension to provide ideas to flow, makes exchanges and creative moves towards solutions. Learn the techniques and then try it as an alternative way to work and create together.
  • We need to practice “circles of conversation” where they loop around, move around the parties and you gain increasingly from the positive reinforcing loop of different conversation strands.
  • Lastly, we all bond, sometimes not so much with the problem but far more with the person explaining the problem, so mixing up the expected problem statement with personal experience and your values makes for a far more positive atmosphere, leading to fruitful conversations you might not have initially expected.

Why is collaboration so important to our future?

As we engage, we learn.

We can’t imagine what we don’t often see; others open our minds to new possibilities. We can stay anchored in what we see and do, or if we are prepared to let go and have this ‘freedom’ to look for mutual exchange we can scale new heights. Conversations, exchanges and collaborations give us the experience to learn.

The huge value of collaborative exchanges is how it opens up our minds as we sometimes realise that we were ‘vested’ in selective thoughts that were less informed than we expected. Opinions can fall away as better ones replace them.

We need to let go, unlock the knowledge that comes from collaborations. Just remember outsiders are not insiders, they have different perspectives and do not expect to ‘shoe horn’ their opinions into the one size fits all. 

I’d argue to remain as open as possible, so as to allow yourself to simply open up in a world of mutual collaboration, it can lead to some powerful innovation ideas. Build trust, value your own instincts and permit judgement calls to be pushed off until you have allowed the other party to explain their potential contribution, and then jointly work towards the solutions.

Make your collaborative efforts move just beyond open innovation into relationships that continue the learning process for all sides. Make all your collaborating endeavours stimulating, then you move into that higher creative, co-creating gear and it is a far more rewarding place to be.

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Publishing note:  This blog post was originally written on behalf of Hype and with their permission I have republished it on my own site. I recommend you should visit the Hype blog site where they have a range of contributors writing about a wide-ranging mix of ideas and thoughts around innovation, its well worth the visit.

 

Tackling the Internal Jobs-to-be-done for Improving Innovation

internal-frustration

We are constantly nudged towards understanding the needs of customers through the jobs to be done approach. So why do we still seem to not achieve this ‘higher purpose’ of providing solutions to customers’ needs?

Predictable growth has run its course as we live in unpredictable times; we need a better way to identify ALL those unmet needs that our customers have. That need comes from knowing the “job which needs to be done”. We need to sharp shoot to hit clear targets, we need to become a lot more explicit in our knowledge of a customer’s unmet needs, and they need to make the connection of that need with our product (or service).

Mapping the hierarchy of customer needs

We need to map the jobs and generate desired outcome statements that are specific and of real interest to the customer, not our list of multiple ideas generated based on where we are or what we think we know. We need to build the hierarchy of customer needs.

By even attempting to follow a ‘needs first’ approach we are often left to figure out the unmet needs. The flaw lies in not having these fully understood. All needs can be captured but this requires combining a more rigorous, controlled approach, coupled with astute observations.

The key still requires us to accurately quantify the degree to which a proposed solution will increase customer satisfaction – and that means knowing the job’s they want to complete.

We need to segment by jobs and to do this we need to capture this in clear, precise job outcome given statements. We need to become clearer on the product, service or business model ‘job’ it is intended to perform, measured by a customer’s desired outcome.

I really believe our internal processes are letting us down.

There is real scope to do a jobs-to-be-done (JtbD) evaluation internally, let me explain. We can become so intent on finding out the customer JtbD we might be forgetting the internal ones that need addressing as well, they get ignored and continue to ‘undo’ all the hard work of customer need discovery.

We need to fix the internal need for innovation first, the job we are trying to achieve. We are failing on this considerably.

So what is the internal job to be done?

Is it to keep everyone employed in developing and launching new products, to keep our innovation structures humming along or just because it is expected from us?

Surely the job to be done might be “to reduce the product failure rate” – the end need is to get into the innovation pipeline only high-value products that are sustainable, offer clear market differentiation and have a distinct demand. Often we allow products into the development pipeline that are less than stellar.

Actually we have a wide range of reasons for ensuring failure before the product even gets launched. These are the jobs-to-be-UNDONE that need to be eliminated.

Can you spot these happening within your organization? Do you sense you have seen or been part of this set of actions that had the triggering effect of altering the product from its original discovery point.

Failure Points Activity outcome and its potential impact on failure
Inattention Someone decides to deviate from the original detailed specifications and this impacts significantly on the JtbD originally identified but accepted internally as ‘an acceptable’ risk, without any tracking back and validating this ‘internal’ change and how it compromises the original need.
Lack of Ability The skills, conditions or training to execute the JtbD that has been identified, so as to successfully translate this back into a product that delivers on this need are not available within the organization. They are not brought in to offset this lack of internal ability, it becomes ‘let’s reinvent here’ failing to understand critical experience points.
Deviance The internal process suddenly gets short-circuited to speed up the process, the missing ingredient of understanding gets overridden by this need for speed or someone up top overrides the process and the deviance has a knock on effect that (radically) alters the final product intent.
Process Inadequacy The discovery and development process are faulty, they miss critical signs or ignore them and keep pushing on to keep to the prescribed project time line for fear of being singled out. To call stop is bad and indicates weakness not strength, so the process continues regardless
Uncertainty The initial idea lacks the type of real clarity researchers require, gaps begins to be filled in by one person’s assumption, that was ‘best’ judgement and ‘reasonable’ but produces undesired results that are difficult to call a stop too. Actions adjust going forward with future consequences
Task Challenge The task becomes far too difficult to execute reliably every time and the eventual production quality becomes variable and compromised and the products lacks consistency on that final finish and fails to meet the expectancies of the customer
Process Complexity Those well laid out plans, built on a complex final production layout suddenly encounter constant and sometimes novel interactions unexpected and cost overruns, delays, final product rejections all suddenly rise with variable final product results that should have been unacceptable but forced to be acceptable, but on to the consumer.
Hypothesis Testing The hypothesis sounded great, it was heavily backed as a winner but suddenly fails, sometimes when capital commitments have been made. Instead of simply ‘pulling the plug’ it begins to have a momentum of its own, heads go down to prove the hypothesis irrespective.
Exploratory Testing Some adjustments or experimentation made it into the final product, it was meant to be a clever addition to expand knowledge and cater to the JtbD need but has undesired results unforeseen or not thought through.

 

Tackling the internal JtbD is not easy. While we deviate, while we let internal interpretations into our new product development process we are building in the chance of product failure.

Managing the internal JtbD really does need thinking about.

Knowing the need of our customers and markets is the place that will get us towards growing our business. Yet we do need to focus more often on the failures we have in the internal Job to be Done to actually improve our product success rate. Internal ego’s and the innate wish to constantly meddle along the innovation development process seem to have many jobs that need to be undone.

We need as much internal discipline to stay focused and true to a discovered customer need within our internal processes and pipeline.

How often does a product in its development get altered to accommodate internal wishes? This internally driven perspective, intent on ‘just’ getting the product out of the door, because keeping it in its original state seems simply too hard for all sorts of reasons. The emotional factors kick in and you hear “compromise and cannibalise” and a host of other fear factors to protect existing products, systems or structures that are ‘turf’ driven.

Internally we have this need to identify the true internal jobs-to-be-done and that often centers around deviations from the “customer need discovery point” and it is these which might be causing more failure than you realized, well before any product gets launched. These internal failures need to be undone.

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Publishing note:  This blog post was originally written on behalf of Hype and with their permission I have republished it on my own site. I recommend you should visit the Hype blog site where they have a range of contributors writing about a wide-ranging mix of ideas and thoughts around innovation, its well worth the visit.