Building upon four key wealth creating pillars

Wealth creation 1Most rooms we enter have four sides; they provide the structure to build upon. Presently in many of our economies, particularly in the West, we are struggling to find real growth; we are limited on our wealth-creating possibilities. Why is that? Our structures seem to be weak not strong.

We are certainly relying far too much on ‘selected’ pockets of economic activity to keep us going. Technology is clearly one of these. Yet our longer term forces for sustaining growth remain ‘fragile’, our structures remain wickedly  ‘out of kilter’ and we need to find stronger connecting frameworks that reinforce each other, so we can build further upon these to manage our business activities in new ways.

In most of our economic activities technology is playing a significant part in altering our habits, routines and thinking but it alone, is not enough. For technology to really give benefit it needs to be driven by our ability to generate wealth creating activity and that comes from integrating knowledge, gaining experience and being able to articulate this in better ways.

To achieve this, our business structures that we have in the past relied upon are in need of changing. They need different pillars to build upon.

Welcome to my four pillar room……..with a view

One such room I see has four pillars; firstly a value creation one, then one that prompts a change in our thinking around the value and creation of constantly evolving business models, a third one based on understanding our intellectual capital base, where our knowledge resides and can be harnessed, and then the final pillar of the innovation capital that can be generated from this to create wealth generating opportunities.

Why are these four pillars important as our structure within our ‘wealth-creating’ room?

Pillar one – For me we lack the ability to articulate the value creation narrative.

We need always the wealth generating perspective to get behind. We want to feel this is ‘dynamic’ and can offer all those involved that feeling of identification, so we can find individual ways to apply them, where there are the combining and transforming possibilities for us to, investigate, explore and exploit. We are searching to manifest fresh, new outcomes to create new wealth creating potential.

To have the ability to articulate the value, what potentials can make up the possibilities to develop and deliver the future promise? Developing a good value creation narrative is essential, it requires critical components and for us all to identify through a common language.

Value creation and its potential can be created through the Business Model. It is identifying the inputs from the different capitals and the ways we can transform these through business activities and interactions. Our ability to articulate where the value creation potential lies requires our ‘narrative’ to be broken down, often called the value proposition.

Pillar two – The Business model is becoming even more critical today

The whole movement towards creating the business model through a canvas approach allows us to articulate our ‘potential’ value generating story. As we learn to work with all the components that make up a business model we are responding, capturing, creating and delivering a constant flow of new value generating opportunities.

The more we can express ourselves through narratives and the emerging business model canvas we are offering disclosures, we are setting in train discussions so others can contribute and add to these emerging business model concepts.

To sketch out our business model canvas, we do need to constantly work the BM canvas for the integrated design. What we must try to develop within our narrative and canvas is the underlying dynamics that capture the process of change and why this combination provides the value creation.

Underlying any Business Model is knowledge, experiences and insight. These come from combing all our capitals and the ones often described under our ‘intellectual capital assets’ become essential.

Pillar three – Re-framing the debate around our intellectual capital assets

It seems today our business environment is highly diverse, far more dynamic and subject to rapid change. We need to constantly survey the landscape to adapt and adjust, acquiring what is needed. The increasing value is to know all the potentials within the ‘interactions’ of the parts and how to renew and recombine them on a constant basis.

Often intellectual capital is grouped into three or sometimes more categories. The capitals commonly used to describe ICA are human, structural and relationship capitals. In summary:

a) human capital have at its core the competences we build, our intellectual agility and attitudes to form potential synergies for new value creation. Our outcomes are governed by our motivations to want to produce fresh knowledge creation or simply absorb what is ‘out’ there.

b) The structural capital provides ‘the skeleton and glue’ of the organization in its philosophies, processes, routines, infrastructures, culture etc., for permitting and building knowledge. It builds the mechanisms and architecture.

c) Our relationship capital, is our third ICA, which represents our abilities to make connections, to network so as to absorb, exploit and explore new knowledge, it is this new understanding that feeds and influences organizations life, to renew, to rejuvenate, and to offer longevity.

We need to move beyond often just that academic debate around intellectual capital and their asset value, moving well beyond simply infer the value of our intellectual capital, we need to really understand its make-up. It is the interactions of these intellectual capitals that is becoming essential to understand, they make up our innovation capital. Knowledge alone has limited value, it is the knowing how to apply it through innovation that will offer us the potential for wealth generation.

Pillar four – Innovation capital is the essential strategic asset to strive for.

Innovation is made up of a collection of ‘stock’ and our abilities to allow this stock to ‘flow’. We mostly acknowledge and recognize innovation is essential for business growth and our future wealth generation potential. Innovation is for me a real wealth generating capital, it is future orientated; it needs consistent learning, experimentation, exploration and reconfiguring. The innovation capital is the ‘core sum’ of the abilities we can combine from our intellectual capitals.

I believe we need a new innovation capital valuation model. It needs to capture the dynamic interactions of our capitals contributing and ‘render’ these into different productive outcomes. This model needs to find and then separate the ‘dynamic’ from the ‘static’ innovation capabilities, the ones that offer new potential not ones simply repeating the process.

To achieve this we need to unbundle resources, assets, renewables, competencies and capabilities and describe these outcomes in , in my view, a fitness landscape that provides a visual of what you have, what you might need and highlight where the critical gaps lie.

We are needing to understand how our organizations can integrate, reconfigure, renew and recreate its resources and capabilities to build different value creation propositions and business models.

Recognizing the combining effect of the four pillars

For me, it is recognizing the ‘combining effects’ of these four pillars; of value creation (vc), business models (bm), intellectual capital assets (ica) and innovation capital (ic). It is the dynamics within the multiple combinations that will generate the future wealth creation we need.

We are in need of having a better understanding of the integrated value focal points of these four pillars combining, they need connecting so we can build the supporting structures and place the roof of need, our wealth creating one, to give us a new potential of harnessing our innate abilities to be creative. These four pillars offer perhaps a new core, a new transforming power, they make our activities connected and dynamic.

Unlocking all our potential is the job needing to be delivered upon

Our job today is to unlock the potentials from knowledge, harnessing our capitals to focus more on releasing our resources to work on their dynamic capabilities that combine vc + bm + ica + ic to make this a ‘room’ that gives us the potential to reside and generate new wealth potential.

A transforming one, where the make-up of value creation, articulated through business model designs by knowing the capitals that ‘feed into’ and build our stocks and flows for new innovation that does have the greater potential for wealth creation to occur.

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Exploring Diffusion and Adoption for Innovation – Part 3

Dealing with DarwinOne of my favorite books is “Dealing with Darwin- how great companies innovate at every phase of their evolution” written by Geoffrey Moore. It is well worth a read.

When you work through his other books and connected thinking of “Crossing the Chasm” and “Inside the Tornado” you really appreciate the learning stories coming out of Roger Moore’s studies of the Technology Adoption Life-Cycle.

We all need to rethink a lot as the new challenges come rushing towards us. In his work Geoffrey Moore talks about ‘traction’ and I think this is a great word for thinking about how to gain diffusion and adoption in product, service or business models, to gain market and customer acceptance.

Over three posts I am looking at different aspects of “diffusion and adoption”

The first post outlined the different theories and establish their value in our thinking.

The second post relates these theories into their to achieve success in penetrations of our target markets and increase sales through growing adoption.

This is the third and final post in this series, it looks at how Rogers’ theories relate to us in today’s connected world, and in particular with reference to Apple and finally offers up some of the reasons why diffusion can fail to occur.

Seeking even more than ever, the One-2-One (1to1) of many

Marketing departments talk penetration, “message penetration, market penetration” and so often ‘force’ customers to become aware and then buy. Does this really work today? I doubt it.

Also many organizations hang on to old media ways to get their message across when the use of technology, the internet and social engagement may seem harder but I believe is far more rewarding to engage with the customer on a more personalized basis. I regard this as 1 to 1 of many.

Today we are in an ever-faster world

Connectivity is driving the diffusion rates of nearly everything. Just take a look at the following table:

diffusion-rates-table

Even this table is already out of date on the speed to reach critical mass. Companies are not just setting hurdle rates on launch dates but demanding innovations that have critical mass in revenue and when they achieve critical mass.

It is not unusual to set 18 months to achieve critical mass from the inception to settling on the critical factors that make a value proposition to drive penetration. This can only come through engagement and that comes through technology making the connection to the user.

Just study how Apple manages its diffusion and adoption cycle

apple logo differentThere are lessons for us all to learn here. Apple have not been the first into markets, they are a classic fast learner and follower.

Yet they master the convergence of ‘breaking’ technology, design, user experience, pushing materials used and providing ease of use within the make-up of the product, and deliver this ‘bundle’ through the sheer generation of excitement and buzz.

The huge difference is their deep understanding of what can be put together that achieves this diffusion and adoption. What can others learn from this integrated approach to product and people?

Take the iPod for example

ipod earlyThe first digital music player entered the US market in 1998 and it was not until 2001 Apple released the iPod. The market had already shown signs of plateauing at the time of Apple’s launch, which must have been worrying.

Yet it was the unique factors of Steve Job’s clear vision of what a musical experience should have, Apple’s superb understanding of design and usage of materials, and its building upon the growing brand recognition and reputation as front edge.

Yet Apple also benefited from previous product releases because the behaviours and expectancies were being understood and were able to be articulated far more to validate and confirm Steve Jobs emerging view on what customers actually wanted- their own unique choice of music in the palm of their hand.

Steve Job’s innate sense of driving a solution to a winning value proposition by demanding all the parts to be incorporated, often taking uncompromising positions, was the additional factor. For example, being determined to offer a progressively growing store of downloadable music provided that incredible ‘complete’ usage experience. It met an un-articulated need but saw the different signals in its convergence of a total package.

paul-apple-quote-adoptionApple gave everyone in the adoption curve something that set their imagination alight. Recommendations compounded so even late majorities and laggards felt compelled to buy, and the sales simply exploded.

The basic criteria with the theories of Roger’s Diffusion and Adoption were met.

Then look at the Apple iMac

IMac imageFor the consumer, Apple took away complexity. The learning gap became dramatically reduced. It was quickly understood you took your computer out of the box and plugged it in.

The complexity of most of our past experiences in complicated set ups, the need to download and fiddle with conflicting software, had been taken away.

Apple set about integrating the system and providing a better user experience. It did away with proprietary connections, set USB and CD-Rom drives as their standard, dragging along most in the industry. It again focused on pushing to the maximum from Rogers characteristics of innovation.

The iMac proved to be phenomenally successful, with 800,000 units sold in 139 days. It’s translucent plastic case, originally Bondi blue and later various additional colors, is considered an industrial design landmark of the late 1990s.

Again design, attention to details, focusing on user needs to reduce complexity, offer relative advantage, make the way forward as compatible and integrated, allowing a fast set up to gain immediate experience and a great design or observability ticked all the boxes of Rogers Five Factors.

Then we get to the iPad

Apple IpadWhere do you start? The iPad had built-in Wi-Fi and, on some models, cellular connectivity. An iPad can shoot video, take photos, play music, and perform Internet functions such as web-browsing and emailing.

Other functions—games, reference, GPS navigation, social networking, etc.—can be enabled by downloading and installing apps. As of October 2013, the App Store has more than 475,000 native apps by Apple and third parties.

There have been five versions of the iPad. The first generation established design precedents, such as the 9.7-inch screen size and button placement, that have persisted through all models. The iPad second generation  added a dual core Apple A5 processor and VGA front-facing and 720p rear-facing cameras designed for FaceTime video calling. The third generation added a Retina Display, the new Apple A5X processor with a quad-coregraphics processor, a 5-megapixel camera, HD 1080p video recording, voice dictation, and 4G (LTE). The fourth generation added the Apple A6X processor and replaces the 30-pin connector with an all-digital Lightning connector.

The iPad Air added the Apple A7 processor, the Apple M7 motion coprocessor and reduced the form factor for the first time since the iPad 2. iOS 5.1 added Siri to the third and fourth generations and the iPad Mini. There have been two versions of the iPad Mini.

Apple were delivering wave upon wave of new technology in a rapidly accepted format.

A story of design, combining technology, understanding the unmet needs of the market, combining revolutionary materials. It filled a need, and it ticked all the boxes again of Rogers Five Factors of Product.

Yet we had by this time the real effect of the People Difference.

Apple Community 1Apple have such a powerful body of innovators and early adopters creating such a pre-launch noise, it draws in early and late majorities. Apple has been a fashion ‘must have’ statement.

Demonstration of products in Apple stores are ready to be put to any user test, the staff are providing you a ‘user experience’ and support structure that understands our needs and provide all your personal reasons to adopt.

paul-apple-quote-speedThe advocates of Apple products are phenomenal. They are nurtured, engaged with and pampered, as they generate such chatter and noise it can’t be ignored. It delivers the powerful messages Apple want to get out there for accelerating sales at mind-boggling speed.

Apple has institutionalized its product and people diffusion, and adoption process – can you?

We can all take away some powerful learning from this by aligning the theories of Rogers, articulated originally in 1962 and see how they seem highly relevant to Apple’s approach to its thinking. They have added triggering (conversations, user experiences) with contagion and have been working the different tipping points to gain market traction, penetration and constant appeal to stay up to date and in tune with the latest and greatest.

Lastly let’s remind ourselves of why diffusion often fails to occur

1. Getting the price wrong and staying stubbornly rigid with it

2. The wrong identification of the target markets

3. The poor selection of channels often because they are known, and they’re the sales forces’ most comfortable point of contact

4. A really poor communication of the product or service benefits

5. The unique attributes are over-hyped and quickly not seen

6. The new product really does not give much benefit over existing products

7. It simply has no innovative advantage, it was more of a cost- reduction exercise

8. The ease of access to the relevant information about the product is complex, difficult, time-consuming and unclear. It becomes complex

9. The real needs and expectations of the consumer were actually ignored, never discovered or just not met

10. The product or service offers no really clear value proposition to switch and buy.

I’m sure you could add a few more but I leave those to you.

The principles of diffusion and adoption I believe are both important in innovation.

Working the diffusion and adoption theories and putting these into your practice is something that needs an integrated approach, it might develop over time, perhaps through serendipity but knowing its principles helps you begin to map out the pathway.

This is the third and final post within the discussion on exploring diffusion and adoption for innovation.

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.

 

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Exploring Diffusion and Adoption of Innovation – Part 2

Finding itThe future within our engagements will determine diffusion and adoption

It is all about letting go but also grabbing more at the same time, and then finding ‘it’.

Technology has opened up the door to both scale and fragmentation and social business is the one pushing through this open door. We are increasingly facing the Collaborative Economy everywhere we turn. Social business is becoming the denominator of success or failure.

We are needing to confront the new questions that are emerging

New rules are emerging – you could say new theories – and where are these fitting within the corporate mindset?

The shift of what our customer means to us, are we still competing with them, pushing them to accept a value proposition that forces them to begin to look elsewhere?

Are we still determined to hang onto control, in the (mistaken) belief we know what is best for our customers?

learning-the-power-of-cocreationAre we really bothering to learn the power of networks, cultivating communities, fostering co-creation and optimizing shared-value, instead of just creating and selling things?

Are our structures and processes still stuck in the past or are you transitioning to managing a more social business that operates in more dynamic ways?

There are a huge number of new rules and ways to manage. It is the ones that master these that will succeed in diffusion and adoption at very different speeds than we can imagine today.

In three posts I am discussing different aspects and challenges within diffusion and adoption for innovation

The first post outlines the different theories and establish their value in our thinking.

The second post, this one, relates these theories into their to achieve success in penetrations of our target markets and increase sales through growing adoption.

The third and final post in this series looks at how Rogers’ theories relate to us in today’s connected world, and in particular with reference to Apple and finally offers up some of the reasons why diffusion can fail to occur.

Back to this blog……..

We are all in need of answering numerous questions and finding our way.

Social media is for many business organizations, the new kid on the block

It is relentlessly chipping away at the fabric of how organizations have been organized. In less than half a decade societal and cultural shifts through technology, the transfer to global open digital networks have taken us way beyond “just the internet” for connecting.

We are in need to engage in totally different ways. It is really not good enough to sell just products and services anymore. These are basic value propositions. Customers are looking on how these are connected into different “bigger pictures”. 

The questions of your sustainability approaches, environmentalism, corporate social good and responsibility and a growing interest in governance are shifting their thinking. Your customers are wanting to connect and establish a different level of trust than simply those invested in a brand name, that is becoming table stakes or even irrelevant. We are moving into a very different territory. Grasping the changes to your business are highly challenging.

Large organizations are being challenged by the sudden rise of self-organizing communities where people come together online and create shared value that often forms an immediate organization to challenge the existing. Traditional business models need to learn to adopt in different ways themselves.

In an era of high-velocity online start-ups, where the next generation of digital businesses are taking up the space as they focus increasingly on the dynamics of social business where does this leave our existing organizations?

Everything has sped up, we diffuse and adapt in seconds

There is an urgent need to “letting go and grabbing more”. Traditionally “we” provide products and services and many of our existing organizations are slowly coming to grips with providing on-line services. The belief is this is enough to satisfy customers, keep them buying and using the product or service. Is it?

The social connected economy has reversed the relationship. Consumers just want to use and have provided product and services on ‘their’ demand and seek increasingly the platforms where they can easily go to find out and then use the required products and services. Often they don’t want to buy these, they just want to rent them to do the appropriate job.

The whole movement of jobs-to-be-done, identifying customer needs is yet again a place of increased focus. The larger organization still struggles with this as it wants to fit this ‘seen’ need into their structure and system. They are spending growing time adapting while others are pivoting quickly to capture this fluidness in need.

the-new-social-economy

In many ways diffusion and adoption lies more in the organizations inabilities than the customers. Perhaps the theories of Rogers have reversed. It is the power of people and how organizations react and determine differences that will determine diffusion and adoption, as explained by Everett Rogers. Dion Hinchcliffe, an expert on next-generation enterprises suggests an Engagement Fabric.

Are we in a reverse situation for diffusion and adoption?

Consumers race to diffuse and adopt, it seems our larger business organizations struggle. The organizations are the ‘laggards’.

We need to think about the organizations ability to engage at scale. Perhaps we need a further theory to add to Rogers ones. The interpretation of the Engagement Fabric goes like this for aiding diffusion and adoption:

The organization as one does need to engage to any, not many. It is the ability to allow information to flow; we learn to aggregate stories or decipher trends to engage back to new groups of audiences that see your diffusion as valuable to their adoption.

The organization continues to throw open its store. The ability to engage and promote self-organizing communities to exchange and extend around our product and services and keep them as engaged stakeholders who you work to keep involved in the evolution that triggers better innovations.

Simultaneous engagement that is constantly synchronized with the evolving story, built more on business and social value, less on your product or service. Constant insights and thinking get captured for its ongoing community value and ability to keep improving on the product or service offered.

Making the space highly visible and user-friendly. By ensuring ‘ease of access to knowledge you are allowing conversations to build and become increasingly valuable to all involved in the community.

The ability to analyse, interpret and filter. Offer the place that captures the many good insights so as to set about the continued building of value into your products and services.

preparing-for-engagement-at-scale

So we need to transform our own internal design to better diffuse and gain increasing adoption

To quote from Dion Hinchcliffe whose future thinking I have drawn heavily upon for this post makes this comment:

The future of the enterprise requires a mindset that doesn’t think in terms of fixed markets or point products or services. Instead, we must create, cultivate, and control fast-moving and highly competitive ecosystems of people, information, and value across a virtually unlimited number of channels.
Those who can move first, co-create, and own the best class of information and then deliver it in forms the market wants, when it wants it, will be the winners in the short-term and long-term. Companies organized to do any less than this will falter and fade.”

We need to rapidly move to an engagement platform

Diffusion and Adoption are even more of a business organization’s challenge to adapt to the most significant set of changes since the internet. It is the power of all the disruptive technologies, the power of social business and the incredible impact of all the connected networks are accelerating acceptance or rejection.

Diffusion and Adoption is so far more complex but the principles of Rogers theories, offered nearly fifty years ago, can help to understand a single innovation perhaps.

It is today the way you build your platform for engagement which will determine where you stand in any adoption race for the health of your business and its model in the future.

It is the business organization that is in its race for adoption.

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.

 

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Exploring Diffusion and Adoption for Innovation – Part 1

Theory and RealityAccording to Professor Clayton Christensen and drawn from his book Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change”, by Clayton M. Christensen, Scott D. Anthony, and Erik A. Roth published by Harvard Business School Press, the only way to look into the future is to use theories.

The best way to make accurate sense of the present, and the best way to look into the future, is through the lens of theory.” The theory of innovation helps to understand the forces that shape the context and influence natural decisions.

This might not be fashionable for many because as soon as you introduce “theory” into the discussion for many of my practical colleagues they want to dismiss it.

Going back to Christensen “good theory provides a robust way to understand important developments, even when the data is limited. “Theory helps to block out the noise and to amplify the signal”.

Diffusion of Innovation Theory is important for our innovation understanding

One set of theories I believe we simply cannot ignore even more today lies around the work of Everett. M. Rogers where he outlined his thinking in his book Diffusion of Innovations the first edition was published in 1962. The fifth edition (2003, with Nancy Singer Olaguera) addresses the spread of the Internet, and how it has transformed the way human beings communicate and adopt new ideas.

Over three posts I will look at different aspects of “diffusion and adoption”

The first post, this one, outlined the different theories and establish their value in our thinking.

The second post, relates these theories into their to achieve success in penetrations of our target markets and increase sales through growing adoption.

The third and final post in this series looks at how Rogers’ theories relate to us in today’s connected world, and in particular with reference to Apple and finally offers up some of the reasons why diffusion can fail to occur.

First we need to have a clear grounding or reminder within the theories

By developing our understanding of why some products seem easier to diffuse while others can take longer or often fail, innovators can improve their likelihood of understanding the differences through exploring these different diffusion and adoption theories.

Besides the classic “S-shaped curve” associated with diffusion it is useful to also reflect on this tougher curve to manage from its development costs into profit requires a greater focus on the commercialization stages.

product-development-cycle-profit-loss

Product and People determine diffusion and adoption

According to Rogers the rate of diffusion can be attributed to a combination of “product differences” and “people differences”

Product differences

Research suggests that up to 87 per cent of the variance in an innovation rate of diffusion can be attributed to the following five product characteristics. These are known as Rogers Five –characteristics of Innovation.

Relative advantage refers to the degree perceived to be better than the product (or service) it replaces.

Compatibility is the extent to which an innovation is perceived as being consistent with the values, past experiences and needs of potential adopters.

Complexity is the degree to which the new innovation is perceived as being difficult to understand or use.

Trialability is the degree to which the new innovation can be experimented with, piloted and used on a limited basis.

Observability is the degree to which the results of an innovation are visible, observed and communicated to others and where the rate of adoption can often be determined.

People differences

Once the product’s position in relationship to the Rogers Five Factors is known, the diffusion process is best managed by focusing on the people difference. The classic bell curve is broken down in the five categories of adopters. 

crossing-the-chasm

It is from this initial work of Rogers we then got Geoffrey Moore’s classic on “Crossing the Chasm” which recently have been significantly updated in a recently released book around the Technology Adoption Lifecycle. The chasm can happen throughout the early adopters phase, you have to be alert and responsive enough to finding solutions quickly enough to bridge this and ‘cross that chasm.’ Pivoting on the parts that are good, exploring the parts that are needed.

The five adopter categories are:

Innovators- venturesome, risk-taking, information seeking, early seeking status and very experimental, enjoy the degree of early challenge or even uncertainty involved.

Early adopters- Often respected opinion leaders within their social groups, seen often as role models for others.

Early majority - more deliberate before adopting new ideas; interact frequently with peers and trendsetters. They like to merely stay ahead within the curve from that more informed decision-making.

Late majority – Tend to be sceptical, cautious to adopt but ‘feel’ pressure of peers to adopt, tend to need intervention strategies to overcome barriers and see their ‘needs’ resolved by the innovation

Laggards – Traditional , last in the social system, often they pay little attention to opinions of others, they have more a clear point of reference in the past to overcome, are often suspicious of new innovations and their decision process is often lengthy.

product-adoption-chart

Then we have the decision process or stages of adoption:

Awareness and Knowledge refers to a customer’s acknowledgement of the presence or existence of the new innovation and where they form a general perception of what it might entail and is often driven by the intersection of need recognition through marketing communications. This is the point of being inspired to find out more.

Persuasion and Interest – this occurs when a consumer processes the available information associated with the innovation and considers the product or services appeal on this. This positive or negative attitude tends to be based on the five characteristics mentioned above. Here the consumer actively seeks out information and details.

Decision and Assessment – Having considered the persuasion factors the consumer will come to a decision about whether to adopt or reject the innovation. Their activity in seeking out advice, data gathering, comparing or making different assessments happen clearly here. They consider the switching costs and weighing the advantages up. This is the hardest stage to understand.

Implementation and Exploration – These are the series of activities to put the innovation to use. The consumer employs the innovation to a varying learning degree. The usefulness is determined and they may search for further information about it.

Confirmation and Adoption- is mostly concerned with post-adoption behaviour exhibited by the adopter, reinforced by the innovations actual delivery against the relative advantage ‘claims,’ its complexity and compatibility on their understandings. The individual finalizes their decision to continue using it or searches for extending its use to its full potential.

So in summary for this opening post:

Diffusion is the manner in which innovation spreads. It is the degree of how we facilitate, accelerate, and sustain it.

There are constant difficulties of exploiting these different theories within organizations, the questions are where to place the emphasis and the means of communicating these. The process is contingent upon the structural, cultural and size and scope considerations.

You have to watch for that constantly changing the implementation requirements and lack of sufficient resources or application, as they considerable constrain the innovation outcomes and often you don’t spot these until it is too late

The execution or commercialization stage of any new innovation often fails to address the theories offered by Rogers adequately enough, then organizations often suffer poor diffusion and adoption rates, unaware of the considerable efforts this stage of understanding diffusion and adoption needs to address.

The second part of this post will deal with….

My second post in this diffusion and adoption discussion will deal with managing within a far more fluid set of conditions than we seen to be facing than previously. The combination of technology, social media and the internet gained a ‘closer’ relationship with final consumers encouraging engagement and feedback has introduced a far more dynamic environment.

Innovation adoption or rejection is getting riskier, far more complex and we need to bridge the learning gaps far better and smarter. Are Roger’s theories still relevant or even more so today and in the future?

Then the third post provides different examples of diffusion and adoption and offers a starters list of why diffusion can often fail to occur.

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.

 

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Opening up the Stage Gates to let the new innovating world in?

Stage Gate hurdlesThere is no question the Stage-Gate process has had a significant impact on the conception, development and launch of new products. Yet there have been consistent criticisms of it, as the world of innovation has moved on. Today it is faster-paced, far more competitive and global and become less predictable.

The cries of the Stage-Gate process as being too linear, too rigid and far too planned, bordering on prescriptive have often been heard. The gates are too structured and the constant ‘creep’ of the controlling bureaucracy surrounding it in paperwork, checklists and justification has simply led to so much non-value-added work add to the moans and groans.

Surprisingly, the Stage-Gate concept was created in the 1980’s and led to Robert G Cooper’s different evolutions of this evolving and absorbing many new practices and experiences gained by different organizations across this time.

I’ve written previously on this blog site about the concerns within this Stage Gate system if organizations allow the ‘controllers’ to dominate over the ‘creators’ of innovation what can happen. We end up with “self-inflicted wounds caused by jumping hurdles and closing gates on innovation.

The idea-to-launch gating system is under more threat today than ever before.

Is there a potential new generation or are we just going through the motions, like shifting deckchairs on the titanic as it steams towards a submerged iceberg? Bob Cooper has been open enough to challenge his thinking constantly and at this point of time he is reinventing the Stage-Gate again.

The details of the new process and its different multifunctions are still a work-in-progress. What he is looking for is something far more agile, vibrant, dynamic, flexible gating process that has as its outcomes a leaner, faster and more adaptive and risk-based approach. This alone in its principles is a great starting point.

Bob has been writing on this with different papers that have included “What’s Next? After Stage-Gate”, a far more academic one I have been (slowly) working through. It was well worth the read.

So what can we see that is ticking away in the new Stage-Gate thinking?

Will this be enough to reduce the criticisms, will it be adaptive enough to meet today’s needs? I will attempt to shorten down this thinking and try to summarize the main points.

It has three parts to it- it focuses on being 1) Adaptive and flexible, 2) Agile in its deliverables and 3) Accelerated to push the development process.

1. The adaptive and flexible part

Any idea-to-launch system will take its power from being adaptive and flexible and will need to shape itself to the context of each particular project. That is radical enough in any system. The qualities are going to come from four attributes: spiral development cycles, context-based stage and gate definitions and activities, risk-based contingency models and flexible criteria for any ‘Go/Kill decision making.

For instance the spiral development will be based on ‘build-test-feedback-revised’ iterations. The context-based stage and gate definitions and activities to accommodate multiple versions to deal with full five stage higher-risk projects, lighter versions for moderate risk projects and an express version for small developments. There are different adaptations taking place with users already working through these.

For instance HP has approached this by geographical needs with an emergent model for start-ups, an agile model for growth sectors and a traditional phase-growth review structure for mature markets.

P&G have not employed different processes but focused more on the value-driven process that focuses even harder on the front-end.

The risk-contingency is about constant steps and learning to gather information to reduce uncertainty. Here teams are working far more with blank canvas approaches to identify key unknowns and uncertainties, then determining what information is needed to validate and move in highly flexible and efficient ways. The value of having an experienced team helps here.

Finally in this part the flexible criteria for ‘Go/Kill’ decisions become the change in order of magnitude for me. Financial criteria begin to take a back seat; it is more on strategic criteria as it has always been so difficult to predict the longer-term impact. The move to non-financial criteria will radically alter the dynamics within innovation in my opinion – if this really does take hold.

2. The Agile approach

unfettered-project-phasesThe stage-gate needs to become far more nimble, speed is the essence. The growing adoption of the Agile development process applied to software is the point of change. The use of “sprints” that are “time boxed” and “scrums” for meetings, are designed to deliver working (physical) products as functioning prototypes. These become “physical milestone objectives” and if these are not achieved then you move into the risk of termination. The emphasis is demonstrating to stakeholders working physical progress. Clearly this becomes more resource intensive but true innovation does require that.

Some organizations are approving projects and resources to have unfettered six-month periods with no rules and no reviews but at the end of this agreed period ‘something’ has to be seen and tested by a customer.

Equally the drive to cut out the “work that adds no value” has involved using Lean Six Sigma methods or similar to take past business case documents from 30 to 90 pages to now 4 pages by Johnson & Johnson. P&G for instance are working on mere six page deliverable packages according to Bob Cooper.

3. Accelerated Process

The focus is on reducing the time wasting activities through a more value-stream analysis, accelerating by overlapping stages, encouraging concurrent activities, ensuring dedicated teams are assigned to properly resource projects, those real concerted efforts to sharpen up the fuzzy front end and automate these through clear support project systems are all being worked upon.

Toyota uses a synchronized process for simultaneous execution and search for ways to improve on this continuously.

The emphasis is to maximize speed, working really hard on scoping the front end in greater detail, and asking key questions on where the right track is and what this needs in resource, time and development.

So there is significant evidence that Stage-Gate is evolving

next-generation-stage-gateSome of this is evolutionary, such as fast-track versions, and some more revolutionary, based on more risk-orientated contingency models.

The continued need is to get the next-generation process to be adaptive, flexible, agile and accelerated. The use of the evolving value proposition through prototypes and early beta market testing versions is part of this.

The starting point is with a blank canvases, exploring constantly the uncertainties and risks – determining the critical but evolving assumptions, and working to deliver the right deliverable at the right stage to validate the key assumptions – calls for a completely different mind-set.

Is this radical or simply catching up with the changes that we have been seeing taking place in innovation to deal with the pace of change? One that can fit better in our evolving global world that is more impatient than ever, not bothering to wait for those focused on managing the stages and gates in old world ways. A time to move on I think for us all?

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.

 

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Exploring the criteria for collaborative innovation

Collaboration discussionsThe shape of our collaboration activities has been radically changing in recent years. The combination of technology, the internet, resource constraints and opening up of innovation to the outside world has changed the shape and content of conversations.

Shaping conversations can be either intentional or through serendipity. Ideas are usually never fully formed but emerge over these conversations, from fragments that need nurturing, encouraging, aligning and developing through ongoing conversations. Often the fragments need a wider network to come together and form around.

sharpen-ideas-quicklyThe push today is the ability to sharpen the ideas quickly and move into some early testing and validation, ideally with the final customer somehow engaged and then from this ‘interaction’ the idea shapes and its final understanding deepens onto a concrete delivery. There is a growing need for more radical, out of the existing box innovation to tap into. Collaborators help here.

Collaborations are far more complex and I suggest our thinking this through might be managed in three phases of understanding: Identification, definitions and then diffusion.

1) The first part is identification

identification

Here we are looking to maximise our connections, we are searching for diversity to help explore and then reframe emerging ideas. The search for different perspectives always needs to be brought in.

  • The hardest part is defining the problem to tackle and then be adaptive enough to make changes as you learn and discover. We need to constantly expand our networks through partners. The level of trust within these partners needs establishing, testing and constantly reaffirming.
  • The search to engage: we need to find the brightest, the best, the more engaged to get the quality of conversation in both breadth and depth. We should not be quick to dismiss but actually seek out reciprocal learning, perhaps working on a ‘pay it forward’ approach.
  • The often over used ‘win-win’ does need our constant attention because if we all are focused on the value-creation opportunities for all involved and less on the value capture for one we are going to grow our collaborative efforts over time in far better ways. These become true partnerships.
  • Knowing who you are dealing with, their level of knowledge, experience, the track record behind them and their organization allows for a growing compatible level of commitment as each value the other, within any collaboration. Each appreciates the other and values them for what they bring.

2) The second part is definitions and delivery

definition

Projects today are always looking for speed, who you bring on board needs to possess the right capabilities but you need to be clear on what these need to be.

  • You need to search for the complementary in any collaborative innovation, you want to avoid or minimise the duplications.
  • The working out of contributions and rights in any collaborative project need addressing early. The search for striking the balance, achieving equitable assignment is tough when it comes to IP but it needs addressing as early as possible.
  • The motivation for collaborating needs better understanding. Reputations and credibility are made or broken on structuring collaborations correctly as ‘good partners’ become known fairly quickly in areas where there are limited players or potential partners. Establishing this credibility ‘stock’ gives significant advantage.
  • Compatibility comes in all shapes and sizes but culturally compatible in style, openness, sharing and possibly management outlook are important to establish.

3) Diffusion has to be mutually supportive and is moving towards building established ecosystems

diffusion

We’re increasingly looking towards ecosystems to build around us. These have completely different needs to manage and reflect upon, and why I have separated this into a clear phase. Managing the diffusion through ecosystem collaboration is often highly complex for more radical innovation.

  • Firstly, these ecosystems might already be available to tap into, or we may need to build a new one. This calls for true catalysts to handle the growing complexity that needs consciously managing and drawing in others to the cause.
  • Partly these ecosystems might need to be built as the idea is radical or architectural. We need a clear ‘define the cause’ to which we can group around. Ecosystems need that symbiotic relationship to work. Knowing what makes this is important to keeping the relationships and collaborative efforts flowing and building in sometimes difficult circumstances.
  • The level of early identification of the interdependences within the collaborative partners is important. Organizations are increasingly looking to fully integrate partnerships that will work not just at the front end but throughout the innovation value building process right through to final execution.
  • The compatibility of the partners and the people working within the ecosystem need the same identification. Who has critical impact on its success? The dealing with potential ‘choke points’ where you may need additional partners can lead to stability or crisis in complex partnerships. The project leader needs to continuously identify and drive towards solutions.

Problem solving always causes its own friction

Any ecosystem should remain transparent and have this constant re-affirming mapping back to the collective value-creation proposition identified at the stage or as adapted as the ecosystem learns, it becomes updated and recommitted as it evolves. Often a more radical innovation platform takes some of the participants outside their comfort zones, the importance of a visionary insight about the potential becomes key to help contain and manage this. The emphasis on emerging compatibility or extending core within their existing business often needs to be conveyed to dampen this concern down.

Working in complex ecosystems is not easy, the partner selection, the managing of the system usually requires clear and well-honed project and management skills. Engagement will thrive or flounder on the mutual understanding of the benefits and these may be very different as an end goal.

Identifying what makes up your collaborative design early is important

challenging-existing-behaviorsThe key thread that is consistent during these three phases of different collaborations of identification, delivery and diffusion is that it is challenging the existing behaviours usually found in closed systems. The need is to replace ‘competing’ with ‘collaborating’ and that is not easy.

Collaborative innovation is about exploring the dispersed knowledge by attracting; foraging and experiencing that can make up collaborations. These more open, external collaborations will enable organizations to discover, sharpen and shape innovation in very different ways than being reliant on ‘just’ themselves. Yet collaborating requires a real growing specialisation within any organization.

The earlier you can identify the critical aspects, the more likely you are to ‘allow’ collaborative innovation to work but it is hard work.

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.

 

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So what is holding innovation back? A new GE report

GE Global Innovation Barometer 2014I always look forward to the GE Global Barometer and the 2014 report is no exception, actually it really has moved the needle on what is presently holding innovation back. The Barometer has explored the actions or constraints that senior business executives are worrying over in their pursuit of innovation.

The fieldwork was undertaken in April and May, 2014 and covered 3,200 phone interviews to people directly involved in the innovation strategy or process. It covered 26 countries and was conducted by Edelman Berland on GE’s behalf.

The supporting website provides the GE view of how this report reflects and provides an overview, an interactive, resources and key point headings sections to explore.

I  personally think GE have actually been a little too low-key on this report and frankly far to conservative on the potential takeaways in reading their ‘take’ in the overview. It has significant implications for our organizations to grapple with but each is certainly not alone, it is a collective need to move innovation forward or you place much at risk if you don’t find solutions to the issues raised in this report.

This year the Barometer broke out of its past and steamed ahead.

The GE Barometer report for 2014 does seem to have broadened out its assessment on innovation, in my opinion, into a more comprehensive one around three aspects: 1) What are today’s drivers and barriers, 2) what are the trends, practices, myths and realities and 3) the country and public policy issues to tackle for supporting innovation.

There are two reports, one is a summary that can stand alone to quickly grasp the issues but does not really do the real justice that the full report provides in 68-odd slides. I’d recommend you explore both.

So what do I  have as my takeaways from this GE Barometer 2014?

I have summarized thirteen points that make some more than helpful insight into what is holding innovation back. In some ways by not cracking some of these it will kill off some businesses and this increased anxiety and fear I sense runs through many presently engaged in innovation, it is these that ‘reveals’ these tension points within this report. Take a read and see if you agree?

These are my thoughts summarized in these thirteen points gathered from the report:

1. Inequality, caused increasingly by technological innovation, will have a growing impact and fears on the ability to innovate, if innovation within countries or regions is not recognized as a real wealth creator or destroyer and its enablers are not effectively put into place and leveraged. The ability to resolve this or not, will have significant impacts on the lives and country positions within the global race for innovating competitiveness.

2. It is interesting to see a fairly equal view on the challenges being presented by a technological shift is either a revolution (52% think so) or an evolution (42%) and it does seem a number of emerging countries are rising to the challenge. Whereas the established ones might be less caught up in this, seeing this as part and parcel of radical changes going on. I think there seems an underlying complacency in some, a determination in others to shift the dynamics of how their country is seen and invested in.

3. The effect of this multifaceted change going on where greater collaboration convergence of technologies, the place of Big Data and the Internet of Things (IoT) seems to be leaving many of our organizations ill-prepared to embrace these.

4. External collaboration is a confirmed reality, the world over and it seems most organizations have passed through the downsides and see open collaborations as “risks worth taking” to innovate successfully today.

5. Big Data seems to be dominating many people’s minds today. 94% accept the reality of Big Data as something here to stay but the fears; constraints and impact, are far from worked through. Naturally you would understand this as Big Data is very emerging in its redefined concept but you gain a really clear sense of significant resistance to focus on this and how organizations are (totally) lacking in their abilities to capitalize on this. Some are actually “dreading the challenges and impact” it will have.

6. The Internet of Things (IoT) is seen to likely have a positive impact on jobs but 44% of those surveyed surprisingly had not heard of the “Industrial Internet” notion when asked. As this is a ‘GE-speak’ view of the more popular IoT it might not be a surprise as I can’t believe these level would not have heard or thought about IoT surely? There are clear ‘lead and laggards’ in different industries, with many indicating they are “not quite prepared” or “not at all prepared” for what this means on their business. (OMG!)

7. There is a review of how the global game of innovation is being played out with the balance required to localise the needs. ‘Glocal’ still resounds for many but I think this catch phrase might be not reflecting the true inability to tap into specific market needs and from this, local innovation might be significantly constrained. Like to understand this more to see if I might be right here, I think so.

8. The focal point of GE’s press release was entitled “Disruption Ready” yet there seems a huge anxiety here. The difficulties of changing mind sets, behaviours and processes is potentially going to “kill the business” is suggested, unless the ability to quickly adapt and implement emerging technologies is not undertaken. I think this needs a greater all-encompassing reflection as disruption itself is getting a lot of ‘airing’ at the moment. In this report 72% state they will protect their core business profitability and believe (mistakenly in my opinion) successful innovation (62% of responders) will come from planned innovation. Perhaps but not in the present way we structure innovation.

9. There is a strong continued worry over (a lack of) internal agility was acknowledged but the citing of “internal inertia” is seen as a critical challenge that can equally “kill their business” rings some real alarm bells for me.

10. Speed-to-market is split right down the middle. 50% believe getting to market as quickly as possible is key, 50% argue “not to rush” and take the time to perfect their innovation (another mistake in my opinion)

11. 60% of all interviewed still deem it difficult to define an effective business model and yet another seen challenge that is “killing the ability to innovate”. The scaling of innovation is equally seen as a concern and part of this real underlying Business Model issue. With all the progress on BM’s you would think organizations would be working this defining and experimenting with different BM’s well through? The understanding, concepts and frameworks are out there but the board room seems to be blind to embracing this. It will change that is for sure.

12. The area that seems more ‘ripe’ for engaging and collaborating is between public sector and private industry on working through the needs for innovation and laying in the right policies and frameworks. The growing recognition that SME’s are leading the recovery charge, the encouraging of more start-ups and attracting into the country the multinational is tough to get into the right balance. The public sector ‘reaction and responses’ lag more than lead and taking too much time to bring into place the factors for promoting innovation but within this report are some great slides on issues that can frame some healthy discussions and allow all the sides within the country innovation debates to engage and work out the evolving frameworks. I liked this section to help in this.

13. Lastly I liked the self-evaluation of each respondents view of their own countries innovation improvement or not, around that countries innovation framework. The developed countries are in need of waking up and listening, it seems.

My summary from the report.

So a rich report with lots of issues that do, it seems, need to be unlocked, unblocked and further uncovered to allow innovation to deepen and take hold. There are so many warning signals that I feel cannot be left much longer to tackle.

When you see “fear, anxiety, dread, killing our business, inertia, not prepared, not heard of, and killing the ability to innovate” it might raise one or two alarm bells somewhere.

Perhaps the alarm bells should be going off within the boardrooms, they need to start paying closer attention here, clearly they are still reluctant to understand and embrace innovation, they are not getting the multiple messages as it has far too many ‘disruptive forces’ to deal with but avoiding addressing these is far, far worse.

I think GE and their Barometer 2014 has some really helpful clues in not only what is “holding innovation back” but more in pointing up to “what needs to change” to allow innovation to really move forward. Please take some time to read it.

I would finally like to congratulate GE for investing in this initiative, it helps serve their global business by knowing more of what is the present thinking across many of their customers and across broad industries and public bodies they work with and it is proving thought leadership. It also allows us all to understand the issues surrounding innovation

I certainly do look forward to where they take their GE Barometer 2015 on innovation as they have raised numerous issues that can be further followed up just from this 2014 report alone.

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