A new raison d’être for HRM through Innovation

Innovation is in need of a significant transformation on how it is designed, developed and executed in most organizations. Traditional approaches to managing this simply need ripping up and redesigning to allow innovation to become more the central core.

In most organizations the Human Resource Management (HRM) function seems to have been far too often side-lined on shaping and influencing how innovation should be designed as a critical part of the future for the company. Many of the existing traditional HRM solutions might actually be in conflict and working against innovation actually.

If we look at the broad areas that HRM has to cover and master in organizational development today, it can, perhaps, leave little time for adding in innovation into this array of demands. You can understand that HRM has little time to master a ‘decent’ understanding of what makes up innovation, when they are grappling with so much already but they should. It might simplify or promote a rationalizing of some of the existing practices built up over considerable time as the expedient option but this is still creating a ‘lagging’ set of effects and not offering the ‘leading’ ones that innovation demands.

Today’s HRM role is demanding and complex, no question.

Let’s firstly remind ourselves what does make up a current HRM role in leading or participating in many crucial areas needing constant attention. These include planning and designing and the executing of change management, seeking out potential leaders, participating in career development and recruitment, managing organization capability and effectiveness in all its different demands called for across a diverse demanding organization.

This goes along with seeking out different designs to team building, organization transformation, building knowledge and talent capacity, let alone the classic payroll, reviews and turnover questions brought on by volatile markets, change of directions or global expansion.

I could add more but organizational development is an extremely tough, challenging and pivotal role, often under-appreciated and struggling to gain their rightful seat at the top table.

Adding innovation as a simple add-on will not work

So adding onto this veritable list of tasks we are appealing for a different approach and more focus on innovation, maybe a little unfair because it is unlikely to work.  I believe HRM should have a new raison d’être making innovation the central, repeating theme running through of all the activities currently being undertaken and mentioned above.

Presently HRM is little involved in the current innovation process where innovation is focused on developing and designing new products, services and often even excluded from the design of new innovation business models to find the best ways to break these out from existing organization design so they thrive and not just survive due to patronage alone.

The management of human resource needs to be replaced with the management of human creativity and ingenuity, as this is the triggering point to innovation success. The critical role of innovation is without question needed for the future growth, wealth creation and organizations potential survival. Who is to drive the human change required here?  I believe HRM should have a lasting design impact and central engagement role in this.

HRM has a crucial role to play in the needs to facilitate and underpin top-line growth through innovation design and bottom-line impact through risk balance and control as people are the essence of innovation. Individuals gain (new) insights, they offer idea generation and the capabilities to implement these through the designed innovation process as new introductions into the world that improve on the existing. HRM needs to make sure this is well supports and happens by ensuring the people factor is well designed into the organization, in every activity for making innovation the ‘way of life’ and well understood as corporately vital to be well support and consistently enhance in capabilities and capacities.

Reversing the current organization design

Over the past few decades, even the past century it has been the organization ‘knows best’ and decides and passes down, the teams are then resourced and empowered and the structure is put in place for the individual to deliver. Today that is not working well.

Going forward this top down approach will simply not work. In the case of innovation the reverse actually applies. The germ of an idea or insight starts with the individual connecting different strands of knowledge and combining these in new and often novel ways. Then they must go and convince others of its value, so they will support this and turn it into a project. This then needs to move up the organization for others to come on board to offer the necessary means, resources and support to achieve the eventual outcome.

Failure to move potentially exciting but ‘raw’ ideas into projects, then into reality by attracting required resource is becoming crucial to be managed. Recognizing this essential shift of bottom up is crucial in organizational design for skill development and approaches throughout the organization.

If we take just one example, the failure to take ideas forward as one area that needs to be treated differently than the current traditional judgement or measurement metric of valuing only ideas just going through the pipeline. If we value experimentation, prototyping and piloting of innovation ideas that did not fully work out or got combined or re-scoped, we can begin to see experiences gained, challenges resolved, obstacles overcome as learning points. This gives a different measuring approach that can reverse current design and reward and show the increasing value of exposure, practice and understanding as accomplishments that build deepening capabilities and highly valued in experiences.

We should be looking for the knowledge and insights gained as part of the robustness of the pipeline. This is one area where HRM can design innovation differently and intervene so as establish the impact of learning as one of the factors to enhance innovation capability. There are many of these intervention points that have a catalytic effect.

Those that attempt innovation gain valuable experience

If HR took innovation into the core of organizational design, the mandate for each person is to get involved in innovation activity to gain valuable experience that enhances the desired capabilities for the future. If innovation is seen as core, you begin to break down the present barriers and mindsets that restrict innovation today by current behaviours, blocking innovating activity or placing constraints in allocating the required resources to ‘allow’ innovation to flourish.

HRM plays the critical role in breaking down the existing barriers (cultural, environmental, structural) and determines the need for information and knowledge sharing to actively lower one of innovations greatest barriers today, the not invented here, that existing within organizations both in themselves and in opening up to external new sources of stimulus. HRM can find clear ways to foster innovation in more open ways.

Moving beyond today’s traditional competencies

In many organisations HRM are adapt at, or certainly working hard at the assembling, managing and deploying of resources to support the work-to-be-done. They pride themselves on managing labour costs, evaluating workforce performance, enhancing productivity and focusing on retaining valued talent. These are well within themselves but are simply not enough in such changing market conditions. They are reinforcing effectiveness and efficiency and these alone are simply not enough for securing the future, it is through innovation and creativity that is urgently needed to be added.

Future leaders need to emerge not from managing existing assets well but in managing in increased uncertainties, being more adaptive, agile and responsive to changing needs. CEO’s are demanding creativity, flexibility and speed to size up, quickly seize and grab breaking opportunity. These newer demanded skills come from knowing how and where to go, to be well-connected across platforms of knowledge, having close client connectivity and being able to extract all the essentials, resources and commitments to enable execution. Adaptability to constant change has a very different mindset to be developed in our future leaders.

The changing role of organization design

There is a consistent need to sustain and secure a steady top-line and bottom-line growth, CEO’s tenure is mostly based on this. What is increasingly needed is to go beyond this expected ‘state’ and deliver the ‘wow’ factor, which comes mostly through innovation. Here top managers have to seek out speed, flexibility and adaptability as outlined earlier in this article but they also need to go beyond this.

Managers need to find the right ways to stimulate innovation in creative and systematic ways and encourage entrepreneurship, more reciprocating in the transfer of knowledge, ideas and practices for pushing across boundaries for value creation opportunities. We come back to the ability to extract new value is in the individuals identifying, assimilating and exploiting knowledge and it is in recognizing this reverse flow, is where the HRM role needs to focus on a different organizational design.

For me building absorptive capacity is crucial and HRM needs to focus far more on understanding the value of this. I loved one suggested description on the absorptive capacity model.  Absorptive capacity is like the alternating current, whereas development capacity is the direct current. Combining this into a AC/DC innovation model then Innovation becomes the ‘power provider’ to growth requiring both currents, with one, a direct current flowing one constant way, whereas alternative current flows one way, then the other, continually reversing direction for knowledge generation that acquires, assimilates, transforms through exploitative learning. HRM needs to leverage ‘exploitation learning’ as a real need for building the power into innovation capability.

HRM needs to be on the cutting edge of innovation

HRM does need to step up and define a new mandate for innovation. If innovation is ever going to achieve a core place within organizations it has to be deliberately designed in for skill definitions, leadership development and knowledge and experiences gained. HRM needs to cultivate, mobilize and capitalize innovation.

To do this it needs to redesign its existing practices and approaches so at least four critical aspects become established as the starting point and way forward while a deeper understanding of innovation is gained:

  1. Recruiting always people for the potential to innovate and knowing what this means in inputs, outputs and expected organizational outcomes.
  2. Nurturing individuals and teams constantly in innovation capabilities and skills and setting about designing a comprehensive programme for this to take hold and stick.
  3. Recognizing and discussing in formal ‘learning ways’ the critical factors needed for success and equally acknowledging and recognizing the learning value of the failures. Valuing both in experiences and organization outcomes.
  4. Build on going diversity into teams, resourced across the organization, augmented with external resources as and when needed, so the teams are varied, distinctive and constantly changing and exchanging experience and are delivering innovation that makes a real difference to the future of the organization.

If this means employing external mentors, coaches and innovation expertise to bring HRM up to speed, then it is well worth it. Having a dedicated external resource to work with you in HRM has the same ‘outsourced value’  as many other activities deemed to be handled by specialists, receiving the support and inputs to your needs that makes sound economical and knowledge intensive sense.

Care of course, is in finding those that have the depth and breadth of required experience to work alongside you, to build up and transfer the appropriate understanding of those innovation needs, until it has been ‘embedded’ within HRM so it becomes fully absorbed and part of the daily fabric of the organization as a new core, well supported and constructed to deliver sustaining innovation.

HRM has a stark choice

HRM needs to take on a more pivotal role for innovation. They can become central for a lasting place to plan and significantly contribute to building innovation capability and capacity or stay more passive and operate always in the outer periphery of today’s and the future corporate relevance that innovation needs to play.

I believe HRM needs a new raison d’être, one that comes from grabbing hold of innovation and making this core to the organizations future design. Building capabilities and capacities for innovation are essential to our organizations future well-being and HRM needs to step up and become far more engaged.

Are we all upside down?

This is one of those ‘rants’ occasionally I feel a real need to express. Forgive me, normal service will be resumed after this ‘break’.

Coffee in hand, soap box set up, let me begin.

Today, we are all struggling to transform ourselves in our businesses, even just within ourselves, to adjust to the current economic difficulties we all seem presently to be facing. We are not only confronted with the toughest downturn in modern times but with all the pressures with the speed of decision-making, technological advances that seem to just simply ‘suck up’ more of our daily lives instead of helping to resolve it. We have the pressures of global competitiveness and calls that constantly are urging us to never stand still because others aren’t.

We often become overwhelmed by the merging, acquiring, rethinking that is going on constantly around us, the changes in processes, new alliances and the sudden emergence of a ‘new kid on the block’ who sees a weakness and rapidly fills that gap overnight. Oh yes, and we still are not very good at being more innovative!

Lots more hot fixes or a more radical redesign?

These pressures compel us to focus on a host of ‘quick fixes’ but what we are failing to recognize is where all these changes fit within our longer term plans. Just finding the opportunity to take out precious ‘thinking’ time to synthesise and reorganize ourselves seems impossible, we are just getting caught up in the flotsam of live, just bobbing along.

We need to not only re-imagine but we need actually breakthroughs in our thinking, some of that bunker busting stuff to give us all a ‘concentrated’ focus on what is important to our business, to our lives and what is important to us as individuals. Where do we grow, where do we go and how do we achieve this? We can’t continue down towards the rapids that lie ahead of us, just around the next ‘economic crisis’ corner.

Where innovation and invention needs to combine

Innovation has an important part to play in this future, far more than in the past. We must try to reflect on the effect of too much cost cutting that is going on at the very fabric of our lives, the communities we live in. Nothing is replacing it, we just seem intent on knocking down what we have presently got and not offer alternative solutions, accept more ‘self-sufficiency’. This will eventually have the very opposite effect of destroying more than creating, it will extract more out of it than we will be able to replace.

Today the rush to cut budgets, to have ‘fiscal consolidation’ will not give a more flexible environment, actually it will be the very opposite. The expediency of the measures to slash and burn is not healthy. Our world has been turned upside down on us, but we must strike the balance between cutting back and building up.

Who is going to allow us the necessary time for rebalancing this mood for cost cutting and provide the leadership and eventually the stimulus for the necessary innovative thinking, so as to enable us to think about how we can rebuild, regroup. We need to seek out new opportunities, we need growth but I think it needs to be from a very different type of economic model. Politicians and mainstream economists all advocate a return to ‘normal’, which I certainly feel is doomed as ‘normal’ can’t be based on the past economic approaches or ways we have organized ourselves.

The task ahead is to do the opposite of what we used to do: we do need to save resources, improve the environment, create jobs, shift to another model for consumption, and restore confidence in the economic system – all at the same time.

Use innovation for resource saving.

Now the time has come for resource saving innovation. to extend what we already have. We need a clear political shift to the new courses that will gear us to to do that. Instead of market economy pricing favouring individuals and corporations we have to shift to ones based more on society. As painful as it is for some, we need to increase the premium onto those short-sighted people who are still insisting and  managing our economies and businesses for the short-term extracting costs. They simply cannot ignoring the need to invest, build and promote more onto the longer term potential for containing consumption as we know it today, and finding new ways of adding different lasting value. We need to invest in the future, we just can’t keep cutting and reducing.

We do need to shift our thinking onto a new type of consumption model; we must practice a more frugal type of innovation that still offers plenty of opportunity if we can break the ‘throw away’ attitudes of society and business design. We need to go back to repairing not just throwing stuff away. To do this the redundancy deliberately built to our products so one part that always seems to break before others and you can’t obtain a replacement, or you find it far more expensive to have repaired than replacing it has to be designed out from the existing product design.

Current material consumption actually is not fulfilling

Did you know that the current material consumption actually is not as fulfilling as we expected, according to work that has been undertaken by researchers, psychologists, and anthropologists. They conclude that less materialistic consumption gives a better and longer lasting feeling of ‘happiness’ than material consumption. They also are suggesting that we have hard-wired into us, that basically human beings still are inclined to want to work together, help each other, and do something for others and with others.

So the good news is that this nagging fear I’ve had that we are just shifting to islands of individuals just connected through our computers remotely seems like we really don’t want that, I do hope so. If we don’t think society really wants this then it can’t afford these billions of islands of individuals, it needs to find new ways to deepen the emerging global connecting model that works more for societies good, than the individual as it seems at present. We lose far too much of that deeper happiness factor it might seem, we become increasingly disconnected, inward and remote and that surely is not healthy for us as human beings that thrive on ‘human’ interactions.

Interestingly this is where the emerging of new connected communities gets exciting. What we have to do, is redesign these dispersed ‘connected’ societies into better economic blocks and find different ways to work together that will give us back a new economic value plus lasting pleasure, satisfaction and identification. We need to reverse where we are seemingly heading and that requires some radical redesign of how we want to collaborate for economic value within these new communities.

Collecting money and taxes becomes a growing problem

I’m just not sure where it leaves national boundaries or who will pay for the entire infrastructure if there is no attribution and way to make sure this happens. Presently we learnt from a recent report that the major banks and the financial global elite, as well as a number of developing nations are now confirmed to have as much as $20 plus trillion in hidden assets stashed away in offshore accounts that are subject to little or no taxation. As a result, around $280 billion is estimated to be lost in tax revenues.

In other words, the multi-trillion dollar banks and wealthy elites are combining in novel ways for avoiding any taxation, while forcing the vast majority of tax paying citizens to foot their tax avoidance bill. Amazingly, the $20-odd trillion stashed away it is suggested represents the overall GDP of the United States and Japan combined. The “scale” of the numbers is staggering and are these huge sums actually being employed for different innovation or just accumulating more the present model of consumptive. So much off shore wealth and financial mischief is ‘killing us’ all off.

I also wrote a blog on this destructive creation http://paul4innovating.com/2012/03/01/the-innovating-era-creative-destruction-or-destructive-creation/ and along with this latest report on hidden assets that is actually putting some hard numbers on this tax avoidance just adds more to this growing concern of a really messed up world that is closing its moral compass.

The time has come to restructure and rebalance production, consumption, and corporate governance and how they work together, in short in a more connected global world is the overwhelming need to invent a new economic model.

So where does innovation fit in any new model?

It sounds actually a little bit of “more of the same but better” as our starting point. We understand that innovation grows our businesses, it can certainly grow our equity, it shows it does grows our economies.  It is one of the best platforms around that can provide you greater economic returns (growth, utilization, new activity) if you set about doing this thoughtfully and right. Innovation should always replace something we have with something better (often today that is not the case) but in different ways than encouraging us to not throw away what we have but to utilize it in better, lasting ways. We can begin to change that right away with some ‘ground swell of push back if we wanted too.

Of course the complexity we are facing today does need a far greater recognition of its ‘multiple’ parts that must somehow fit together in new innovative and novel ways. We still need to offer and entice people to change their existing ways and habits. We need to find better models that will give real new returns that provides more lasting value and identification than what is on present as offered.

Innovation has to be central to our future, it needs a more systematic and integrated approach that has a ‘heart’ that beats on a continuous repeating basis. One that scales accordingly to the challenges we are facing and these are growing in challenges, not declining at present.

It needs a ‘fitness’ that knows where it has to focus and why so you can meet these constant challenges in a flexible, coordinated, well-balanced way with speed and combined strength…..the art of building  increasing agility into your innovation thinking and approaches.

We all need to work on the answers to fixing our current problems; otherwise we face a protracted, maybe bleak future. We certainly do have to turn everything upside down. Innovation and invention need to combine in new powerful ways and we need to search for different business and economic models that put together human ingenuity for changing the consumptive model and perhaps put to use some of the trillions stashed away needing to be put to better use than just sitting in offshore funds.

I wish I had some decent answers but my first need was to write about my increasing concerns here. I hope this ‘rant’ prompts your thinking to stop and think a little more.  There are answers; we just need to find them faster than you think, I feel. There are enough burning platforms already around us.

Well let me get off my soap box, my coffee is cold and I need to warm it up, certainly I’m not going to throw it away!

Self-inflicted wounds caused by jumping hurdles and closing gates on innovation

Many organizations have made Stage-Gate or a mutation of it, their ‘go-to’ innovation process that all innovation must ‘somehow’ pass through. Squeezing all types of innovation through this, for whatever people claim is a linear process, is simply wrong.

You can simply say: “we destroyed much to get sometimes so little out as the final outcome, when initially it was seen to be so promising.

The difficulty is that we are still struggling to find a real alternative, although there have been some recent noteworthy attempts, firstly by Jose A Briones and his Spiro-Level 3D approach and then by Paul R Williams, of the American Institute for Innovation Excellence, to move the discussions beyond the Stage-Gate process from this linear into more spiral concepts and beyond.

There has been an awful lot written on Stage-Gate, some people attacking it and suggesting it “guarantees mediocrity for your business”. Clayton Christensen has suggested “the Stage-gate system is not suited to the task of assessing innovation whose purpose is to build new growth businesses, but most companies continue to follow it simply because they see no alternative”

Stage-Gate has certainly earned its place for product management.

Stage-Gate is an ideas-to-launch process that encompasses a solid body of knowledge built up over the years and has for many become the blueprint for managing the NPD process, reinforcing effectiveness and efficiency as its core discipline. I would argue that’s it! It reinforces but at what cost? Innovation can actually miss out! Often it can also extract out much of the very process that we need from great innovation to leap forward and grow our businesses today. More on this later.

Employing this Stage-Gate methodology you can feel safe that there is behind it a body of knowledge on the best practice gleaned from studies of thousands of new product developments. The process takes you through stages or hurdles, passing through gates where ‘go/ kill’ decisions should be made. Organizations that thrive on having a ‘regime’ hold ‘fast’ to the Stage-Gate as their way to manage innovation. This rigidity of a given mindset is one of the real concerns about being totally reliant on the Stage-Gate. It works for product development that is more incremental in nature –the bread and butter of most businesses.

A really short history of the Stage-Gate first.              

Stage-Gate was developed, is registered as a trademark and certainly popularized by Robert Cooper. His first edition was published in 1986 in the early days of understanding the management of the innovation process. He has since updated with a second edition in 1993 and from this it gained its real traction as the recognized process, and established the term “Stage-Gate” clearly to manage within any product development process. His third edition in 2001 shifted the focus and became more taking the concept further on accelerating idea-to-launch. In 2011 he gave us a completely revised and updated fourth edition.  Robert Cooper reminds us that his Stage-Gate process has become the most widely used method for managing new products in industry today.

It has been suggested that this Stage-Gate process is a conceptual and operational map. Well, yes for NPD only maybe it is but today with all the other types of innovation needed to be considered by organizations it is NOT really capable of living up to this claim. I grant you can think through the process conceptually on how to manage this but I feel this grants Stage-Gate more than it really can offer. It is a stage-gate decision process for product development.

Do linear processes manage all the different types of innovation?

Organizations have become so use to thinking only product innovation they are attempting to drive ‘any’ innovation through the same system. This approach is placing so many self-inflicted wounds on the organization, often in the most painful way possible; through lost opportunities on achieving more significant growth, lost chances to fundamentally change the competitive game and ill-fitting attempts to fit innovation through this one process system.

Original fresh ideas get morphed into completely different end products that seem to become more incremental the further they have to accommodate all the jumping over these hurdles and passing through the stages and gates. It becomes the skill in trying to avoid being ‘killed off’ for often a lack of validation (often obscure)  and that famous cry of “give me proof” often of the unknown- how can you?

Stage-Gate ‘plays’ right into the hands of the bean counter, the risk reducer, the keeper of maximizing productivity, efficiency and effectiveness. Each gate, each hurdle forces the denominator down, mistakenly thinking this is reducing cost risk (often of the only true innovative part) and effective management of time will serve the organization well. This fuels the short-term protectionism we all cry about today, as well as it adds even more to the long-term detriment of mediocre innovation entering the market. We are still failing to ignite growth and continuing to disappoint customers with underwhelming offerings that still doesn’t meet their needs.

The Stage-Gate is not the panacea for managing innovation

I would argue we should stop regarding the Stage-Gate as the panacea for managing all of your innovation needs. Stage-Gate handles the incremental product cycle fairly well, but when you are on a more open innovation platform collaboration it struggles to be flexible, agile and fit the different challenges presented by the collaborating parties.

True innovation goes through such an iterative process; processes like Stage-Gate are simply not equipped to manage all of what this entails. Nor does it really pick up well on the growing impact any potential new business model innovation might signify, as it constantly wants to refer back to excepted existing practices and the structures in place and not novel or radically altering ones that can challenge the existing business model. Can you imagine something completely breakthrough or totally disruptive being forced through a Stage-Gate NPD process?

What also does happen when you have to work through separately the potential of the service innovation dimension or the myriad of other types of innovation? Too often we retrofit service instead of running this in parallel.

We have arrived, it seems to me, at a certain point where innovation is often being projected forward to a given solution and then worked back, so it can pass through the Stage-Gate system. Sometimes this is right if you spot a unique opportunity for a job-to-be-done need but we have to be more than careful of this ‘forming’ habit, it can exclude even greater insights and discoveries even here.

Recognizing limitations AND managing in new and different ways.

So we can recognize that Stage-Gate can work well for incremental and well planned out innovation but it ‘stutters’ and can ‘die’ when you need radical, new-to-the-world breakthroughs as you enter those far too many unknowns to try to run them through a system.

Whichever way you ‘wrap’ Stage-Gate it is still a linear process that has to go through justification at each stage and pass through the ‘gate’ in resolving the criteria expected, before it can go on. Irrespective of the innovation this can often load the process with bureaucracy, internal politics and tensions. You increasingly focus on preparing for these ‘gate’ meetings, losing valuable time often not on the idea and concept itself.

Invariably the questions asked to justify and validate requires much rethinking, leading too aspects of the proposal rewritten and then resubmitted, turning even more into growing time delays. This leads to escalating upwards through the gatekeepers to the senior manager, who is not fully engaged in the process, you lose even more time, he often does not have context, you lose precious opportunity, and you lose money in delays while this all gets sorted out, eventually and it goes on and on with growing conflict and tensions.

There is also a shift to ‘status and attainment’ on sitting on these reviewing committees rather than bringing real ‘value and benefit’ and often this gets confused to the detriment of the process . The process often dominates not the product concept itself. Stage-Gate might have become simply a safety first decision-making tool than an actual NPD process to help and assist.

You begin to justify the many unknowns somehow, you cater to the constant demands for proof at every step of the way, or otherwise you will never get your products out of the door.

We just end up with wicked compromises and the original idea deserves better, much better than that.  If we were honest with ourselves, we shave things off, we dilute, we radically alter what were initially great looking concepts and reduces them down to a pygmy of the original ‘wow’ concept.

Lean and rapid principles have some foundation value

I think where Dr Cooper has continued to explore in his Stage-Gate journey has been the move towards his lean and rapid principles. Those are closer to universal needs of all innovation. These are

  1. Have a clear customer focus
  2. Ensure as much front-end loaded as you can in assessment and testing
  3. Spiral development- find ways to be more iterative and greater community engagement
  4. Push for more holistic approaches of effective cross-functional teams
  5. Seek the right metrics, accountability allocation and continuous improvement
  6. Focus on building a more effective portfolio management through funnelling and appropriate resource allocation
  7. Looking to keep pushing for a flexible, adaptable, scalable and efficient process

These are useful ‘generic’ contributions to finding better solutions to having an updated innovation process, irrespective of type (of innovation). A lot about the Stage-Gate has organizing value to incorporate with this more holistic design of a process to manage all innovation ,it should certainly not be discarded but looked at with a different perspective.

What is called for, in my opinion, is to build even more on these lean and rapid principles but also to recognize and go ‘simply beyond’ the often fixating obsession of applying a product development process with decision gates that many currently have. Although it is not a bad organizing principle for business decision checkpoints, we ‘just’ need to go way beyond this to obtain the increased need for flexibility required, by considering all the different types of innovation an organization needs to consider and cater for them in some form of reviewing approach, if we can.

We need a different more agile, adaptable process that deals with innovation outside the ‘norm’ of managing incremental NPD, if we are ever going to move beyond the present, more common incremental mindset prevalent today.

The need to build and extend our capabilities and processes

We must certainly stop trying to treat all innovation projects with the same ‘Stage-Gate’ brush, squeezing it through the same process. We need to develop different ‘templates’ but have perhaps a common recognized set of decision points or organizing principles.

We certainly need to offer more autonomy to teams through a more robust Innovation Governance structure, this is for me critically important. We need to shift the mindset from ‘Go / kill’ to greater informing choices and options to consider. We need to be less reliant on data, more ready to sense, listen and make informed decisions as we go. We must make sure we capture the alignment with senior management on the strategic goals, the priorities and allocating appropriate resources according to the innovation type and challenge.

We need to allow for a greater freedom of thought, of investigating ‘breaking’ ideas, encourage explorations along the way. We need to push for more experimentation, conceptual work, design modelling so as we learn we can quantify, as we quantify we gain increasing identification and organization alignment. We know much of innovation is unstable, throwing out fluid information that is often contradictory; we need to capture these differences in more flexible, intuitive ways.

This calls for a lot more agility in thinking, in accepting often erratic behaviours to see if we can suddenly leap ahead. Hurdles, keeping to prescribed steps and trying to pass through decision gates needs some very fluid approaches but can still be in disciplined, informed ways but with totally different mindsets of searching for ‘better’ innovation outcomes.

The innovation system required today needs to be more flexible, adaptive, agile and scalable.

The system should not dictate innovation, it has to be more adapted to our different innovation needs and their circumstances so we can maximise innovation’s potential to lead growth.

We need to recognize that a breakthrough concept, a disruptive game changer, a new business model proposition or a multiple type innovation (product, service and BM) need different approaches, all much faster to be developed but with increasing levels of uncertainties being built into the ‘system’ not just taken out because we are uncomfortable with this or unsure how to handle this. Simply ask others to help you, there is no shame in this.

There have been significant changes in our understanding of innovation since Stage-Gate was first introduced. In the process, the culture required, the ways to manage, to align and to develop have all evolved. We must stop being a slave to the innovation system in place, often left over through legacies in the system and find ways to go beyond the often rigid, linear Stage-Gate process that organizations are locked into.

Innovation is complex and adaptive

Innovation should be understood as a system that will always have non-linear behaviours, it cannot be stage-managed in isolated events. It is complex and adaptive and the more we recognize the power of unpredictability, the significant variations, need for constant interactions and the careful selection of those ideas that need to be carried forward, the closer we might get to finding a more universally accepted innovation system.

Let’s stop trying to force innovation by jumping hurdles and closing gates that often do not apply, so we end up with self-inflicted wounds because we were on the wrong track.

An Ideal Innovation Client Engagement Process

Some years back I came across a visual suggestion of what a client engagement should entail. I had been for years ‘casting around’ looking for something that gives the process a good structure and clarity. So I reworked it for my ‘ideal’ way to approach the client engagement process needed for my innovation work and made it into this visual.

Take a look below as my preferred way to approach innovation in any engagement.

The critical discovery phase I regard as vital

For me, the more you invest in the pre-contribution, the discovery phase, the higher likelihood of better results that meets both the ‘known’ and ‘unseen’ innovation issues. The problem or dilemma we all have engaging with clients is that ‘until the clock is running’ and we have a signed commitment, these investments in scoping are often (perhaps always) understated by the client, misunderstood by the advisor and no fees or solutions have been generated.

Nobody likes that but it is often a mistaken false economy.

Partly the client can  get too close to the (immediate) problem and can’t “see the forest for the trees,”often never recognizing the intangibles that make up so much of innovation. Also partly they don’t have the complete picture or don’t invest enough time themselves in thinking this through thoroughly enough before they seek external help.

On the advisory side, OK, we all have gone though (sometimes painfully) adjustments in scope but often those final proposals made without a proper discovery become a real sore spot by others within the organization, let alone within the clients. Also not knowing before you ‘jump’ in does not help build relationships or deliver the results expected

Also as an example, those with less vested interest in the result but only are responsible for the corporate procurement part, often like to judge the milestones against payments and apply sometimes their restricted knowledge against this suddenly ‘rigid’ (cast in stone) proposal, allowing for little flexibility.

The better the discovery phase, where ‘skin’ on both sides is in the frame, the better. You reduce conflicts and loss of time in any renegotiation and give more time to the project, not in justifying changes and the reason for increasing costs.

The argument for this pre-investment is more relevant for innovation work

My argument to overcome this is making a request, often as a ‘must have,’ of getting some client investment in Dollars or Euro’s for investing in a more robust “discovery” phase as shown below, in its two distinct parts. This becomes especially important for innovation as it can reveal much unseen or poorly recognized as that essential needed value to be the real difference in successful innovation or not. It can also offer real value to the client for evaluating alternatives and (revised) agenda setting for the  work going forward on a more complete view and clearer mandate of scoped work.

Agility’s ideal approach to the innovation client engagement process

Then and only then, you generate the scoping document and the clients attention, engagement, better identification of the places for return on investment and general satisfaction, rises significantly.

This process makes sense to me

Hopefully it does for you as well? As for the clients, well realistically it is sometimes a tough sell and you run the risk he takes the discovery and goes elsewhere. This would certainly not be the first time this happens, irrespective, unless you have some form of lock-in and I find MOU’s always should incorporate a clear mutuality in them to reduce this risk and allow for that greater horse power of combined intellectual property emerging from this discovery investment.

So it looks on first view complicated perhaps?

I think as you explore the stages of Discovery, Generation, Conversion, Diffusion & Acceptance its steps offer a clear client engagement roadmap and expectations can be managed through this. I feel it raises the confidence within the relationship.

Sadly I’ve lost the original one somewhere deep in my files, when I find it I’ll attribute this accordingly, as it gave much of the structure shown above and it just resonated with me. Sometimes switching computers messes the essential brain source!

A call for a more open collaborative innovation consulting framework

We are coming up to nearly 10 years since Dr Henry Chesbrough wrote his first book on open innovation as the necessary business imperative.  There has certainly been considerable progress in many business organizations to embrace this open collaborative principle.

“Open innovation is a paradigm that assumes that firms can and should use external ideas as well as their own internal ideas, and explore both internal and external paths to market. Firms need to look to advance their technology, resources, their knowledge and understanding through innovating with partners by sharing risk and sharing reward”.

Isn’t it strange that the very consultants expounding ‘open’ for innovation are as closed as ever? Why is this?

I would argue that the consulting industry specializing in providing innovation services is its own worst enemy today, by not being more open themselves. It is actually failing to recognize that this is inhibiting their own long-term prospects. Nearly all within the innovation consulting industry seem to be resolutely staying very internally driven, self- promoting, still trying to convey the story of their mastery, when clearly this is so painfully lacking from the results in growth by many of their clients from their existing innovation activities.

Due to this lack of openness they are failing their clients by not offering them leading and emerging practice advice. Yet the client is increasingly requiring more complete or holistic solutions, not from a ‘piecemeal of innovation offerings’ they are presently receiving. These separate pieces currently being offered by one group of consultants often don’t dovetail into a complete innovation system because they are supplemented by a variety of different service providers, all having their own ‘pet’ approaches, methodologies, techniques and tools.

Why is it when many clients who are actively working on increasingly open complex innovation challenges and working through a more diverse range of collaborative platform solutions, that the innovation consultants working alongside them, are still such a different story of being closed up? Consultants seem so reluctant to open themselves up and embrace this more open collaborative culture and gain from embracing that essential more divergent thinking that innovation often calls for by the use of external collaboration.

Innovation consulting is a fragmented consulting industry unable to achieve scale to match client needs.

Today innovation management advisory firms are mostly small, loosely organized, some highly specialised, that have a flourishing complexity of activity but often spend inordinate time reinventing many aspects of innovation management that are not necessary and serve little value for the client.

While client’s requirements for structuring innovation are often claimed as unique and distinctive, they are in many cases, actually not. What they really want is to acquire is a common, repeatable, scalable innovation structure that allows them to manage their distinct innovations on a consistent basis. The understanding of the innovation process is basically common or should be. Until this point of difference between what a client’s wants is a common, scalable process and yet the providers want to offer, their own versions, innovation in general will face many disadvantages in not advancing, as it is not formed around a basic set of common standards.

Consultants are ignoring the richer places of competitive advantage or doing a poorer job of exploring variability, diversity and within the organizations building capability as it is people who offer the real value within innovation. Managing the intangibles is certainly far harder and messy but it is the ‘sweet spot’ of innovation, where the multiplying of the degrees of connectivity, interactivity and sharing, offers the new innovation equation point.

Consultants are far too cautious for their own good

Consulting firms on the other hand are moving far too cautiously to any form of collaborative engagement; it is far too ad hoc. Wherever possible consultants want to manage as much as possible internally to ‘keep’ the fees generated inside. This is not a recipe for building lasting relationships that have mutual value in growing understanding. They stay’ in-breed’ and are not reflecting the commonly held view today, “that all knowledge does not reside within your own walls”; they still reluctantly hang on to the closed system of  ‘invented only inside here’.

How do we resolve this? Should we? Are Disruptive Forces Around?

Combining all these islands of innovation knowledge into some form of combined force would be a healthy step. Innovation is consistently ranked among the top three strategic imperatives by business leaders yet it is not recognized by consultants with the same strategic commitment.

Of course there are some big challenges facing innovation consultants today:

  1. How do you break out and resolve this fragmenting industry of many niche consulting players certainly not matching the clients’ ideal profile of global span and support?
  2. The inability to offer broad innovation experience or depth in capabilities is another negative working against many consulting firms.
  3. Forward thinking innovation centres within consulting are rare so there is little fresh ‘knowledge stock’ being added to tackle increasing complex issues around innovation.
  4. Sophistication & specialization is highly sought after but expensive to keep around. And having this expertise sitting on the bench within one consulting company as it is regarded more as a cost liability and not as a valuable asset to leverage.
  5. Strategic understanding in fast changing, complex markets and organizations is extremely hard for outsiders (consultants) to grasp in the detail required to be able to contribute into clients with the impact often justified by the fees demanded.
  6. Limited experiments are currently being undertaken in the innovation consulting practices, yet clients are actually crying out for this, it is a massive unmet need or job-to-be-done.
  7. Lastly consultant partners should change their remuneration models that drive their consulting business to actively seek more ‘win-win’ solutions in collaborative partnerships.

A bolder, more open collaborative model is required.

  1. Consultant companies should become the host and potential ‘orchestrator’ of platforms for the ‘best’ to gather and collaborate and offer this to clients as a real value benefit.
  2. Clients are learning how to collaborate and to openly network.  So shouldn’t consultants embrace this and seek out the places of complimentary knowledge by recognizing they can only, as they stand today, make a limited contribution and cannot claim ‘total solution expertise’ without active collaborations themselves.
  3. There are growing sources of advice alternative– clients are recognizing this and seeking it out so why not the consultant through being the platform provider for this ‘clearing house’ in diversity, thinking and understanding.
  4. The appeal of bringing together experts that can come together and work on specific complex problems and then disperse has great value for all concerned providing it has a retaining clause and gives all involved their own specific returns on their business model.
  5. The need today is to have real access to great quality thinking and this does not reside within the walls of one consulting firm. However large a practice of consultants they are repeating the same solution set, mindlessly pulling down their ‘best’ practice from their internal knowledge and then, attempting to apply this to someone else’s unique circumstances, failing to evaluate this sufficiently and eventually failing the client.
  6. Consulting practices need to address rework. Much of the profit comes in reworking what has previously been delivered, selling it time and again. This would need changing but is not so radical a change as first thought. It is extracting the repeatable parts intelligently, evaluating the points of difference in a more forensic way from ‘available’ expertise.

A revolution for innovation consulting comes from opening up.

The resolution or (salvation) of innovation consulting is to build transparent networks of expertise, brought together on platforms provided by the nominated host or consultant, so clients see and value the access to broader, best available expertise that is working through their own, often unique challenges, not being felt as ‘cookie cutting’ recipients.

Complexity, uniqueness and expertise need to be addressed in more customized ways and that challenges the existing global consulting model of maximizing repeatability. Applying the best in knowledge application for innovation consulting services offers the client a real value for accelerating growth and job creation based on more radical and breakthrough thinking.

So what I propose requires us to think through a new model that can combine the best available expertise on a given client platform, hosted and orchestrated by the innovation consulting firm, pulling together the best advisory and thought leadership around to solve unique client challenges. We need to alter our ways to achieve this.

What will it take to shift the existing practices? Possibly clients demands better support or simply keep voting with their feet by investing in their own experimental learning themselves, as they don’t feel the consulting advice available gives them much they don’t or can’t find out themselves.

The alternative is someone sensing the opportunity to disrupt the existing consulting model and bold enough to make that fist mover advantage and take innovation consulting up a level or two of engagement. Actively working on finding ways in their value offer, so as to position themselves with clients as a critical ‘must have’ for working alongside them on their current and future problems in richer collaborative ways. They share the joint objective of achieving a higher level of innovation growth and return that the client can’t achieve in their current approaches to innovation management.

Making those increasing connections

I am always looking for innovations connections. This last week I’ve been working around some different themes that grew in interest the more I investigated them, both in their importance and messages.

I’m undertaking a rather exciting approach to describing innovation, within a collaboration venture, that gets more exhilarating and inspiring as we explore, clarify and document. Regretfully I can’t share this here at present but I certainly will when it gets to that point of ‘release’.

Some of the different areas or themes I’ve been investigating have flowed from one set of enquiries that have taken me into another and then yet another. These simply get my innovation juices flowing and really are allowing me to make so many new connections. Here is just a few of these in this last week that have emerged from some of my researching that provide a host of thoughts:

Leaders & Laggards

In this group of investigations I started in trying to gain a better perspective of the discussion of leaders and laggards and what differentiates them. Timely to these investigations has been some recent studies by Capgemini Consulting and IESE Business School with a recent leadership study “Managing Innovation: An Insider’s Perspective”

I’d suggest the slideshare presentation is well worth taking some time out to view and understand as it covers views from those leading and managing innovation in their organizations and how they think about the innovation function http://tinyurl.com/c9o7cuw

Then I have been reminded of the continued great work of Chris Zook and James Allen, both partners at the consulting firm, Bain & Company, in their article “The Great Repeatable Business Model” http://tinyurl.com/d483eqq

The message of differentiation and the level of focus on clear specific areas of innovation and its management makes a real difference for separating leaders and laggards.

Those that endure and adapt

In the article by Chris Zook and James Allen they speak of differentiation that tends to wear with age and often the real problem is internal. It is complexity and in this a complex organization forgets what it is good at, it proliferates, it losses key people, it moves away from its core business, it losses focus and it begins to have that ‘great disconnect’ between upper management and the front-line employees. It seems to me the organization just simply begins to break down and lags even more in performance and returns.

They go on and suggest a lack of consistency begins to kill the economies of scale and equally retards the organizations ability to learn that adds up to them struggling with increasing complexity and fading differentiation.

I was looking for some of the enduring points of what needs to be put into place. This was offered “When a company internalizes a set of principles, the message no longer gets garbled. A shared point of view, core beliefs, and a common vocabulary improve everyone’s ability to communicate and foster self-organization.” They go on and suggest “this increases the speed of business, you capture more growth opportunities ahead of competitors and accomplish more per unit of time.”

I also liked one comment they made that “up and down the organization, information slows and grows distorted.” I would suggest without a clear knowledge capturing and dispersing structure for information this is not the only thing that gets distorted, often it is the real values of the innovation activities themselves. Those products or concepts that emerge eventually as completely out of shape from what was intended initially, due to this complexity within the decision and approval process, become totally different before something eventually gets ‘out of the door’ in finished design. So much gets lost or ‘distorted’ along the way and the end result becomes far too compromised on the customer need it was intended to resolve.

Innovation effort may not be worth it

Equally I always enjoy the thinking of Vijay Govindarajan and in a recent article along with Manish Tangri entitled “Why that innovation effort may not be worth it” http://tinyurl.com/847ah4c they discuss two key factors of motivation and competence and how you can put your organization and its leaders to the test.

They ask two great questions “How hungry are you for innovation?” and “Is the initiative set up for success”. I did like the point made of “a leader provides direction under ambiguity” and how many of our leaders would be truly comfortable in doing this?

Looping back we need to ask  how far are you from your core?

We come back to increasing complexity, straying from our core, communicating mixed messages, showing a clear lack of decisiveness.  If your innovation message is not sharp and convincing up and down your organization, or even understood by your customers you eventually lose out, you become even more of a laggard and allow others to slip away into clear leaders.

Part of our need in organizations is to stop breaking down the parts, layering on that increased complexity. We should be designing the innovation framework and system to clarify and inspire more. We need to reinforce more on where the key differentiation points are. We need to be sharper in our understanding of true differentiation and stick to this.

The key here is the real need to simplify and focus down within organizations.  Also we need to seek consistency wherever we can, in communications, in our strategic intent and in our dialogues to clarify. We tend to do the opposite, we make it too complex and this is killing innovation, killing growth, killing organizations. Above all we need to work up and down the organization with some clear, compelling messages that give clarity, allows for the necessary linkages and make sure the parts reinforce one another.

The last part of my walkabout in my research was “Creative Destruction”.

I recently wrote a blog “The Innovating Era: Creative Destruction or Destructive Creation?” http://tinyurl.com/dyy964s and in particular the destructive creation part and how this was destroying more than what was coming in its place. I finished with this comment: “All I hope is it will let us make sure we put the emphasis back far more on the “creative” innovation part and not the ‘destructive’ nature we have moved towards recently”.

Chris Zook has just written on this “When Creative Destruction Destroys More than it Creates” in the last week in an HBR blog http://tinyurl.com/7pe8qvf and makes an important point (in my mind) that “the extinction of once-great innovators is less often caused by technological or market evolution, and more often by self-inflicted wounds and slow cycles of decision and adaptation.”

He brings us back to the point “it is internal complexity that turns companies into lumbering dinosaurs.” The suggestion is, if we can’t keep ourselves clear on simplicity and focus and really tackle complexity as this is the “silent killer of profitable growth,” and “the greatest inhibitor of adaptability”.

Leading the way does falls to leaders.

My last extraction was from another lead and laggard viewpoint:  “A leader doesn’t tell people what to do. A leader helps people understand what needs to be done and brings the people and resources together to make it happen”

We need to focus on our greatest strengths but to do this we do need to understand them. It seems to me, so many leaders surprisingly don’t have a clue on how and where innovation can contribute in lasting differentiation, where the growth should be coming from or how to galvanise the organization to be simply on the same page to make sure it can happen.

We need some consistency in how we set about innovation.  Sometimes what simply scares me is that this basic task is often missed off the leaders agenda to actually make sure it is happening, often because they has not been fully involved or understood their role in this.