Innovation is like a Rainbow

Posted on April 15, 2013 by

Last week I was driving home after a round trip of 700 kilometres and as I got caught up in some evening traffic, the sun and the rain played that magical trick of offering up a rainbow to the ones in that right position to see it. There was the actual end of a rainbow for us to see and it triggered two thoughts – the mythical pot of gold if you actually get at the rainbows end, and then my later thought “innovation is actually like a rainbow in so many ways”

Rainbow Innovation

The Rainbow Effect

They tell us you can never reach the end of the rainbow because the rainbow is a little like an optical illusion. The rainbow is formed because the actual raindrops act like thousands of little prisms that refract and reflect the sunlight towards you. So when the sun combines and those millions of raindrops have this light hitting them and split the colours for your eyes to see the effect.

Even when you change your position, the angles change and you see the rainbow at new angles of these little prisms. The ability to see the rainbow is that you have to be always be that certain distance away, even as you try to move towards the rainbow, it stays that distance away from you, so you can never get to the end of that rainbow. I just think for many of us, that innovation is often just like that! So it got me thinking.

Innovation is like a rainbow

The rainbow never touches the ground and there is no end to it, it sort of dissipates and that also sounds just like innovation as well, we often lose the focus or the original intent in the final product. Innovation, as we know,  is made up of a lot of activities, a rainbow of different often colourful activities, that need to be combined together for the end result but they do need the right conditions to produce this.  Yet to gain from “this rainbow effect” of lots of ideas, like the rainbow you need to narrow the funnel of precipitation to get a desired result. Sounds a little like a narrowing innovation funnel or staying very focused.

Funnily enough, like the rainbow, you think you have arrived at the end but you have actually not, in your innovation activities, to get to that pot of gold. Unfortunately the “beneficial effect” has seemingly moved on or simply disappeared so you have to continue the search for your innovation rainbow elsewhere.  The one you originally saw was a while ago, conditions so quickly change and you just have to keep on adding to what you have achieved and keep searching for the perfect innovation end that seems never to come.

Why, simply because you just can’t get to the end, it is always changing, something takes over, the world never stays the same and always, yes always, depending on the right conditions, you just need to keep chasing as you see a new end but it just keeps that tantalizing distance away from you. Just like the rainbow, it fascinates you, it keeps you involved and moving towards a clear target.

Can we ever complete the full circle required from innovation?

As rainbows are made in the sky they actually never touch the ground, you think they do but they don’t. Rainbows are actually complete circles but you never see the whole one as horizons seem to get in the way. Again I think innovation has this in common. You never can achieve the “full holistic” effect of innovation we are often arguing for, as absolutely necessary, (for the pot of gold perhaps) because something always gets in the way.

What we can only achieve is to urge people to rise above what they are working upon so they can appreciate the arc of innovation better, like the rainbow. The higher we can rise up, the more of the circle we can see and attempt to make all the necessary connecting points.

The important point of appreciating innovation is that we all value the innovation effects differently. It is like appreciating a rainbow, when we stand in different positions we see often different effects of a rainbow, just like for innovation – no two pairs of eyes can see the same, each observer can see a slightly different rainbow, even if they are standing next to you as what makes ‘it’ up,  as it is always in constant motion. The effect is different for each of us.  It constantly changes, just the same as innovation – it is unique in its own way to the individual that ‘sees it’, yet we can see the rainbow effect in its own unique way, similar but different for each person but it is the same rainbow or is it?

Observing and absorbing needs a ‘prism effect’ to be dispersed

I also think innovation is made up of a broad spectrum of refractions, the passing of light (insights) from one to another and in our reflections in its activities and impact, just like rainbows. Reflective prisms are used to reflect light, in order to flip, invert, rotate, deviate or displace the (existing) light beam. This seems a little bit like brainstorm techniques.

Innovation needs to work along the absorptive capacity process where we acquire, assimilate, transform and exploit, where the focus is on the “dispersing” and “adapting” insights into future impact outcomes that then accelerate innovation. Is this perhaps like a rainbow? When a shaft of sunlight enters a drop of water, a part does not pass through it, it is reflected and then emerges back from the side it entered and this process, repeated over many times becomes a ‘primary mechanism’ that transforms into something different and you begin to exploit its effect, you take advantage of “the innovation rainbow effect.”

You suddenly see everything in clear, new colours. Those magical moments when you have clarity and like innovation the effect suddenly takes hold and you are amazed at the unexpected turn in events.  From this point on, you ‘push’ to change the existing for something new and hopefully preferred, something that you believe gives perhaps a greater value than the existing.

Is innovation an illusion – both deceptive and never-ending?

So we will never reach the rainbows end, we will ever reach innovations end?  Or will it always stay at a ‘respectable’ distance, just like the rainbow where innovation is also an optical illusion I wonder? Just out of reach. Just like our rainbow, it will always be a certain distance away from you and as the conditions change, you lose sight of the innovation rainbow. You can either seek it out or wait for those conditions again, perhaps like innovation, those conditions are hard to sustain, we need to keep moving, waiting for the right conditions again to get the benefit. Innovation needs the right conditions to come together, so does a rainbow.

Creating the right conditions and being in the right place is more than luck

Creating those conditions is both made up of luck, being in the right place at the right time but also knowing what needs to be in place to achieve the “effect”. A rainbow needs light, water and air to produce the right atmosphere and conditions. Don’t we start looking for a rainbow when it rains and the sun shines together? Well, innovation is just the same, we need certain conditions like culture, processes, directional energy and equally all within the right environment to allow it to happen. We look for these as well.

Just remember, like the rainbow there is no end to it, it just needs the right conditions. The pot of gold, well it is at the end, can’t you see it? I can – it’s all been told.

“At the end of a rainbow

You’ll find a pot of gold

At the end of the story

You’ll find it’s all been told”

          Nat King Coles song “At the end of a rainbow”

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Innovation Job Chasing – A Race Needed To Win

Posted on April 10, 2013 by

There are times when we all have to “up our game”. We are entering one of those periods where we have to relearn how to compete, how to win. The world is in the throes of some dramatic changes and the innovation gloves have to come off. Innovation capacity in many countries needs a new, more robust solution.

I wrote about “The present jobless innovation era we face” raising up the theory that Professor Christensen points towards, that we are working on the wrong types of innovation to create jobs. We are measuring our businesses in financial metrics that were more designed for periods of scarce money supply and not what most of our companies have today, cash in abundance, sitting on their books and a world ‘awash’ of cheap money. Professor Christensen calls this theory of his “the Capitalists Dilemma.”

Risk-aversion is dominating our Western thinking

The present situation is that we are in a period of risk-aversion where the innovation ‘bets’ are more incremental, more short-term pushing for greater utilization of existing assets that are designated by Professor Christensen as “sustaining or efficiency” innovations. He believes we need more “empowering innovation” – those that create jobs and invest capital across longer-term horizons than today.

In Professor Christensen’s original article he had published in the New York Times in November 2012 he believe the solutions are complicated and he has looked to “seed the discussion”. Firstly he rightly points out that the “challenge is not framed properly” as he suggests “even if there is robust growth there won’t be (necessary) job creation”. He argues Governments can’t dictate. I believe there is continued risk of even more exit of the migratory capital to lower cost countries and projects where the conditions seem more attractive unless the ‘dynamics’ surrounding the need for innovation plus jobs can change significantly.

We certainly need “innovation + jobs” and not exported!

In my view and to a large view until we focus on all the factors that need to promote innovation plus jobs, our economies in the West will never recover that sustaining ability. A place where capital is deeply invested again, so  it provides growth ‘within our borders’  that can, over time, allow us to return to prosperity.

We need these “sustaining and efficiency innovations” as they liberate capital but it is in providing the right conditions for this capital ,plus all the idle cash today that is simply sitting on businesses books, to be moved towards this “empowering innovation” we need for job creation.

Professor Christensen ‘floats’ three places to start in making changes within our economic  systems to allow innovation activity to break free and become job creators. To change the types of metrics we use, to move these into more people orientated ones. Secondly, to change the capital regimes that shift the thinking on investment incentives, where longer term productive investments held can make that horizon shift due to these tax incentives put into place for investing in longer term, bigger budget innovation. Thirdly is changing the politics where consumption has dominated into different “empowering” decisions. I’ll come back to this another time. My feeling is, as these stand they are little too “apple pie” for me – sweet, initially satisfying but not enough.

Getting your jacket off

Let’s firstly go where the jackets have already come off with a far more substantial set of proposals to “win” this innovation race. Rob Atkinson of the Information Technology and Innovation Foundation (ITIF), a Washington DC-based technology policy think tank along with Stephen Ezell have explored this innovation dilemma in their book “Innovation Economics- the race for global advantage” (released in September 2012) and offer a web site on this whole area www.globalinnovationrace.com

Within the book, the web site and ITIF they outline the arguments for significant innovation change and provide many sensible solutions to win the innovation race. They have put these under the eight “Is” needed and cover each one in a chapter. These are under the following (organizing) headings:

  1. Inspiration. Setting Ambitious Goals
  2. Intention: Make innovation-based competitiveness a National Priority
  3. Insight: Improving understanding of innovation performance
  4. Incentives: Encouraging innovation, production and jobs IN the United States
  5. Investment: More public funding for Innovation and Productivity
  6. Institutional Innovation: Doing new things in new ways
  7. Information Technology Transformation: broaden the IT transformation base
  8. International Framework for Innovation: Everyone plays by the same rules.

Key digital platform technologies are places for real job creation also

They (ITIF) also suggest there are at least six key digital platform technologies today that need significant longer-term capital investment. These are broadband- the critical enabler, next-generation wireless communications that speeds it all up, health IT for easier access to a comprehensive view of patients, intelligent transportation systems for real-time intelligence, a smart electric grid to ‘sense’ location of power, contactless mobile payments to use their cell (or mobile) to pay across society. They quiet rightly suggest without Government help to catalyse deployment of these platforms progress will be slow.

Then we have “Innovation Economics” as a growing doctrine

The book and Wikipedia I would think have the same source but the Wikipedia source does provide a terrific outline of this growing doctrine that is suggested should reformulate conventional economics theory so that knowledge, technology, entrepreneurship and innovation become positioned at the centre of a model, and not independent forces trying to influence it.

This Wikipedia source goes through historical origins, offers the innovation doctrine as a more advanced theory, provides evidence and the geography associated with many successful innovation efforts, that are deliberate concerted efforts by combining markets, institution and policy-makers and use the geographical space. This then finishes up with worldwide examples and countless references.

Competitiveness and Innovative Capacity

In January 2012 a report came out from the U.S Department of Commerce in association with the National Economic Council entitled “U.S. Competitiveness and Innovative Capacity. This report may be a long read of 160 pages but lays out many ways of “Moving Forward” across a well laid out set of the parts that make up the innovation context

These steps suggested include 1) rising to the challenge, 2) the keys to innovation, competitiveness and jobs, 3) Federal support for research and development, 4)Educating our work force, 5) Infrastructure for the 21st Century, 6) Revitalizing Manufacturing, 7) The Private Sector as the Engine of Innovation to offer a fairy comprehensive evaluation of the issues, challenges and investment opportunities to bring about a more “empowering innovation”.

Again within this report in their “Moving Forward” suggestion lies ten recommendations or factors that are suggested as ways for the United States (or even Europe) to regain a pre-eminent capacity within innovation.

It is a race each country engaged in innovation activity will want to win as this building of innovation capacity is the bedrock of economic growth and future prosperity. Otherwise, if we fail to grab this fully, we will face continued decline, short-term disruption and long-term stagnation.

Jobs can be created; our skills need adapting and refining

Of course everyone will continue to need a basic education or knowledge but they will need sharpening the skills and their motivation more. When we lack motivation, we lack that curiosity that becomes so important to innovation. The intrinsic parts of being curious, persistent and willing to take risks needs to be instilled far more into our education and thinking.

The call for education reform is gathering but we need to be careful in the rush to ‘reform’ we don’t “throw the baby out with the bath water” in our haste.

I was reading and storing away for future reference an article “What 100 experts think about the future of learning” that again places learning into its multiple parts: of using technology, sharing education openly and differently, where creativity and innovation fit to foster a new spirit, the internet and new media and its potential impact on teaching and learning, leadership, educational technology , the brain and psychology, technology education, different teaching methods and our institutions. The list does provide a fairly comprehensive view for the impact of learning in the new ways we need to move towards.

Need a job? Invent It.

Thomas L Friedman offered a view in a New York article piece “Need a job? Invent it” suggesting these are dangerous times where high-wage, middle-skilled jobs – those sustaining our past economies – are in the past. These have become only high-wage, high-skilled to recalibrate this middle-class and their dependency.

The article further explores the view of Tony Wagner, a Harvard education specialist, that we need to send out every child as “innovation ready”, ready to add value to whatever they do. Wagner argues “the capacity to innovate – the ability to solve problems creatively, or bring new possibilities to life – needs these skills of critical thinking, communication and collaboration and are far more important to meet today’s challenges than academic knowledge”.

So who is doing this right out there in the world? “Finland is one of the most innovative economies in the world,” Wagner said, “and it is the only country where students leave high school ‘innovation-ready.’  They learn concepts and creativity more than facts, and have a choice of many electives.

Who is putting in place those stronger foundations within this innovation race?

I finish here on the competition and it is everywhere. Not just in a region of one country, or on one continent but across the world. The race is truly on, on who organises the relevant conditions to allow innovation to thrive, to offer the place where “empowering innovation” and where jobs are part of the equation.

There are examples in Europe- not just in Finland, Norway, Sweden but in Switzerland, parts of Germany, regions of Italy, Spain, France, Ireland and the UK. They benefit but equally suffer from centrally driven policies ‘handed down from Brussels at the EU level or constrained in “restrictive” thinking at National level. Many of these “selected” places are simply “pockets of innovation” and lack this cohesiveness and coordination to really accelerate innovation into far more “empowering”to benefit society as a whole.

The BRICS of Brazil, Russia, India, China and South Africa are the emerging group are all developing or newly industrialised countries, distinguished by their large, fast-growing economies. These are the emerging new superpowers where they are experimenting but laying in the necessary building blocks to support and accelerate innovation. They are sucking in the capital and provide the horsepower in people, both those that have gained from a focus in high skilled areas and those with basic education. These combine in that drive to move up the social scale. Ambition is a highly motivating force and those within the BRICS have it. They are searching for advancing their global innovation advantage and know what it means to them personally and collectively.

Coming back to Professor Christensen he suggests the Chinese and Taiwanese in one interview. “Because they measured return on invested capital, every semiconductor company in the U.S. except Intel decided to outsource their microchip production. All that production went to Taiwan. Morris Chang [who pioneered the $28 billion semiconductor foundry industry] now owns half the chip production in the world”. When Professor Christensen asked him why he wanted chips on his balance sheet, he said, “Because I measure profitability in cash, not ratios.” I don’t see why American companies can’t think that way.”

Technology Convergence – What’s your plan?

Lastly in our lightening round-up of emerging innovation power spots, one that we all really need to take seriously, South Korea. This came from Rohit Talwar, CEO of Fast Future under Technology Convergence – What’s your Plan?

I leave it in its entirety, as it states so clearly the organizing power of a country that is determined to win a larger part of the innovation race and is intent to achieve it:

“I have just returned from South Korea where I was delivering a keynote speech to a cross-industry forum on how to prepare for and benefit from the opportunities arising from industry convergence. South Korea has made a major strategic commitment starting with government and running through the economy to be a leader in exploiting the potential opportunities arising from the convergence of industries made possible by advances in a range of disciplines.

These include information and communications technology, biological and genetic sciences, energy and environmental sciences, cognitive science, materials science and nanotechnology.  From environmental monitoring, smart cars, and intelligent grids through to adaptive bio-engineered materials and clothing-embedded wearable sensor device that monitor our health on a continuous basis – the potential is vast.

What struck me about the situation in Korea was how the opportunity is being viewed as a central component of the long-term future of Korea’s economy and how this is manifested in practice. Alongside a national plan, a government sponsored association has been established to drive and facilitate cross-industry collaboration to achieve convergence. In addition to various government-led support initiatives, a range of conferences are being created to help every major sector of the economy understand, explore, act on and realise the potential arising out of convergence.

I am fortunate to get the opportunity to visit 20-25 countries a year across all six continents and get to study and see a lot of what is happening to create tomorrow’s economy. Whilst my perspective is by no means complete, I am not aware of any country where such a systematic and rigorous approach is being taken to driving industry convergence.

Those who study Korea know that this approach is nothing new for them – long term research and strategic planning are acknowledged to have played a major role in the evolution of its knowledge economy and rise of Korea and its technology brands on the global stage. Coming from the UK, where it seems that long-term thinking and national policy are now long-lost relatives, I wonder why it is that so few countries are willing to consider – or capable of taking – such a strategic approach.”

To sum up our need for Innovation Job Chasing

Until we see a change that indicate a longer-term view of profitability and start measuring innovation differently we are stuck far more in the present jobless innovation era I outlined in my last article

Yes, we do have a “Capitalist Dilemma” but it runs deep in its fault lines and its many weaknesses nicely highlighted by Professor Christensen but for me, any current dilemma needs deeper evaluation today, not in 12 or 18 months’ time.  We need to look far more boldly at the Innovation Solutions and the economics and knowledge creation within this. In all real honesty, it  is urgent and vital for each countries race for global advantage and future prosperity we become organized and see that “empowering innovation” and job-creation become more central in our thoughts and future decisions.

Can we really overcome the barriers to innovation we have, as each of our developed countries are so mired in old style legacies. We need ones that can still take making profit into the equation but in different ways to ‘release’ capital funding that does bring jobs fair and square back into the innovation solution we actually need, to solve growing societal challenges? Ones that seek collaboration across all sectors of society, who recognize much needs real change.

These need long-term investments and all  the relevant parties working on solutions. At present far too many are playing the waiting game and that has to change. It does seem many are also simply “re-arranging the deck chairs on the Titanic” who will be overtaken by events and not providing real solutions of a current problem.

Graham and Cathryn Quote

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The Present Jobless Innovation Era We Face

Posted on April 8, 2013 by

Over the last few months I have kept going back and forth on Professor Clayton Christensen’s paradox he has named “The Capitalist’s Dilemma.” This ‘hit the world’ when he wrote a piece in the New York Times last November, 2012. I gather this has been one of his best, if not his best read article ever.

As I’m sure you are aware Professor Christensen must be regarded as if not the top, then one of the top experts, on innovation. For me he sits at the top, so when he explores a theory, you stop to think about what he is trying to explain. It takes some of us mere mortal awhile to grasp and relate to these ideas and theories.

Theories into solutions sometimes is a long wait for wrong reasons

Firstly an aside, I need to get this off my chest. Although I suspect a book will eventually emerge, perhaps only next year 2014, far too often this is a little later than preferred or when really needed. The ‘currency’ or present day relevance often suffers from this parallel world of academics, moving on a much slower level. They are still working within the publishing strictures and structures where a book has to be firstly written, reworked, proofed by editors, printed, bounded and distributed.

As you might guess here, I just wish some of these breaking theories that emerge from the academics could be sped up, they are seemingly just caught up in the dogma of rigour, validation and peer review. Weighed down in this legacy they often fail to provide the valuable insights that can alter the present day where the theory or dilemma has arisen. That valuable thinking to address the very problem we need a solution too is today not having even further debate after a book comes out, sometime in the future. We need to begin to travel the road, not just survey it!

Actually it is rather ironic in one of Professor Christensen’s own theories, the disruption theory, that this is one of the real challenges within the publishing industry,  of being “disrupted,” as they fail to deliver in this faster world in the new alternative mediums many are looking for,  that he of all people chooses the old slower avenue of a printed book. Still he chooses to use this medium, such a shame when he expands on the very theories that explain much of what is presently going on today.

The world has sped up and I would urge Professor Christensen to get out of one of the very traps he has previously identified, and explains so well to others, for himself.  I would suggest his insights and suggested solutions are applicable to today’s problems and need exploring now. Can we afford to wait?

So what makes “the Capitalists Dilemma” so relevant today?

The basic concern today in most developed economies is the lack of real growth and the worrying concerns that each capital stimulus round seemingly does not offer that number of new jobs you would expect.  Old ones are being constantly being stripped away at a much faster rate. We are seemingly caught in a broad jobless economic recovery.

At the heart of this dilemma seems to lay the issues of the type of innovation being employed, the way we measure profitability, where this capital is being invested to offer increased returns and the lack of political and leadership will, or understanding, to change this.

Again when you read the article Professor Christensen talks of a doctrine of New Finance, taught over recent years by him and countless others in Academia, of failing to catch up with the new realities and teaching theories we need to operate in a changing world. One of those is the need is to ‘account’ more in creating new jobs and people (gainfully) employed do not seem to be as much within any capital equation. Our new norm is certainly bringing increasing financial returns but without this job creation.

We seem to be faced with focusing on jobless innovation outcomes that are measured by magnifying each dollar invested by the classic ratios of RONA (return on net assets), ROCE (return on capital employed) and I.R.R (internal rate of return), used more when capital was scarce and costly so you husband resources.

Today capital is abundant and cheap – no, really!

Today capital is abundant and cheap, new skills are becoming scarcer, education is lagging the new knowledge economy need and we are applying these old rules of measuring outcomes in the wrong way in our changed world. Professor Christensen argues that successful companies are making the right economic decisions within the wrong situation or economic needed times. Capital is not scarce, it is abundant, yet it seems we are investing in the wrong types of innovation. We still are measuring capital as though it was scarce when it is not.

Companies continue to drive assets off their books, they choose innovations that provide fast returns, they continue to outsource and they consistently keep the time horizons deliberately short for improving the rates of return and constantly higher dividends in focusing on the quick wins.

The politicians have not grasped the need to change the thinking to invest in longer term innovation that makes for more breakthrough and radical innovation activity. Those that employ more people, kick starts new economic activity with fresh investment, new equipping to supply these new activities, and finally also attempt to reposition dividends in their longer-term value for the recipients.

Awash with money

In the Economist there was a recent article “A world of cheap money”  stating: “The message from the rich world’s central banks is clear: the era of ultra-loose monetary policy is here to stay.”

The Economist goes on to state: “Unfortunately, the effect on output has been more muted. America’s GDP is showing signs of accelerating. But Europe’s economies are flat or shrinking. Overall, rich-world growth is likely to be barely over 1% in 2013, little better than in 2012″

“Given the gap between financial froth and feeble growth, are central bankers doing the right thing? Supporters argue that cheap money is essential for economic recovery, particularly when (as in Europe and America) austerity-minded governments are tightening fiscal policy. Critics counter that low rates simply pump up asset bubbles, distort financial markets and risk inflation”

Clearly “monetary policy should not just operate in a vacuum” and it is Professor Christensen’s insight on where innovation is playing it part, or not in most cases, that can hold one of the real keys for rethinking how we measure success. Let me explain if you have not read his thoughts on this.

There are three types of innovation in his view where jobs occur or are lost.

These are summarized by Professor Christensen as:

Empowering innovations: these create jobs, because they require more and more people who can build, distribute, sell and service these products. Empowering investments also use capital — to expand capacity and to finance receivables and inventory. Empowering innovations are essential for growth because they create new consumption.

The second type is “sustaining” innovations: these replace old products with new models. They replace yesterday’s products with today’s products and create few jobs. They keep our economy vibrant — and, in dollars, they account for the most innovation. But they have a neutral effect on economic activity and on capital.

The third type is “efficiency” innovations: these reduce the cost of making and distributing existing products and services. Taken together in an industry, such innovations almost always offset the net number of new jobs, because they streamline processes. But they also preserve many of the remaining jobs — because without those, entire companies and industries would disappear in competition against companies abroad that have innovated more efficiently.

Efficiency innovations also emancipates capital. Without them, much of an economy’s capital is held captive on balance sheets, with no way to redeploy it as fuel for new, empowering innovations until it is released.

His view here is: “as long as empowering innovations create more jobs than efficiency innovations eliminate, and as long as the capital that efficiency innovations liberate is invested back into empowering innovations, we keep recessions at bay” and suggests we are today not doing that.

The innovation machine is out of balance today

Today, our innovation activities are out of balance. I can strongly relate to this on where organizations are spending their innovation dollars: in short-term fixes, incremental thinking and efficiency relating projects, not on deepening innovation capacity.

We are presently encouraging our managers to measure profitability based on a return on net assets, or return on capital employed. That encourages companies to liberate their capital, so they invest in efficiency innovations, which means they can make even more money with fewer resources, so why would they invest in those more-longer term capital-intensive innovation projects under “empowering innovation?”

Professor Christensen offers this thought “what the economy ultimately needs are empowering innovations—like the Model T, the transistor radio. Empowering innovations require long-term investments, which tie up capital for years and years. So companies are using capital to create more capital, and the world is awash in the result, more capital but the innovations we need to advance aren’t there”- this accumulating capital is remaining idle.

Today’s growth sustaining challenges are not framed properly

The need is to “unlock” the right type of innovation that creates a renewed, sustaining wealth for economic and industry revitalisation. There needs to be a shift from investing in efficiency innovation that tend to cut out jobs, where the focus is constantly on focusing on less capital in use and fewer people so that the extra release of capital is re-invested in more efficiency, not in disruptive or empowering innovation. The present day realities within business are how success is measures and if that is on RONA, ROCE and I.R.R then that is where the focus will remain.

Changing the existing paradigms takes time and convergence.

Empowering innovation takes time – anything from six to twenty years depending on many of the necessary long-term wealth creation factors required based on research and vision.

Two factors are well in place. We have capital, almost at zero borrowing rates, that the future net present value of any future stream of growth is identical to one that yields a return in weeks. We have a growing and compelling set of social needs to resolve many grand societal challenges that come more from empowering innovation.

Offsetting this we have a powerful set of factors to change if we see job creation as part of any economic recovery. We first have this current risk-aversion prevailing and we spend public capital on propping up ailing industries but do not pursue the alternatives with a grander vision and plan.

We are holding renovation back in some of these politically motivated decisions yet the young in most countries cannot find any jobs. We prop up banks with their bad loans yet the defaults by small and medium-sized enterprises will continue to rise. In Spain, Italy, Portugal, Greece, Ireland, and many parts of the UK, along with others all have growing at alarming rates, bad debts. So many smaller businesses are close to the ‘tipping point’ of going bust here in Europe.

A bolder innovative framing is necessary

We need bolder re-framing of our challenges, a clear recalibration of our measuring success and a set of cohesive strategies, policies and political judgements. What will eventually bring this to the boil is the unrest, unemployed, stagnating economies, risks of growing debt and loss of property and capital achieved from the past unless those in policy decision don’t ‘face up’ and make bolder, imaginative steps. Our markets need stimulating and this will either be from importing the type of goods that meet our declining economic needs as those are produced more efficiently elsewhere. Not a good prospect to face.

Lastly the very company that needs financing does not get the financing it needs. Capital is presently hoarded in the billions on pristine balance sheets of the biggest corporations; billions are inert and uninvested in private equity funds and sitting in countless private bank accounts offshore. According to one report $1.8 trillion just sits in American listed firms alone.

The missing link is between cheap money and finding ways to achieve new corporate investments in the developed  economies that need this, otherwise there continues to be growing issues of dealing in the latest crisis or further kicking the can down the road in future pay off from continuous mounting debts and a lack of addressing bad loans and all the structural problems we are not facing today except in applying ‘selective’ austerity..

So why has this caught my attention?

Simply incremental innovation (sustaining, efficiency innovation) is getting us no-where fast. You see so many people within many of our organizations, big and small, working longer hours, feeling reduced identification with what they are doing and lacking that sustaining satisfaction. There are millions out of work that could offer positive economic activity contribution.  We could have innovation that is exciting, that is empowering and this does come from working on challenging that are game changing concepts that we often suggest today as distinctive, disruptive, breakthrough, radical and certainly are empowering.

We are failing to translate today’s set of challenges because the metrics applied are inappropriate to our needs today and in the future. We are applying solutions often in their vacuum, they boost sufficiently in small ways but lack boldness, changing the dynamics and policies, the way we should be measuring and valuing success. We reflect where we are in the West – far too timid, applying often just a real hard dose of harsh austerity, minimal structural reform that have a constraint on growth as we don’t people in their rightful place within the equation, they are being progressively written out of the capital model we seem to be locked into.  We apply “selective” innovation solutions to meet mostly short-term gains.

There are different solutions that need discussion

There are different innovative solutions, those I will attempt to outline in my next article, more to stimulate and trigger awareness of alternatives for today’s more jobless innovation outcomes.

In the meantime watch Professor Clayton Christensen’s talk at the World economic forum under “an insight, an idea with Clayton Christensen”. Worth watching, believe me, and then you might be reflecting on why we do need to change that does bring that real, fresh growth from innovation that has people and jobs as part of the lasting equation, that fits more in today’s world, needing innovation to begin a stronger recovery than we have seen in a number of years.

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The Cascading Effect Needed for Innovation Success

Posted on April 3, 2013 by

Getting innovation through any process of understanding is hard. Knowing what is required to generate innovation throughout an entire organization is even more so.

We need to deploy the cascading effect on innovation

Often we fail to understand our role in contributing to innovation, we need a cascading effect. For me the “cascading effect” for innovation is “a sequence of events in which each produces the circumstances necessary for the initiation of the next”. It is the presenting of an idea, a concept, prototype, a piece of knowledge that provides the catalyst to be exploited in a broader community as the next step and so on. It cascades. It is where we fit within the innovation web.

Innovation often has to go through a set of stage gates, or cross thresholds, set by others or judged to be the essential cross over points. When you achieve these cross over points you induce more resources, more attention and momentum. The more it successfully progresses, it eventually gains a higher resilience and then the innovation picks up more for this “cascading effect”. The more thresholds you cross, you gain space, time, increasing attention within the organization and an increasing identity of what the innovation can achieve. The more it creates a ‘reaction’ or achieves ‘growing interactions’ then the more it ‘cascades’ for producing a cumulative effect moving through the successive stages. We gain increasing identity and strength the more we get involved in the cascading effect.

Influencing the dynamics within the innovation system

When I have discussed the Executive Innovation Work Mat I have argued you need to achieve this cascading effect as part of the Senior Management Litmus Test for Innovation Engagement.  You need to influence the dynamics within the innovation system; you need to reveal increasingly the challenges and roadblocks to innovation. You need to reduce these challenges down by actively promoting innovation. You do need a well thought-through plan.

Innovation does need structures and systems. It is complex. As we get increasingly involved in innovation activity we meet more of the unforeseen, the uncertainties of working on something new where there is a need to make a decision, often on a limited set of factors than the ideal. We need to reach out for help, for understanding, for assistance.

So ‘the cascade effect for innovation’ often  does have to deal with many unforeseen chains of events that need working through, as they can be negative on the system by taking away vital resources from other more valuable, commercially viable projects, or they can be breakthrough or transformational in pursuing.

By having in place a clear Innovation framework you have a communicating mechanism to discuss many of these unforeseen events. It guides innovation activity. The framework can establish a common language; it can offer a sense of the common cause for this to work. We need to ‘cascade’ this down the organization so everyone can get ‘the picture’ and understand its component parts as well as provide the communication platform across and back up to frame issues as they occur.

I suggest this is based on the Executive Innovation Work Mat, it can offer much in helping innovation if well thought through. Our resources are finite and innovation often suffers even more from this than many other aspects within business. We do need to provide an organizing innovation framework coming from those that set the strategy. This provides the general roadmap, the direction, the frame where innovation contributes to strategy. If we don’t have a well-articulated innovation strategy, how do you expect innovations that ‘drive’ the strategy forward to meet its aims?

We have the need to cascade innovation from the top down

We do need a strategic framework to moderate and accelerate meaningful innovation. Often we don’t, this is not provided. For me the framework or work mat moderates innovation and goes much towards reducing the multiple interpretations, and the variety of initiatives often described or justified as innovative but definitely missing the strategic mark.

The majority of people within the organization and who work alongside it would appreciate a greater understanding of the core concepts, principles and direction that their innovation activity should take. To understand what is valued, essential to defend, promote and improve. To clarify what is highly strategic to describe and ‘form’ around helps innovation to perform its required task, of delivering new growth that aligns into the strategic needs.

Equally, many within organizations where innovation is left more ‘open’ do run the risk that there is an over-emphasis on idea generation. By placing the emphasis point further along the innovation value chain that it is the exploring the benefits that flow from ideas, not the ideas alone, can make a significant difference in improving the quality of innovation and reducing the belief that quantity was the important aspect.

Then we also have to cascade innovation from the bottom up.

The richness of innovation lies not just in the well planned but in the sudden discovery, the pursuit of a game changing innovation concept often stumbled upon. Many of these come from the bottom up. In research labs across the globe, the researcher should have permission, an open endorsement from above, to investigate and explore innovation, not just in their field of ability but equally encouraged in a broader sense, as well.

There are many benefits in  building into our daily activities valuable time to explore, to allow employees to investigate ‘something’ that initially may not seem to fit with any prescribed plan of predetermined concepts but from this “free time” emerges something that can evolve and fits perfectly within a good corporate strategy.

Equally there are countless innovations that emerged from nowhere, that had no relationship with the strategic directions, yet have been successful. Are these wrong, should they be ignored, killed off or just simply allowed to happen? Usually some survive and thrive against all odds, starved of resources, yet they somehow ‘emerge’ and become outstanding contributors to an organizations business.

Organizations need to stay totally alert to these. The issue is the way you approach this. If you insist on innovation that only ‘maps’ back to the innovation strategy, you drive out an awful lot of entrepreneurial energy, you miss many a potential innovation that might have been you next block buster. We need to find a balance here but it needs visibility and curiosity and allow for time for emerging, unexpected innovations, to permeate before they are finally judged.

The combination effect of wanting to innovate and being able too is the desired end result

Innovation provides organization the very concepts that drive growth, contribute to profits in new ways and allows individuals within the organization to identify with success.

If we don’t offer a sound innovation framework, innovation remains haphazard, left to chance. If we build into peoples work time the chance to explore innovation that ‘fits’ the overarching strategy, we combine the best of both aspects. What we want to encourage is innovation that allows for both a purposeful  approach to innovation that ‘seems’ to align to the direction laid out in the strategy but also to allow for those moments when you stumble upon something that has real promise. We need to allow for both.

Opportunistic and planned innovation can sit side-by-side.

So if innovation can be either opportunistic or planned. To allow everyone to become engaged, to partly dream, to be allowed to explore and can be confident that they can ‘cascade’ both up and down the organization to achieve this innovation effect, then we need to seek out both.  As we “cascade innovation” we need to build and align it to the strategy, the Executive Innovation Work Mat can be the very vehicle to allow that to happen. We need to achieve a uniformed view on the overarching design of our innovation activities and that does need to come from the top.

Designing a new strategic innovation framework at the top of organizations can help close the many gaps we see today in innovation, especially in achieving its need to achieve a growing alignment to an organizations strategy. We need to move from many present ‘disconnects’ to ‘reconnecting’ and “allowing” innovation to be more cross-cutting, more informative to allow all the people involved in its production that greater freedom and scope in their understanding so as to contribute into the growth organizations leaders are demanding.

The “cascading effect for innovation” has a two-way flow.

We need to encourage bottom up innovation, those that are close to markets, the raw ideas and who can make more connections than those far removed. We also need the overarching innovation framework so everyone has a growing understanding of where, how, with whom and why innovation needs to head in a ‘given’ set of directions and what are the critical components that enable this to ‘connect and happen’ and provides the ‘how’ it can work. The components of  the Executive Innovation Work Mat, can promote this “cascading effect needed for innovation” to flow both ways and move closer to a well-aligned organization that marks a successful business.

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Strike! Innovation is on strike!

Posted on March 27, 2013 by

Many years back to sell newspapers, sensational headlines were conceived to get immediate attention so people would buy the paper. It went like this “Strike! Innovation is on strike! Read all about it”  Today innovation is actually on strike! Just take a look at this:

We are in the middle of an Innovation Strike -source Nesta.org.uk

We are in the middle of an Innovation Strike – source Nesta.org.uk

A strike of declining investment, of a lack of confidence, of not sharing in the belief innovation offers a solution to our continued problems of wealth creation, of economic growth, of galvanizing society.

So for many, innovation is actually on strike, we are not investing as we should according to a series of reports and analysis, focusing specifically on the UK economy, sponsored by Nesta. Nesta is the UK’s innovation foundation and they help people and organisations bring great ideas to life. They do this by providing investments and grants and mobilising research, networks and skills. They operate independently but are very central in shaping innovation thinking.

Extra! Extra! Read All About It! Innovation is on Strike!

Extra! Extra! Read All About It! Innovation on Strike!

You can “read all about it” through these links offered, firstly an Executive Summary and the downloading the full report from their site.

I offer a fairly extensive set of ‘extracts’ below, so read on:

Already a lost decade of innovation has occurred

According to Nesta “The UK economy has experienced a ‘lost decade’ of innovation, with new evidence showing that businesses had a crisis of confidence in the 2000s, prioritising cash and concrete over investment in innovation”.

* Nesta’s latest Innovation Index released back in 2012 showed that investment in innovation by British businesses has fallen (or collapsed) by £24bn since the recession began and has not recovered. This is five times the amount the Government spends each year on science and technology research.

* Recently a further view on innovation was expressed by Nesta in mid-March 2013 on how to use the Government’s purchasing power to boost Britain’s most innovative businesses, arguing there is a continued and urgent concern on how to get Britain’s businesses investing in innovation again.

Some major points summarized here

I cannot provide proper justice to these extensive reports or to all the contributors that make up its worth but let me attempt to pull out of these reports some headlines that seem to me the real underlying issues of why the UK, and many others, are in this period of innovation stagnation.

Nesta produces a highly valued innovation index for the UK, this showed in its third review

  • Innovation investment fell by 7% or £7.4bn between 2008 and 2009, as the recession began
  • A further fall of 14%, or £17bn, from 2009 to 2011, according to a survey of 1,200 businesses
  • After rising steadily from 1990 to 2000, innovation stagnated from 2000-2008 at 12% of private sector output

With a decline of £24bn, since the credit crunch in 2008, it is interesting that even in the period between 2000 to 2007 businesses investment in innovation had levelled off. Investments in fixed assets fell and became increasingly dominated by bricks and mortar at the price of technology. Companies accumulated cash and concrete in the 2000s, far from the age of innovation.

There has been an increasing disconnect between the UK’s financial sector and investment in innovation and technology. The 2008 financial crisis has turned into the longest downturn in modern times.

We are seemingly caught between the two sides of an argument, Plan A for recovery based on austerity or Plan B based on stimulus. We see the continued consequences of the hardening push for austerity  in nearly all the Mediterranean Countries, let alone the severity of the austerity part has continued consequences in the UK and the USA . As we debate this two dimension view there are crucial ways everyone is losing ground, especially to the developing world and its significant focus on its innovation activities.

Nesta argue for Plan I to be the ‘missing part’ for the UK to thrive as a productive, dynamic economy.

The report lays out in significant detail the areas of potential focus and why and what they can be achieved to reverse this set of trends on innovation investment and regain economic growth within the UK.

Firstly dealing with the question of innovation

  • The ability to turn ideas into useful new products, services and ways of doing things is the wellspring of prosperity for any developed country
  • The companies that invest most in innovation tend to grow faster than ones that don’t; and the countries that invest most in innovation do as well
  • Nor is it a coincidence that many of the nation’s doing best today in innovation have articulated a clear vision of where they think their future wealth and jobs will come from
  • Countries as diverse as Korea and Finland, Israel and Singapore have sustained a mood of optimism and possibility through the crisis, and given business a sense of the future gains that make investment today worthwhile.

A growing reality or a self-preservation attitude still prevails.

  • Unfortunately the current economic debate in the UK has pushed innovation and questions of long–term growth to the margins
  • But if we want to take advantage of the opportunities on offer in the next decade from new technologies, new markets, and new ways of doing things, we have to face up to the gaps, the failings and the many ways in which institutions and markets aren’t well designed to make the most of new ideas. They stay stuck in the past.
  • It is hard to calculate precisely the size of the gap, but some of the analysis that follows suggests that in the UK, they may be under–investing in innovation to the tune of £38 billion a year.
  • Transformation from industrial decay shows that change for the better can happen relatively quickly where there is the will. Currently we leave to many as “walking dead” and badly under support those in finance and resources required that show the way forward to ‘regenerate’.

The prize according to Nesta’s report is what innovation still offers us

Innovation drives economic growth. source- Nesta.org.uk

Innovation drives economic growth. source- Nesta.org.uk

  • First, the continuing advance of information technology is showing no signs of slowing down. Moore’s, Metcalfe’s and Gilder’s ‘laws’, which predict that processing power, bandwidth and network connectivity will increase exponentially over time, still appear to be in full force and can open up a dizzying range of possibilities
  • The huge potential of ICT is just one aspect of innovation. Other technological developments, from new advances in life sciences to the emerging disciplines of nanotechnology could have just as large an effect.
  • During this phase it may be the ability to integrate different technologies that will be critical — from genomics and proteomics to bioengineering. New materials, including graphene and other carbon structures, may lead to dramatic breakthroughs in manufacturing.
  • Social innovations also offer great potential. The wastefulness, in both human and financial terms, of the way we run our healthcare systems, the way we care for old people, and the way we treat the most excluded in society, is huge
  • The right social innovations could unlock as much value as many great social innovations did in the nineteenth century. During past periods of rapid change, like the mid–to–late nineteenth century, radical social innovation and reform proved essential for the full deployment of technological innovations, from industrialisation to the railways. The same is very likely to be true as the world gropes for a new approach to growth.

Most of these innovations will create benefits not just for those who develop and commercialize them, but also for those that can effectively deploy them, and build new services and businesses around them.

The poor state of the UK innovation system needs rethinking

The interplay of resources, people, ideas and markets in which innovation happens — much isn’t working well according to the report. What can be improved?

There are three broad ways in which the innovative capacity of the UK can be improved:

  1. Investment: increasing how much the UK invests in innovation
  2. Systems: upgrading the system of innovation so that these investments go further, including greater demand
  3. People: changing the underlying cultures and skill sets to be more innovation– friendly

Making the innovation system work better

The second factor suggested, that holds back the UK’s ability to innovate, is the structure of their innovation system and is worth one additional comment — it is the combination of the involved organisations, their links and forms that determine how new ideas become reality. For over a hundred years, commentators have noticed a contrast in the UK between the world of ideas and the world of implementation- what a lovely observation that is!

Designing an innovation policy

So within the report there are many policy suggestions but the aspect that stands out for me come in the way the Nesta’s reports suggest four design principles for effective policy development

A design that involves arranging fundamental elements according to a few overarching rules or ‘design principles’, and then they suggest we all furiously set about adapting and improving them in the light of experience. Keep it simple, effective but well focused.

The four are summarized here:

  • Experimentation. Innovation is a risky business. Breakthroughs only come from a willingness to push at boundaries, to take risks, and, sometimes, to fail. What matters is not backing winning projects every time, but backing a good portfolio of projects. Experimentation is not easy, especially in an adversarial political system, that is often very risk adverse due to this. Risks need to be taken in the face of huge challenges like ageing or climate change, as well as in making the most of great new opportunities like the Internet of Things or synthetic biology.
  • Entrepreneurship. Entrepreneurs are essential to an innovative economy: they don’t usually come up with ideas, but they do work out how to put ideas into practice. Entrepreneurship is also important to good innovation policy-making. The flip–side of an experimental innovation policy is the need for entrepreneurial leadership and challenge within the system. Entrepreneurial leadership within the system can be valuable. These kinds of entrepreneurial figures provide a valuable antidote to consensual policy that works primarily with incumbents.
  • Openness. Good innovation policy cannot be made by government alone and certainly cannot be delivered solely through state bodies. Innovation flourishes when businesses, research organisations, and intermediaries such as standards bodies and trade bodies come together to identify and address major challenges. What is important though is government cannot rely simply on assembling interested groups – this risks capture by incumbents and vested interests, it needs a very open platforms where all can participate, working towards their goals but recognizing the essential need of all the diverse participates on the platforms.
  • Ambition. Finally, innovation policy needs ambition, with the right mix of challenge and focus. Government’s power as a leader, as a customer and as a regulator matters as much as it’s narrow role as a supporter of research and development. Finland, Korea and Israel are all countries that have managed to make this a reality. In all cases, leadership has come from the top but been broadly based.

Making policy needs to guard against certain common present barriers

The process of making innovation policy must be future–focused. The value of foresight exercises are recommended which are not great at predicting the future but better at making those who undertake them recognise the future when it manifests itself

Policy also needs to be aligned. A frequent complaint made by foreign businesses looking to make major R&D investments in the UK is that government policy is poorly aligned: helping to orchestrate such things as land, planning, training, supply chain development, and links to universities

It seems UK innovation policy lags behind that of Germany and Japan for example, both of which use grand challenges as a way of organising and focusing innovative activity.

The report finishes the discussion section with this before it moves into specific proposals.

The endless public debates over responses to the economic crisis needs to change if we are to put in place a sustainable alternative to stagnation. We need business leaders who are willing to prioritise the case for innovation over other issues such as top rates of tax or regulation. We need to use critical moments of choice, we need to restore faith and trust, we need to unlock this huge cash pile sitting on many organizations balance sheets.

And we need political leaders with a deeper understanding of innovation (at present only a tiny fraction have direct experience), and an appetite to advocate it. Innovation needs political and public advocacy and argument if it’s to be widely supported.

In summary

Nesta are a tireless champion of innovation. The whole understanding that if innovation stagnates so does the chance for recovery, for wealth creation and growth in jobs, and in our economic activity. We are not ‘stretching’ for a better future, we are sitting back waiting for the right ‘fundamentals’ to return. They will not unless we decide to open up and reinvest in ‘things’ that have perhaps higher risk but contribute to changing today’s lack of dynamics.

This report might focus upon the UK but much of what it argues applies to most of the developed nations in Europe and North America.

We are told our corporations are awash with cash; our governments are strapped for revenue generation activities. Plan A requires austerity, Plan B needs stimulus but their balance requires what a Plan I can offer. To regain growth but at the same time manage what we have more wisely.  We need to balance all three.

I can only recommend you spend some time on the Nesta web site and value, as I do, their focus on innovation in solutions, stimulating debates, conversations and well-structured reports. They are one of the best sources to go, for appreciating the complexity of innovation and being able to “see” where innovation lies, at the heart of all our futures.

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Determining our culture governs the greatness within our innovation efforts.

Posted on March 25, 2013 by

Managing a fluid, rapidly changing culture that promotes innovation is complex. So often it is left to chance, left to individual experiment and interpretation, far too ad hoc in its design and progress.

We certainly need to find better ways to encourage and obtain a higher commit to our approaches into building ‘culture’ and all it covers into our thinking, if we want to really have innovation deliver on its potential. Unless the values, norms and beliefs are not clearly thought-through and consistently reinforced daily through a consistent flow of initiatives to change, to explore, to learn from, any movement can simply wither and die from this lack of ‘total’ dedication.

The question we need to ask of our management is this: “if you are wanting innovation then we all need to work through the determinants that encourage innovation together” and then set about communicating these that are highly valued and expected throughout the organization, so as to encourage them to support and make innovation happen.

A certain commitment and a lack of patience

The issue is this can take a lot of time and dedicated commitment and sadly, management lack both patience and often that commitment to “seeing it fully through”, they seem to get side tracked and move onto the next thing. I feel management is sometimes like grazing nomadic animals looking constantly for fresher grass, impatient for the green shoots that are appearing from their sporadic grazing. They have no patience for lasting cultivation.

Maybe we need an Innovation & Culture Officer, even just for a given time perhaps, or we mandate the human resource group to allocate clear dedicated resources for a significant time exclusively on understanding climates factors and then setting about creating the culture to innovate with the board’s complete backing.

Leaders have to set the style they want from an innovating culture

Leaders are in the best position to create the environment that determines the culture and from this comes innovations end result, the outcome they desire. Too little time is spent by leaders on thinking deeply about what type of environment they want, what type of culture they need, often it is left to chance, to others to evolve not by design but by chance and personal interpretation. How wrong.

Leaders who want innovation need to offer a positive, supportive environment where the attitudes, perspectives and beliefs are well articulated and communicated. Asking people to change is not a one-off event, it is a constant, daily ‘grind’ but if you provide the right environment and enablers that innovation requires, you can get a positive reaction and you then raise the cultural expectations. These raised expectations  eventually translate into making the change needed for creating a culture for innovation. Organization culture is either a barrier or the real enabler to innovation, for it to come to life and thrive.

Offering the sum total

Culture reflects the sum total of a way of life. It provides the patterns, the values, the traits and behaviours shared within an organization that can make or break innovation. It clarifies what is possible, tolerates and allows for experimentation, for trials, for learning to take place. It creates an environment where trust can grow and confidence is channelled more and more into innovation experimentation, engagement and exploration.

Culture has the most profound influence on innovation’s success, it can’t be left to chance, it needs carefully designing and nourishing and this can only come from the top allowing it to grow in well thought-through and designed ways. This climate being built often cannot be touched yet the actions can be felt in multiple ways to promote that environment where innovation flourishes.

Fostering the right climate is critical

The fostering of the environment, the building of the culture to pursue innovation means different things to different people. Changing the environment has a great chance of changing people’s behaviour. A systematic planting of  ‘new seeds’ will eventually ‘yield’ an innovation result that ‘feeds’ off of this new culture that can multiply and replicate. Yet it does take this concerted and dedicated time and effort to constantly explore, adapt and amend as it is actually a ‘living culture’ that needs constantly feeding and nurturing.

It means providing the space to stimulate; a place to promote fresh thinking so the generating of new ideas is managed in a place that fosters interaction and collaboration. An innovation environment is made up of creating the positive atmosphere to encourage and nurture, to reflect and learn from failures that will inevitably happen.

You need to link and communicate, to offer  a place  where it is the ‘norm’ to challenge, to explore multiple sources of ideas, to provide a process and guiding set of procedures to capture and translate different thinking. A place where multiple interactions and connections occur so as to make innovation real and effective by providing the right environment and conditions to explore and extract.

Connecting culture to innovation makes it potentially highly touchable.

Culture runs through everything we do when we engage. We can ‘feel’ culture yet we can’t touch ‘it’ yet it always touches us in so many ways. Innovation on the other hand we can touch, we can see, we can strongly relate too, it becomes tangible when it moves from an idea into the realm of reality as ‘new’ to the world. When you combine culture and innovation in the right ways it becomes a very powerful force that transforms and prevails, it mobilizes and can galvanize us to great things.

It is when culture offers us a more creative environment, one that gives us a greater security than one based on living in fear and insecurity we grow in confidence, we open up our minds to increasing possibilities, we want to learn and experience and these matter to innovations ultimate success.

Innovation takes on a powerful identity from its cultural roots that transform attitudes into actions that then become those eventual outcomes we look for in what we do – greatness in our innovation efforts – that can be seen, valued and held up for others to admire.

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Why we often can’t self-disrupt

Posted on March 21, 2013 by

In the past few days I enjoyed listening to a webinar by Clayton Christensen and Max Wessel for the Forum for Growth and Innovation, a Harvard Business School research centre initiative.  The Forum for Growth and Innovation seeks to develop “breakthrough theories to help businesses become more successful innovators and create new, robust sources of growth”.  The webinar was all around surviving disruption but discussed also “looking beyond the horizons”.

The Theory of Disruptive Innovation

To offer a quote from the Forums own website (www.thefgi.net.):  “Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors”.

“An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill. Characteristics of disruptive businesses, at least in their initial stages, can include: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics”.

The webinar raised in my mind many unanswered questions.

Central to the thinking for disruptive innovation is to address the jobs-to-be-done. Another nice piece that describes Clayton Christensen’s work in this area of JTBD is here. This seemingly simple idea has profound implications for re-framing industries.

Well in many of my unanswered questions there are some JTBD aspects clearly to this as well. Still that is another story for another day.

One question I had was this:

“Why do we have internal difficulties to self-disrupt?”

In most cases organizations are not able to self-disrupt and this is largely covered by this veritable list of constraints. So I set about thinking what these could be, here is my rather ‘stark’ list, can you think of any more?

  • Organizations often are far too close to existing markets to recognize that they are actually shifting; they ignore or miss the signs in many ways.
  • They get so fixed on their own perceptions they don’t see change coming – often until it is too late and have lost that intuitive, entrepreneurial touch within the mix.
  • They have invested too much, they hang on, often reducing prices, pushing more volume into the markets, crank out even more “extras” to try and off set change.
  • Organizations are full of rigidities, rules, procedures, processes and personalities and often no one is prepared to put their hand up to challenge the present paradigm.
  • The reinforcing values are just plain tough to change, you need dynamite to shift these
  • The people within organizations love the comfort of the nest they have built around themselves, who wants to bail out and expose themselves?
  • The processes become over burdening, hard to change, far too complex to change without significant commitment and top management support
  • Cultures are wonderful things but the dark side is they can stifle and constrain far more than promote and let free.
  • Leadership is locked into the strategy, tied into compensation on delivery on the existing, not on the preferred, far more radical, risky alternatives
  • Organizations, especially large ones are less than nimble, they fail to adapt and respond quickly enough – they prefer to double-down’ with more of the same but faster, leaner and more determined than ever, missing the real dangers occurring under their noses
  • Today, we are putting more and more of our organizations into boxes, they are becoming highly structured and specialized to maximise effectiveness and efficiency.
  • Markets are more global, faster, fiercer to compete in, often organizations are reluctant to explore and experiment with new business models, or push into adjacencies for fear.
  • Lastly it does not matter how hard many organizations try, they lack real intelligence in market and customer needs, hence why the jobs-to-be-done is one essential component.

While all these stay in place, or not recognized as inhibitors to your own disruption capabilities, it is not surprising it is in the end those up and coming usurpers, the nimble and unencumbered, that thrive and begin to disrupt. You simply struggle when you leave it to late- your organization needs to resolve many of the above issues before it is ever capable of responding.

Look more in than out – that is where your danger often lies

Sometimes we are spending all those significant efforts scanning the horizon for the next big disruptive ‘thing’ but in the end it is the internal difficulties that ensure it is ignored until it is too little, too late. Work on the warning signs daily.

“Perpetuating history”, as Clayton Christensen would certainly say, “simply opens the doors to disruptive innovation”. We need to really recognize ALL the symptoms on why we can’t internally self-disrupt. Surviving disruption is something we all need to take the survival course on, so we all can recognize and deal with its introduction and constant threat to total disorder and multiple impact points upon our business. Watch out, disruption is all around us.

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