Measuring and motivating the innovation elephant

Elephant and the blind men 1I often think of the parable of “The Elephant and the Blind Men” when I get into discussions about measuring innovation. What are truths, what are the fallacies?  The parable implies that one’s often subjective experience can be true on your need, but not necessarily the other persons view of their understanding of value.

You get, as the end result, a failure to account for other ‘beliefs’ or capture the real value and miss providing broader motivations to encourage the innovation elephant along.

Establishing the right metrics that motivate and yield the result you are looking for is sometimes a tough challenge. You should always start with the bigger picture, organizational needs and then design the metrics and cascade these throughout the organization

This part of the series exploring the Innovation Work Mat

In a series of articles I will be looking at each of the seven components within the executive innovation work mat to raise questions to probe and prompt the necessary thinking that needs to be made in organizations at different management levels determined to build a lasting innovation competence and structure.

Within this work mat series I’ve already offered some opening thoughts on the role of Governance and Innovation, and also the Environment for innovation matters to innovate followed by the innovating conditions for your Culture and Climate. This is the fourth article aimed at deeper engagement and understanding of the connected parts within innovation management on Metrics and Motivations.

Raising some initial thoughts here.

Questions, nothing but questionsWe really struggle to describe, then measure and then find the right motivations and reward mechanisms and then achieving broad agreement, on something as important as innovation.

If we link metrics into the reward and compensation structure then we release all the energy, passion and anguish and these can serve in many contrary ways.

Linking compensation into all the competing motivations to manage and reward innovation activity is fraught with problems and can have many negative consequences.

Again my elephant comes back into view wandering around in your board room – it can disrupt everything as it charges after the results that it wants, trampling much that is good in its path. Today’s particular trend of focusing on short-term performance can limit innovation significantly and has innovation consequences.

Let’s look at metrics and motivations with a greater connected awareness.

At the end of the story on the elephant and the blind men, a wise man was passing; listened to all the different views of why no one could agree on what they thought the elephant was like. The wise man then replied “All of you are right; you were touching different parts of the elephant so the elephant has all the features as you all said”

Metrics and motivation can really make innovation happen

The value of the measures lies in resolving these eight different questions: 1) are they clear and simple 2) are they relevant to you and the central issues 3)are they timely in what can be achieved, 4)are they credible to the stakeholders involved 5) do they relate to the importance of the goals or trivial, 6) can we act upon them 7) are they consistent to the strategic message and aligned, and finally, 8) are all the investment in these measurements and motivators to capture and analyse, seem sensible and affordable, and lead to real impact in aiding innovation to achieve the goals required.

We do need to focus on the future innovating purpose surely?

Sense of purpose

The innovation links to any measurement system I would argue, should point towards the organizations strategic need and the innovation outcomes required. Within this there are broadly three parts: 1) knowing the organizations future orientated vision and general direction that innovation needs to take, 2) along with the strategic carriers in types, priorities, functions, the indicated mix of innovation activities and then 3) the growth gap that exposes the organizations challenges.so as to bridge these knowledge and resource gaps.

These can build innovation capacity today for future innovating outcomes as they are focused on future work to be done.

For me the output intention of the Integrated Executive Innovation Work Mat should be driving the business case for how innovation contributes and offers the what, where, when, and why within the communications for others to be mobilized into actions and build out build upon this strategic working document.

Then we set about communicating it down the organization

building blocks to success 1I have written before about the cascading effect and communicating value that can support this. Then our metrics begins to cascade down to bring people, the process, and the innovation design of inputs and outputs turn into successful alignment outcomes can come into play. I’ll broaden out my thinking on this area in the next post.

It is within the leadership of organizations to become intimately involved in what is important in innovation for their organization, otherwise we are back to the elephant and the blind men. All  others simply believing they have the answer. Leadership needs to really engage in where it ‘expects’ innovation to yield its results and then ensures it links reward to this set of outcomes.

So what does success look like?

building blocks to successWe should start with the ideals that our innovation activities should be pervasive, to be sustainable and we need to deliver clear business results mapped to known and potential unrecognised customer needs as our primary incentive points.

We need to lay out the building blocks to ‘group’ management and employee identification with what is innovation success. It can begin to motivate all the stakeholders involved. This gives us the opportunity to evaluate appropriate resources, provide the workable benefits related to learning, encourage identification of  problems and encourage the identification of solutions and set about communicating to all involved the understanding of what success can look like.

Building the innovation metric and motivation scorecard there are hundreds of measures you could bring into anything; the skill is you need to find only the right few that focus upon the results you really need achieving. They need to somehow “talk to each other” so they are mutually reinforcing and all involved are pulling in a similar direction.

What gets measured should connect and matter – an example

Cap Gemini Measuring Concept I like one I came across some years back, by Cap Gemini, which firstly suggested you define what innovation was going to be about. Their example was “a robust creative process that turns out very distinct outputs with significant impact in the market place” and then worked on a scale for assessing the degree of innovativeness on a three-dimensional grid of Impact, Distinctiveness and Creative Process.

This then becomes the measuring and motivation barometer tied to the strategic need of an organization of what is expected out of innovation. That sort of complete picture can only come from the senior managements full committed to “wanting distinct outputs of significant impact in the market place”

I think Bain & Co offered also a really valuable performance measuring framework.

This framework offers a really good structure to begin to measure and link the organization. I think it can stimulate initial thinking well.

Bain's meauring innovation performance

(click to enlarge)

There is a case for approaching measurement differently through the intangibles that make up most of our capital.

Intangibles make upMeasuring attempts need to take into account the many intangibles that make up innovation and make them tangible. Understanding the relationships within our intangibles allows groups to benchmark, diagnose, allocate resources, inform others and compensate employee’s efforts through their ongoing knowledge learning. The understanding of our intangibles is for me vital to crack.

Getting this right is increasingly important as the intellectual capitals are being recognized as the real value creation intersections. Establishing the metrics that focus on generating valuable innovation also helps extend ambition and future goals, pushing future innovation strategies as you grow in confidence and understanding of these dynamics.

To end we go back to avoid the story of the Elephant and the blind men.

By taking the integrated approach through the work mat, senior leaders can  offer strategic guidelines into the measures and motivations, by laying out their beliefs and expectations from innovation. They can’t afford to leave this open-ended, just being hopeful, innovation activities need essential alignment.

If we continue to allow the ‘blind men’ to offer their separate opinions and then decide in isolation of the bigger picture, they ‘see’ only their part of the elephant.

I believe if you put in place that critical strategic innovation document, wrestled out of engaging across all the work mat parts, the metrics and motivators can ‘form’ around this strategic intent. This can drive innovation performance.

Seeing the whole picture is the team sitting on (at) the top, directing the innovation elephant along its journey to the destination where they want it to go. Metrics and motivations follow as the path is clearer to measure and travel. We need those wise men to clarify this.

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Recognizing the conditions for changing innovation’s culture and climate

Complexity in innovation knotTackling the culture and climate that is needed to create a thriving innovation environment is complex.

In this post I can only touch on certain points to trigger that deeper examination and offer the stimulus and considerations it needs.

Within the Executive Innovation Work Mat we have seven domains or components that need bringing together to form a new integrated knot.

The aim of the work mat is to draw the senior executive into the innovation process and to support them as they think through what is required to build a more sustaining and integrated innovation understanding within the organization. Their role is a strategic one that sets the conditions and overview on innovation.

Tackling the culture and climate needs for innovation is my third article for raising questions in potential innovators minds. I have already offered some thoughts on Governance for innovation and the Environment conditions required. Before this current series I have extensively focused on the strategic alignment and leadership considerations for their engagement through this work mat approach.

Culture and the necessary climate do have a considerable effect on management practices.

I always gain the impression that the ‘harder side’ of innovation through its processes, technologies, structures and functions gets the greater attention. Partly because this is the more tangible side, yet the ‘softer side’ of climate, culture and environment makes or breaks innovation. “Culture is the playing field of the actions, transactions and interactions” (Hattori and Wycoff,2002) of the people who search and ‘work’ innovation. Dealing with a change in culture is complex.

Complexity

  • It is generally recognized culture moderates innovation, presently the phrase “culture eats strategy for breakfast” attests to that. It influences the management practice, it provides the climate for relationships, and it directly influences behaviours and performance. Attention needs to always be paid to creating a positive culture and climate
  • To foster innovation the ability to create an environment and culture that promotes creativity, promotes engagement and stimulates the ability to learn and embrace change needs knowledge to flow across the organization.
  • The climate for innovation is the signals individuals receive on the expectations and outcomes required from innovation. This needs strategic alignment. This needs reinforcing in governance, function and design, structures, metrics, rewards, hence the real value of an integrated executive innovation work mat approach.

By working constantly on providing the ‘right’ conditions and climate required for innovation allows the culture to evolve and become increasingly innovative as part of its make-up. An innovation culture make it so much easier for senior management to implement innovation strategies and plans.

Along with the environment, culture and climate determine either success or poor performance in eventual outcomes and the potential for sustaining innovation performance.

Creating a culture for innovation requires a new social contract.

In the mid-nineties the work of Goffee and Jones provided this idea of the social contract. If you want to set about establishing a new way of behaving it does need to become a new social contract.

The risk was that if it was not clearly seen as an improvement over the old, it just did not work any better, it would be consigned to being little more than the latest initiative or fad and treated as such. To change the culture requires the management of attention (Van de Van, 1996) otherwise you are constantly moving through different crisis.

  • It is the management of the organization that determines the culture, its values, its practices and behaviours.  It is theirs to create. The creating of one that promotes creativity, is fully engaged, and has shared values and beliefs.
  • The culture of the organization is ultimately a reflection of the leaderships own approach to their practices. If the leadership is seen to seek the short-term, varies its operating practices and does not apply the same value and practices it expects from others, it will never start a positive cultural change for managing innovation, unless through threat and fear, and that is not sustaining.

If an organization wishes to build a unique competitive edge, it is largely going to come through its people, the culture and practices they wish to stimulate.

In truth we face the hard questions that need leadership resolution?

truth in innovation

  • Culture can be the most important barrier to delivering on innovation programmes as Culture has a profound influence on innovation’s success, where is it in your thinking?
  • Replacing all the past years of efficiency and right-sizing what will bridge the present feeling of little incentive, low energy, desire or motivation to consider new ideas or initiatives? Why would employees stick their hand up to be seen? The risks?
  • How do you break the existing ‘business as usual’ culture that dominates?
  • What do you do to overcome the “not-invented here” syndrome often found in most functions? How are you breaking down the silo’s of activity and knowledge?
  • The organization ‘antibodies will fight innovation if they feel threatened
  • What about all those years of pursuing the short-term, reacting to those ‘prevailing’ market conditions by downsizing becomes ‘baked in’ so anything new that is challenging this has a serious set of barriers to overcome. Can this change? Leaders need to decide.
  • If you have employed the approach over many years of incremental is innovation how can you alter these existing behaviours, routines and practices associated with this ‘improvement’ only mentality?
  • Middle managers fall back and use their existing tools, methods and techniques in poor attempts to manage innovation. They feel threatened and vulnerable and will block change unless they become part of the solution and not seen as ‘locked into’ part of the problem. This is a critical blocking point for innovation to ‘take hold’ or not.
  • People are rational actors; they gravitate to the tasks aligned to their elevation, job description, reward metrics and background training.
  • The choice of work tends to move towards safe, familiar products, structures and systems over the potential ‘risk’ associated with innovation unless something radically changes.
  • Any system that reinforces the status quo will resist innovation as it is risky and insecure.
  • Irrespective of the demands for innovation from the top, the established culture simply resists or makes token efforts.

So which ones apply in truth within your organization to resolve?

Our solutions need organizations to play for the long game.

Pushing innovation growth up

There is the need to change many of the current factors that make up the culture and climate to achieve full engagement but this takes time and serious top management commitment

  • It is recognized by 70% of our organizations from research, they regard the CEO as the most important source of developing a culture for innovation to thrive and survive.
  • To identify the conditions to make this sort of substantial change in the necessary cultural attributes and characteristics is really hard work
  • Changing prevailing attitudes, behaviours, compensation and rewards needs careful, considered and dedicated attention
  • Corporate culture does not change easily or quickly, often the old submerges often waiting for the right time to resurface and regain its grip on this is the ‘why we do things around here’
  • The work of a HR team and talent recognitions on how to innovate, the attributes, the traits and characteristics, and then understanding these needs auditing to discover what you have in potential. This enables you to decide what needs to come into the organisation to infuse it differently and then be specifically managed.
  • This whole programme of possible renewal needs a robust internal and externally supporting set of programmes.

In summary we need to offer a culture that will look so different.

Complexity in innovationThe ultimate aim is to instil a culture that places trust, open communication, and those behaviours that seek out innovation and rise to the challenge. A more open, confident culture that actively manages the risk, opportunities and learning as natural and exciting. One that has ‘measured failure’ as part and parcel of the knowledge gained and drawn experiences within the new culture.

A place where there is a growing sense of personal accountability, passion and pride and a reverence, appreciation and respect for tapping into the talent and knowledge that resides inside and outside the organization, where collaboration and networking is second nature.

Lastly where the orientation is outward looking, identification with the customer and their experience dominates thinking and innovation design.

People are the vital part in innovation

It can only be re-emphasised that people are the vital part to innovation, everything else is subservient. To build a lasting culture to innovate requires significant engagement and commitment and this can only come from the top with nothing else than their full engagement, otherwise it will not be perceived as important.

Changing the culture needs addressing in a comprehensive fashion or you will be left with much of the existing culture that will prevail and innovation’s performance will remain as it is currently, or will be much poorer if you attempt to meddle only with selective parts .

Is your organization’s existing innovation good enough? I would certainly question that it is in today’s hyper competitive globally connected world but tackling the culture needs real strategic commitment? The work mat draws out the issues to then wrestle with them and find the level of engagement achievable and what this will truly mean in the organization’s lasting bond with innovation. Leadership can only decide.

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The environment for innovation does really matter

Seven domains in work matThe Executive Innovation Work Mat methodology requires investigation and engagement across the seven domains or components that make up the work mat.  The aim of any work mat discussions undertaken with executives focuses upon bringing out the parts necessary for innovation to happen and that needs an integrated approach and lasting engagement from senior management.

In a series of articles I will be looking at each of the seven components within the work mat to raise questions to probe and prompt the necessary thinking that needs to be made in organizations determined to build a lasting innovation competence and structure.

I’ve already offered some opening thoughts on Governance and Innovation, for me one of the basic building blocks for innovation lies in creating the right conditions for an Environment to innovate.

So what are those environmental conditions required for innovation?

Fostering the Environment for Innovation 1You can’t escape the fact having the right environment for innovation means different things to different people. It has general conditions, a ‘broad church’ approach that needs to be consciously set about to create the atmosphere that encourages and nurtures innovation.

The environment needs to be connected into the vision around innovation, it needs to offer many of the conditions that connect innovation in people’s minds, so it translate into “that fantastic place to work” or “I feel listened too, valued and making a contribution”. Innovation needs the right conditions and for your organization to foster a unique environment to prosper and grow.

The Environment offers the place, time and space to chase after those innovation challenges. It ‘creates’ conditions that inspire you, you want to be stretched both in mind and body to achieve something worthwhile, valued and making a contribution, turning ideas into winning propositions.

The environment needs to resonate so you can feel the buzz.

Increasingly organizations are recognizing the cubicles and boxes provided are killing creativity, reducing communications and creating the space for increased withdrawal. We are killing the meaning at work.

For innovation to work, we need to open up the minds, work hard at creating a physical space that is well designed, offering the opportunity for allowing engagement in. To achieve a certain association with a working environment makes people comfortable and wanting to be more creative, engaged and eager to take part.

We need to offer creative spaces, we need to let in light, and we want to offer back the “inner work life” that gives up the emotions, motivations and perceptions as suggested by Teresa Amabile in her co-authored piece “How leaders kill meaning at work.”  People need a sense of purpose beyond the mundane and it does come from the working conditions with the consistent actions to reinforce this, and this comes from the top of organizations.

Firstly we need to reflect on what innovation needs to overcome

Challenges to overcome

  • Innovation spans multiple time frames; it cuts across business disciplines and challenges the corporate silo. Every corporate boundary set up in physical space, in rules and regulations is already full of ‘yawning’ gaps for ideas and energy to flow across and close those disconnected gaps.
  • There are considerable hurdles for innovation to overcome. The larger your organization the harder it is for innovation to flow. Executives need to consciously work on breaking down boundaries, challenge fixed mind sets,inertia or dogma’s and conflicting needs that lurk in each corner of the building or across the global organization.
  • The ability to consciously encourage a positive supportive environment is vital. The ability to draw people in, to unite them over goals, priorities and their allocated responsibilities and how they are open and receptive are simply a daily task we need to work on, all the time.

Measures for the environment start with the ‘broad brush’ and then refine

  • Executives through a ‘broad brush’ approach can define interactions, behaviours and resolution procedures. These generalizations become important; they give you the line of sight, the ability to measure your environment and evaluate how it is functioning. Your can begin to ‘sense and feel’ this.
  • Organizations increasingly need to develop the conditions that allow people the collective abilities to react quickly and be more agile in their work. The ability to be authentic and get the true needs on the table, understood and shared provides closer association and part of any organizations greater alignment objectives
  • Then you seek out the ability to create top down, bottom up combinations and where you work consciously to reduce the middle that is often blocking this.
  • Finally, the combination of abstract levels for encouragement of fresh thinking and the ability to provide degrees of freedom to organize and act are important to build for the right environment conditions.

Structuring the conditions for the innovation environment

Organizations clearly struggle with complexity. Knowing where the knowledge resides helps unlock this. The growing use of centres of excellence can help here

There is an increasing recognition that knowledge management does need a system that structures it accordingly so people can explore its key phases to help them. I’ve written a fair number of times on Absorptive Capacity and its great value to managing the knowledge flows required for innovation. We need to acquire, assimilate, transform and exploit and our complexity needs to address these basic needs.

The openness to others both internal and external, needs creating the right open conditions to change, to exchange, to encourage that ability to act so as to capture and communicate opportunities that are flowing all around you, inside and outside your organizations.

A code of trust becomes so vital to creating the right conditions for an environment to innovate. I wrote some time about the two sides of an equation for shaping innovation. One was the environment and other was its governance. Governance must be explicit on trust and how it intends to foster and manage this. If you lose trust, you lose the pulse required for innovation. These two together offer the conditions to allow innovation to prosper or be constantly constrained.

The challenge is redesigning the new workspace

New Working Environment

We are working far more at managing by exception and innovation aids this learning. We are working through the combining of vertical and physical worlds, we are extending beyond our own ‘working’ environment increasingly. Environments need to permit individuals to ‘craft their own ways’ through what they learn, how they engage, what they contribute. Our environment needs to embrace a more social one. Knowledge understanding and translation need the right environment to be allowed to flow.

We need to give greater recognition to the organizations intangibles.

We can so much easier relate to the tangibles within our organization. If you can touch it, you can measure it. Well you need to understand the intangibles make up far more of the value of our organizations, some up to 80% and also are essential to understand their source. Intangibles within our environment are made up of the attitudes, outlooks, our ability, space and feeling that allows for greater creative thinking. They make up much within our relationships, networks and connections to allow us to work or block us to feel frustrated.

We seek to encourage open expression, to challenge strange and often those many constraints in our working conditions that need challenging and resolving to either thrive or die. These are invisible walls to the naked eye but can be as permanent as any walls or the things we can touch. Much within our make-up is very intangible and implicit and needs to find space to grow, be valued and be demonstrated in explicit ways. I’ve written before about thenested effects of knowing all our capitals.

Giving responsibility for innovation to everyone

Lastly, I wrote finding space for growing innovation and it brings me back to setting up the general conditions for the environment to innovate. These statements of intent have real value: We need shared responsibility for innovation, we need to encourage knowledge as a central task, we need to work on being ‘collectively conscious, knowing our space and beyond for contributing to innovation. We need to foster respect for others knowledge and expertise and we need to become increasingly adaptive.

The environment we must seek for innovation needs to provide the ‘dynamics’ within our organization’s social fabric, to allow the conditions we believe in too simply flow. Getting those general conditions established allows innovation to take hold and become our future culture.

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Correcting an innovation oversight sometimes hits you hard!

I’ve had one of those weeks where a certain realization took hold, something that had been nagging away at you suddenly surfaces and slaps you in the face. Ouch!

I have just completed my own gap-analysis on how I have explained the Executive Innovation Work Mat methodology and its value.  It actually was a bit of an eye opener. I was surprised in this audit of all associated posts, articles and papers written by myself or in collaboration with Jeffrey Phillips, that there were some very glaring gaps in my posts on explaining this methodology.

The Seven Components that make up the Executive Innovation Work Mat

The Seven Components that make up the Executive Innovation Work Mat

The Innovation Work Mat has seven components or domains

What was crazy here is the fact I have the research, the component parts all worked through, structured and being used in actual engagements to prompt the essential discussions, yet I had not been publishing these enough through my posts to underpin the methodology.

I had been missing essential domain component messages that are the very essence of why you need to work around the entire work mat as essential. I was missing the opportunity to publically talk about ALL the parts as it is the combining of these that does provide its value as an integrated approach to innovation that can cascade throughout the organization.

What was leading, what was lagging?

Lead vs Lag

It reminded me on how important it is to do an audit of your inventory, where you have moved in ‘given’ directions, what you either forget or become blindsided too and what was ‘leading and lagging’ and recognize (eventually) you were missing important associated work mat branding messages that validated its real value.

My work mat messaging had been aimed more at the top of organizations and not across the organization’s working need for this work mat. I was not delivering the value of the work mat to the whole audience that requires understanding and identification for building a comprehensive innovation infrastructure.

I was focusing less on delivering the relevant messages to the very people working in the innovation space, those needing this strategic guidance and support, wanting association and the feeling of total organization engagement. That was for me a big “ah hah” moment. I needed to broaden out my message explaining the work mat components.

The tough sell of innovation

Selling innovation is a tough sell.

Selling innovation is a tough sell.

In truth, it is a hard sell to the top in organizations on innovation, they believe simply by appointing a Chief Innovation Officer and letting them get on with the job, then the board has done enough to make innovation work. Wrong!

Then they believe they can simply turn their attention to other business, still not figuring out why they are not growing enough or why they are running behind their competitors in the global market place yet they are demanding innovation!

Innovation needs the board levels explicit focus on making innovation a core within the organization.

What was lagging in explanation?

I need to gain the essential identification those that are working in innovating need to ‘spread the word’ within their organization on ALL of what needs to combine and then fit together to allow innovation to really work.

The place to start is the value of the Executive Innovation Work Mat and the Role Senior Executives must play in innovation’s success.

So I am starting to address these individual component parts. I started last week on Governance and innovation. There is a need to give each of the seven components further dedicated and explicit posts too.

I want to take each component and outline the reasons on its importance on why we must ask and explore the different questions raised by all the parts that make up innovation.

So I will explore the need for creating the right Environment for Innovation and why it is so critical. Then I felt I should be providing a greater examination of the make-up of all the aspects within Recognizing the Conditions for the Culture and Climate, so essential to stimulating the right conditions for innovation

Then I realized that all my collective material I had not focused on a more exclusive post around the thorny subject of Metrics and Motivations to Innovate – a place of much anguish!  Then I was lacking this broader exploration of our central component of Common Language, Context and Communications to achieve the deepening of innovation within organizations, although I had touched on this here. The final part I want to explore more is Function, Structure, Process and Design  as this needs some specific prompters and clarifier’s as well. Then a final summary of the Organizations Innovation’s Dilemma complete this series on the make up of the components within the Innovation Work Mat.

The seven components that make up the Executive Innovation Work Mat have been extensively researched and structured for client engagements. All the components and rational had all been covered in the initial white paper or the subsequent follow up articles but some of these had been allowed to lie a little too fallow in offering the component rationale and updating the understanding deriving from the ongoing work.

Getting the message out there for all to see

The public side of the work mat had been a little neglected; it needed some re-work beyond a lick of paint. So I thought this is the right time to resolve this and target the broader innovation audience, those that gets ongoing identification and value out of having this innovation work mat in place.

Get your message outSo I want to ‘set about’ correcting this and bring the Work Mat message back on track in recognizing the seven components that make it up are integrated and equally important.

I do need to provide the probing and prompting that lies behind the ‘promise’ by applying the work mat methodology.

I need to offer far more on what does actually makes up the content and knowledge sitting behind this work mat approach.  I only trust you see the value as much as others do, once you become fully engaged in all the parts of the Executive Innovation Work Mat.

Over the coming weeks a series of posts will emerge to address this set of oversights.

** Updated with the actual links into the posts.

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The Role of Governance needed in Innovation

Questions for GovernanceLater this month a book I have looked forward too, is finally being launched. It is called “Innovation Governance: How Top Management Organizes and Mobilizes for Innovation” written by Jean-Philippe Deschamps & Beebe Nelson.  Jean-Philippe Deschamps is emeritus Professor of Technology and Innovation Management at IMD in Lausanne (Switzerland).

Innovation Governance is promising to provide a comprehensive framework to help top management develop the overarching values, policies and initiatives needed for a corporate innovation constitution. The authors are providing a framework for encouraging and focusing innovation by explaining what innovation governance is, the various models for governance and their advantages and disadvantages, how to assess and improve governance practices, and behavioural tactics for maximizing the effectiveness of governance.

I think the book is timely, perhaps well overdue, and seeks to address one of those topics where you observe significant variance across organizations on governance. I’m looking forward to reading it when it is released on 24th March 2014.

Governance is central too much of how we should go about innovation.

I’m not jumping ahead of this book, actually I’m catching up. Within the Executive Innovation Work Mat approach, Governance is one of the seven essential domains we ask senior executives to gather around. I’ve not posted on this apart from a short piece sometime back and wanted to make some amends to this oversight.

Also it will be interesting once I get my hands on this forthcoming book how it alters and extends my thinking on this important part of innovation management, I’m sure it will.

Let me start on opening up  on my thinking around Governance

Governance 1

  • Innovation has moved well beyond a nice to have, it has become an essential to have. Our organizations are still failing to link this fully up in their strategic alignment, in their integrated thinking or breaking down innovation’s essential parts to build this into a core capability. Today innovation should be organized in a mature fashion, governance certainly helps on this.
  • Establishing a formal innovation governance structure is in its ‘forming’ days for many organizations. They have parts of this well thought through and have left other essential parts with wide open gaps that those aware can drive a ‘coach and horse through’. Working on a more comprehensive innovation governance structure should move beyond something ‘we’ think we need, into that of a must have.
  • Innovation is about risk, managing many unknowns and uncertainties, it often becomes hard to allocate a ROI when it is still passing through its different prototyping and learning stages. Organizations continue to demand ROI’s in all shapes and sizes and often this can kill off many promising ideas. A closer monitoring, measuring, refining and defining of innovation activities through better and more sensible governance guidelines would advance innovation well.
  • If we continue to apply ‘little’ governance to innovation or allow ‘selective’ governance determined by individuals, we open up the tap for criticism, cynicism and favouritism. Establishing clear, robust, open and transparent governance systems and structures creates a far better atmosphere and understanding of how innovation is being judged.
  • A well designed system of alignment to strategic goals, clear milestones that provide the flexibility any early stage discovery and piloting of a concept requires managing well. Building the confidence at the decision makers table for conveying trust and belief through imaginative milestone deliveries would make a huge difference to thinking innovation. Governance works both ways in its value and place. By having a good and imaginative one, you use it.
  • Governance needs to resist the bureaucracy that can come with this task. Governance can resolve conflicts, it can aid allocation of resource issues, it can be a great early warning post for changing scope, adjusting ambition up or down and can be the ‘working group’ that alerts and informs besides supporting and encouraging.
  • Governance should be a constant top management priority to have clear line of sight within the management of its total business, innovation by being drawn into governance can also give a ‘beating heart’ to innovation’s position and designing the process and its content make up.
  • Innovation becomes highly valued by all those involved in its management, if it is managed well and thoughtfully. Those wanting to measure the innovation contribution and align these more to the top management’s desire for better innovation to deliver on their growth aspirations, then investing in good Governance structures will aid this. Innovation needs to be more central and Governance can help position it there.
  • Of course, treat Governance like your innovation activities, often understaffed and under-resourced and what you get is what you often deserve, a poor result from your restricted efforts. Often with Governance constructed on the ‘fly’, simply allowed to be cobbled together you get a poor result. It does more damage to the climate for innovation.
  • All good things need appropriate mechanism when you deal with scale. Governance needs proper funding mechanisms, scope definitions, appropriate targets, time frames, realistic and flexible measurements, a fair level of agility, a tight well-honed reporting and set of evaluation metrics. Innovation needs to be well designed and structured; Governance plays an important part in this.

I really hope this new book will deliver on Innovation’s Governance central place.

The value of the forthcoming book I think will address many of these issues and more. Governance of innovation in a comprehensive manner might have arrived, for it to significantly contribute to the momentum that well-designed innovation requires today, one that supports and meets the more complex and demanding challenges being faced in our organizations on managing within their innovation activities.

I’m looking forward to March 24th and the book launch, as Governance for me and the Executive Innovation Work Mat does bring innovation into a more central position. Governance forms a core component for successful innovation engagement and the support it can give our senior managers to become more engaged in innovation.

Governance can give better mechanisms for managing the ‘line of sight’ required at the top of our organisations to give greater confidence in the decision-making that needs to take place. Good governance helps frame that decision-making process and our innovation activities sorely need this.

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Describing the future by using the business narrative

Source : mimiandeunice.com

Source : mimiandeunice.com

In business the future narrative is becoming vital. We all should care about the future and it becomes so important for us all to identify or not, as this gives us our identification.

I have found that narratives are becoming increasingly important to explain ‘things’. I’m re-learning this ‘art’ to tell a compelling story.

Our stories can combine much, communities can identify or reject, we can begin to explain complex stories by presenting a well-designed narrative that presents the arguments. It can explain the connections and outline the issues, both in terms of risk and opportunity. I think business narratives will become essential for our organizations to use to explain where they are and what they see as their future.

A good business narrative should fill a real knowledge gap

Organizations by making this move to open up, to spend more time explaining their ‘fit’ in the world will gain.  Those that stay closed down, secretive and selective in what they reveal will continue to ebb away and not valued as important for our future.

inspiring business narrativesThe business narrative is argued as the way to seek increased identity, allows a broader community to enact, to extract better cues for their sense of identity and offer a better way to draw them into this greater sense of identification.

I wrote about visualizing the innovating future through narrative reporting here and placing the business model as central to this narrative movement here.

We are in a constant state of being adaptive

We live in such a fluid world where we are all being forced constantly to be adaptive. It seems nothing is standing still and if it does it simply gets knocked down. We are all learning this new practice of being nimble and increasingly adaptive. Part of the growing complexity we all are grappling with daily is in the multiple voices that are competing for our attention.

Social platforms and having available the so many easy tools to participate are everywhere.  This has liberated these millions of voices wanting to express themselves. Cutting through these competing voices to sort out those that are relevant to you or the ones that will move you to action are tough. We need to go one step further.

We all feel  the effects of this ‘sucking of time’ out of our days. We need to build a greater sense of connection, understanding the broader connectivity to put ‘things’ in context. The story or narrative will increasing make the final connection and cut through this ‘increasing’ noise. Getting more focused on the context and explaining this through a good narrative or story is becoming essential to go beyond ‘just a connection’ into prompting real identification and even action.

Anchoring ourselves through stories will help regain that lost middle ground.

What we need to do, is anchor all these seemingly competing voices into our stories to explain where we are, where we believe we should be going and what, as we presently know it, will help us get there. Learning the art of good narratives is becoming essential to tell our story and its place to help reduce conflicts and misunderstandings and help us all to navigate a little better in this more complex world.

We can tell these organization stories in so many compelling ways, through the business model, through sustainability reporting. A well-structured business narrative can offer the organizations vision, it can enhance communication, it can highlight where the organization is critically capturing knowledge and putting it to work.

We need to spark more.

Narratives can spark our thinking in how this can encourage innovation and growth, so as to build a growing sense of community and identification, of engagement and identification. As new knowledge comes into us we need to increasingly sort it, to identify the relevant ‘tags’ and assignment them in importance to us, our community and to the broader context.

Mastering the business narrative is becoming critical, in helping to connect the innovations we need to build our future and these need to be more connected by the power of the story.

Moving beyond just the sound bite or tweet

Our lives must move beyond the ‘sound bites’, they give us a feeling of engagement but this can be fleeting, lost in microseconds, we need to gain a greater sense of community and that comes from connecting the fragments of a story and piecing them together to give more lasting meaning. We need the ‘greater’ context, not just fleeting moments.

Business leaders need to practice the art (and science) of describing aspects that might be complex, into good narratives so we can identify with these and recognize ways we can contribute and support.

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Knowing the Value within your Business Model is Vital

Last year I provided a guest post to Patrick Stähler’s Business Model Innovation blog and wanted to add this to my own site as I think it does place the focus on finding value within any business model design.

I think Patrick’s business model lends itself to this constant focus on value. Patrick runs fluidminds, based in Zürich, Switzerland. fluidminds helps its customers to think by challenging existing business rules, offer structured thinking and different perspectives on the strategy process and support the execution.

Patrick wrote his thesis about Business Model innovation in the digital age and from this emerged his unique ‘take ‘on working through the business model. Patrick has been dealing since 1997 with questions around how the web changes Business Models and how Business Model innovation should and could look in the digital economy.

fluidminds wants to create new businesses and to shape industries with business model innovation, with a large part of Patrick’s practice centered  on German speaking markets but he has consulted across numerous English speaking ones as well.

So in my guest post I put forward this three point view of value.

The Business Model design canvas of Patrick Stähler of fluidminds.

The Business Model design canvas of Patrick Stähler of fluidminds.

Knowing where to start in designing a business model or simply just even trying to describe it to others can be difficult. You need to explain its value. The great advantage of explaining this through a business model canvas that looks for value constantly does help.

fluidminds approach to exploring and explaining the business model does just that- it focuses on focusing the mind -  on the value within the business model.

The first value point is in the Value Proposition

Naturally we all look to the Value Proposition to explain the business model but like a car you should always look ‘under the hood’ to see the engine and what gives a car its performance. Equally you should stand back from the proposition and ‘take in’ all that makes this up. For a car it is the styling, the design, the promise and what or who is behind it. We look to buy on a given ‘promise of value’ and in having the benefits explained it allows us to believe and ‘see’ the potentials. A business model, well designed and described, does just that. It confirms the (new or existing) value that makes up the new business model.

Value Proposition on the Business Model CanvasThe value proposition shapes much; it identifies and defines where this business model is providing new offerings that advance on existing benefits to customers. The fluidminds business model canvas seeks out the customer and the customer benefit- it is looking to provide value by identifying where there is a clear fresh, new proposition.

We do have to recognize a value proposition is not just looking to resolve the known jobs-to-be-done. In many new business models can be bringing together often fragmented parts of existing offerings and combining them in new ways, or deliberately and completely disrupting existing businesses through adapting new insight, technology advancements or understanding, into new business models.

We only need to think of Apple and how it combined different technologies, revolutionary design and applied new materials into stunning, game changing products that changed our thinking of the actual jobs we thought about into totally different ones, which totally undermined existing business value or perceptions. Those become game changers.

Equally, a value proposition can emerge from those creative minds; again think Steve Jobs, where totally new business models become constructed upon a strong, clear vision or even different strands or inklings that something can be simply changed as the elements that were needed became available to make this happen. Yet they only happened from the dedicated hard work that came from purposeful design and detailed understanding of the possibilities.

No, value propositions come not just from known jobs-to-be-done but also from the unknown that can be identified through observation, research or ethnography how something is being completed. These come often from fertile, inquiring mind to see new combinations, different discoveries and then piece them together, in a business model that delivers new promise. So think beyond ‘just’ product and services, think always new business potential and then set about its design as the starting point, don’t constrain yourself initially.

Using a business model design approach that offers us a ‘fresh’ canvas structure where we can construct or even deconstruct the existing, might lead to completely revolutionary thinking when it comes to seeking out clear and exploring new value in any business propositions.

The second value point is in the Value Architecture.

For me, the architecture of the Business model is what and where something is going to deliver on the promise identified in the Value Proposition. Although much of the architecture of any business model is not seen, it is the ‘heart’ of what delivers the value. We can’t ignore or gloss over the value architecture, we must address it fully.

Fluidminds business model approach devotes much of its ‘canvas’ to this part. The initial questions of clarifying the offer, the value chain, the need for identifying core capabilities, for explaining the distribution and communication channels and who the (potential) partners are, all are initially raised specifically within the canvas to be addressed.

Value Architecture in the Business Model CanvasSo many of these begin as open ended questions, not just when you are building from scratch a new business model but when you want to ‘challenge’ an existing one. Architecture will always ‘raise its head’ to be fully addressed. It is vital.

It might not be the sexist part of a business model but it is the ‘guts’, the performance engine, which can deliver the respective parts for ‘the promise’.

Addressing what makes up this part might leave some open questions to be resolved later but I’d recommend starting on the architectural design purposefully from the moment you begin, this makes for better and valued on-going conversations. You don’t need to get bogged down in the actual nitty-gritty of the exact design but you do need to sketch out the design and that is the role of the business architect, the orchestrator of design.

This is the place you seek and clarify understanding for that value. You operate often in three thinking minds here, to be fluid, agile and adaptable. You need to layer into your thinking a strategic view, a business design one and begin to work through the implementation actions and possible implications. You design and sketch. You need to begin to think layers of abstraction, a flow cycle approach.

The thinking around each part of the Value Architecture needs to grow within your thinking – the purpose, the performance you need, the possible processes that can support this, the level of preparation this will require and the level of commitment your people need to apply to this, so as to underpin and support the emerging business model or needed to change the existing one, all arise.

This is where the real value comes into play within the Value Architecture part. The deepening of thinking to achieve a shared thinking of what is possible, what needs further work to achieve the ‘value’ being looked for out of the business model.

So value architecture is the place for identifying the ‘value creation’ points, the rules and emerging governance that needs to be put into place. It is a large part of the fluidminds canvas as it requires multiple conversations to continually build the design to deliver on the ‘promise seen’.

The third value point is in teams and values

Anything new has controversy as it is pushing the known and accepted into the unknown. It raises fears, it whispers possible failure but for those that ‘unite’ and can see new possibilities a shared business canvas becomes the bonding point, the point where ideas come together and form within the team.

The canvas becomes the focal point where the energy flows. The value of bringing into any discussions on designing or redesigning a business models early enough those different opinions, is of huge value. This brings you around the canvas to agree where you are going to spend your energy, your days in the future, your commitment, your passion.

Team and Values on the Business Model CanvasYou begin to identify the strengths and weaknesses of the group; you begin to explore each other’s known and often surprisingly unknown competencies.

You also begin to spot gaps but you are working ‘collectively’ in resolving each other’s values and understandings of what ‘makes up’ the essence and worth that you perceive the new business design can bring, that ‘collective difference’ that allows you as a team to keep constantly questioning where the value lies by combing the efforts. You together as a team design-in value.

Having ‘value’ as central to your business model design is critical.

The design of the fluidminds business model canvas purposefully ‘looks’ for the value points. It provides a structure that asks for a value proposition, seeks out the value architecture and looks to the team to define their values and what values they need to pursue.

So why should your new business model exist? Because it seeks out new value, pure and simple, irrespective if you are an entrepreneur, someone just starting out for the first time or an existing business questioning its existing business approach. A new business model in its design, in its proposition, in its approach does need to seek out the value points constantly to get the best out of any new emerging business concept.

Are you exploring value constantly within your business model approach?

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