Building Collective Agility for Innovation

Collective Agility PostAgility is important to me. For me, agility and innovation have needed to always go together. I named my company Agility Innovation Specialists and at its core, we state that the value of this focus can offer a real “intensity in innovation” that we believe reflects today’s world of need.

We encourage you to disrupt the accepted, to constantly challenge the current ways and push into uncomfortable territory. We suggest you seek out customer’s unmet needs, unexplored opportunities to give a new diversity to any thinking, and then we set about accelerating these ideas to fruition. Those all need abundant and constant agility.

Many of our business organizations continue to struggle with innovation and how to make it repeatable, sustaining and transformational. Often, it seems, the more large organizations attempt to become ‘agile’ the more they seem to achieve the very opposite, of rigidity.

Finding solutions to building agility is part of the necessary answer to achieving greater innovation solutions.

Our aim is to strengthen the core by building in increasing ‘waves’ of agility within your business and enable a stronger set of sustaining innovation outcomes. This comes over time, from this need to have agility, flexibility, an open enquiring mind that looks to experiment and explore, making for an agile innovator and this needs diffusion across the entire organization and that does take time. I’m always looking to explore agility and recently came across the concept of “collective agility”

Then we have collective agility

I have been reading a good academic paper recently, one that I came across in my Big Data and Cloud research I have been undertaking. The paper is called “Collective Agility, Paradox and Organisational Improvisation” by Yingqin Zheng, Will Venters and Tony Cornford, found on the London School of Economics site, under the department of Management.

Their point gained from studying GridPP and its part in the Large Hadron Collider Computing Grid (LHC) where they observed a collective, agile and distributed performance rather than seeing ‘agility’ as small-group and deliberate systems development practices often associated with ‘agile’.

It got me curious. Here is my summary of their paper. It certainly offers some pointers to managing in more agile ways in complex and often disparate organization.

Collective agility is focused on the same objective: shared.

In terms of business, it means the mission is shared by all and this mobilizes each person in ways that I feel are tying agility to innovation in new ways, well for me anyway.

It is providing an environment where “unintended consequences” emerge, many positive, others less so, where random thoughts and ideas collide and through these exchanges within the community they form a “collective mindfulness” to solve these complex challenges.

Collective agility seems to require loose coupling, not heavy structures or rules, encouraging a culture of improvisation and constant ‘tinkering’ that comes from not just intelligence, trust and pragmatism but by the knowledge that lies within the community.

Collective agility needs to have minimal structure, flexible planning, extensive communication and social bonding, all working towards this coherent, facilitated and growing feeling of making good sense (sense-making) through this coordinated but distributed network.

It is totally reliant on the interactions and attention to coordination to achieve this ‘collective mindfulness’

The big “ah-huh” for me

Collective agility is about accepting what is unpredictable and uncontrollable yet working within given boundaries, actively working upon seeking out an improving performance and capability, to still perform in this circumstances of uncertainty.

Now for me, many organizations are grappling with uncertainty, volatility and unpredictable situations and resort to trying to master them in rigorous, highly disciplined ways.

This ‘collective agility’ is suggesting we go the other way, we let go, hang loose but stay collectively focused by just reacting in agile ways. Does that raise some different thinking for you, it does for me.

We are seeking out improved performance but in really agile ways across a distributed community or network. Large organizations today are regretfully still tackling thorny problems in ‘given silo’s’ and this ‘collective agility’ thinking might open up our ideas about collaborating and co-creating in different ways.

It is in the combining of performances, that tackle issues in improvised ways but within a trusted and pragmatic way. It creative productive tensions, dynamics and motivating challenges and the group feel that ‘capacity for action’, motivated to combine, share and explore together to solve the problem.

Rules, structures and organized events often inhibit and feel contrived, the idea behind ‘collective agility’ is it is more natural even within organization with established routines and strong cultures as they can bind, provide collective strength, as well as inhibit. It is seeking out the minimal structures, releasing the flexibility and bonding that can come from these routines and stronger cultures.

The when, what, who, where and how collective agility is performed

According to the authors, agility can be learnt through ‘learned improvisation’ where some established tools are dropped or removed and some ‘surprise, risk and wonder’ are allowed into the exchanges.

The atmosphere of experimentation, trust, shared goals and emotional bonds provide for confidence to grow, in sharing and learning from made mistakes, as it contributes to the ‘higher’ cause of what the community is tackling within these tough problems.

The group grows in its ‘sense of pride’ in working and searching for a higher cause and even willing to undertake unpopular tasks to move exchanges along. The motivation grows by this ‘collective agility’.

We often recognize improvisation and agility is more easily performed in small groups, jazz improvisation is often used to relate to this agility. The key is often the ambience and this can equally come from building out bigger communities to perform and exchange (notes)

The final thought is agility requires a mental attitude “to let go of control” to interact, to improvise but to seek to keep that sense of cohesiveness of constantly wanting to work things out, working consciously to keep moving forward towards the higher task.

Art and science fuse.

The authors suggest science becomes more like an art- visionary, experiential, passionate, agile and emergent. I’ve written about art and science before, see here “Renaissance comes from combining art and science for innovation“, so I can relate to this need to bring these two often separate practices into one again.

As I was working through this paper, replaying the conceptualization of ‘collective agility’, I liked the comment within the paper “agility for us is an expression of what people do or achieve, rather than what they might do or capabilities they hold

Then another important part of this paper is managing the Paradoxes

They also bring out Paradoxes and provide a helpful table of these seemingly conflicting ideas or paradoxes to build ‘collective agility’ in understanding. These are based on:

1) The paradoxes of learning: “as we struggle between the comfort of the past and the uncertainty of the future which are fundamental to the process of innovation, transformation and sense making”. Learned improvisation and reflective spontaneity.
2) The paradoxes of organising: “reflecting tensions between control and flexibility, formal and informal, integrated and differentiation denoting an ongoing process of striving for equilibrium of often opposing forces”. Planned agility and structured chaos.
3) The paradoxes of belonging: “we strive for both self-expression and collective affiliation”…but also being “self-driven, intelligent and creative people, yet they also have an acute appreciation that success relies on collaborative effort”. Collective individuality and anxious confidence.

They finish within the paper offering a useful tables highlighting some key organizational practices that help to make this collective agility work through these paradoxes.

We are constantly searching for agility to perform innovation

Agility is linked to change. Change is constantly throwing obstacles in our way. We are urged to be nimble, to react quickly, and to tackle challenges in new ways. Developing agility allows us to be in a constant ‘state’ of recognizing nothing is seemingly staying the same.

If we are feeling those around us, are all working towards the same goals, then we feel less inhibited, we may not like change but we gradually accept it. If others are reinforcing the necessary change though this ‘collective agility’ it can become a source of new hope, new discoveries, and a place for opportunity, with real excitement, full of possibilities

Gaining that critical sense of collective identity missing from many in our organizations.

By knowing “we” are collectively all working towards the same purpose, constantly having the progress mutually reinforced, allowing for clear debate but being pushed and moving forward, being allowed to freely exchange within a common purpose in ‘collective’ ways, then we are certainly are moving towards a more fluid, organizational agility.

This ‘collective agility’ might alter the ways we can tackle tough problems and work in volatile environments, that then can yield in collaborative ways, solutions that are more radical and breakthrough in innovation, something we should all be striving to achieve.

Certainly this does offer some interesting thoughts to take collaboration and co-creation further through this collective agility concept of greater improvising.

Exploring the Value Of Your Innovation Capital

Innovation Capital

 

 

 

Following on from my last post of “Place your future bets- invest in Innovation Capital” which outlined the significant contribution innovation capital plays in our economic growth, let me offer some further thoughts on its value to really capture and understand, so we can measure it within our organizations.

We have the three components; of physical capital, knowledge capital and human capital that are the innovation-related assets, these make-up Innovation Capital.

I have been arguing that innovation capital draws from the core of intellectual capital and its suggested (and broadly recognized) components of human, structural and relational capitals or social capital. I have previously discussed this converging up, as the ‘nesting effect’

Innovation capital needs assessing and measuring so we can understand the relationship between this innovation capitals (and its present and future potential) and organization performance. We need to know the innovation capital ‘stock’.

Why, well ‘stock’ can be ‘static’ and we need to make this more ‘dynamic’ so innovation can ‘flow’ from this constant renewing of our capitals and be transformed into new value.

Let me explain the innovation capital stock in (my) five parts

• It is a bundle of the firm’s resources and assets that renders complementary services in the process of new knowledge (innovation) creation and commercialization
• Innovation capital as renewal capabilities of our organizations in the form of producing intellectual properties that offer value and extracting from our intangible assets
• Innovation capital possesses attributes that make it a ‘strategic’ asset with the key lies in specifying the nature and application of these assets in relation to the new knowledge ‘flowing’ into the organization, for generating and commercializing concepts and ideas, into new forms of innovation
• The innovation capital is made up of the ‘dynamic interactions’ between the intangibles employed and ongoing development of these intangible assets.
• It is the ‘effective use’ of all the different kinds of intangibles that contribute the activity into innovation capital.

For me it is these tangible and many intangible assets that fire innovation, they make innovation combustible, to ‘spark’ new value creation.

Innovation will continue to struggle if we don’t understand its capital make-up.

Intellectual CapitalIf we don’t understand where the innovation value resides, we will certainly struggle to continue to build innovation’s position in the organization. Today innovation is still regarded as ‘expendable’, sacrificed on the altar of short-termism.

This creates a growing uncertainty, often reducing innovation down as that no real ‘sense of urgency’ and becomes ‘contained’ in discrete projects, failing to offer that real, substantial, ongoing value for the enterprise.

We simply don’t ‘unlock’ the real value of innovation. If we lack the understanding and abilities to build this sustaining operational capacity for innovation we have ongoing problems.

There is the need as its longer term goal, to be simply fully embedded inside the organization that it ‘resides’ and simply becomes indistinguishable, it becomes the operating core, constantly aligned to the strategic needs and goals. Innovation’s benefits must be outstanding and well understood.

Innovation will remain tentative, always stuttering along, lacking this absolutely organization innovation rhythm if it is not fully understood in where it generates it capital from and what new capital and stock it provides.

Actually most of our innovation capital is learning capital.

grow through learningThe more we strengthen our knowledge and value our people, the more we can generate new knowledge, build greater narratives, deepen discussions, make better connections and build our interactions out across growing communities.

The more we discover, the more knowledge we gain does leads up to determine a potentially better decision-making and value creating potential.

This should, in theory, give greater confidence, both internally and externally, that our invested financial capital is in ‘good hands’.

The power lies in the linkages we can forge, in acquisition, in assimilation and then into eventual transformation, that allows known knowledge to become new wealth-generating innovation.

Our learning capital needs to emerge and dominate future discussions in improving its quality and value contribution. We need to increase incentives for organizations and their people to learn new things or update their existing knowledge.

We need to learn how to articulate knowledge in its acquisition, assimilation and transformation and that comes back to understanding absorptive capacity.

Managing organizational learning and innovation, more ICT is needed.

ICT InfrastructureTo successfully manage innovation capital and understand the make-up of the intellectual assets, the new main role of ICT is pulling together Web 2.0/3.0, collaborative technologies, social networking tools, wikis, internal blogging and knowledge capture, so as to help people share this growing body of knowledge through common platforms and electronic storage.

As our social networks expand they become the vital source for intellectual capital and innovation understanding. These relationships and networks need to be fostered, constantly measured in their value and contribution, structured in ways to communicate and interpret outcomes for ‘directing’ future value creation.

The whole promising ‘wave’ of collective intelligence, social networking and building real useful communities of knowledge is a real challenge today to pull together. It is becoming a crucial factor and investing in the physical capital this needs, does allow for people to share knowledge through common platforms and strengthen the knowledge, with the human capital that innovation requires, to drive real growth.

For instance, EU investments in ICT’s are due to increase by about 25% under Horizon 2020 compared to FP7. This EU investment will support the whole chain from basic research to innovation that can deliver new business breakthroughs, often on the basis of emerging technologies.

We also need to recognize the work-to-be-done, not work already done!

Work to be done is the need for our future growth and well-being to be derived through innovation activities. These so much made up of intangible parts will provide the new wealth of organizations in the knowledge sharing economy of today and the near future.

We need new forms of evaluation to measure the real asset wealth of the organization to understand the points of intensity, their connected dynamics and what is required to reconfigure the changing capabilities and capacities needed to grow in the future. There is a lot of work to be done out there.

Shifting our investments into today’s more valued capital- Innovation

It is how much we are able to adapt to fast moving changes will determine our success. It is the combination of all the sum of our capitals and knowing what factors and assets contribute into making our innovation capital will determine the ‘health’ of our future.

I think it is essential going forward that we need to significantly increase our innovation capital focus, so it can be fully unlocked, so as to release the true dynamics within the system and structures of our organizations to realize innovation’s potential.

For me, Innovation Capital and its make-up is where we need to focus, to understand and invest into. It drives our ability to create and sustain value creation.

Place Your Future Bets – Invest In Innovation Capital

Value of Innovation CapitalRecognizing the value of our innovation-related assets is where the ‘smart money’ should go. To gain growth and to improve productivity is through innovation. We need to translate knowledge into new values.

When you pause and consider the make-up of Innovation Capital you realize it makes such an economic contribution and  in a report from McKinsey & Co, they have set about identifying this to produce the above summary, covering 16 countries, to understand the real value of this Innovation Capital.

These numbers are big and still don’t fully capture everything associated with innovation as much remains ‘hidden’ or ‘attached’ to other activities as well.

We need to shift our thinking on what makes up Innovation Capital

The shift taking place in recognizing that our capital is well beyond ‘just’ financial is rapidly altering organization investment decisions. The McKinsey approach has set about capturing a broader understanding about innovation than R&D alone.

Innovation and its value creation goes well beyond just R&D, it is made up of a broad range of intangible assets that are firm-specific and due to this, they are being recognized as hard to replicate, providing the growing edge over competitors if they are identified and invested in correctly.

In this report they considered the broader aspects of Innovation Capital capturing software, design, market research, training and new business processes as well as spending by governments and through tertiary education in science, technology, engineering and mathematics (STEM) subjects.

The value of this inclusive approach

By taking this inclusive approach to innovation spending they were suggesting allowed them to document better the investments underlying innovation, to see the greater “innovation infrastructure”

We are clearly seeing the continued increase in the valuations given to certain organizations, up to 80% of the value is coming from the intangibles, with the vast majority of our business organizations are really slow in getting to grips with identifying what is making up this value in their premium.

The urgency for us all, each organization, is to identify the investments and the returns as the innovation impact offered by McKinsey’s report is delivering a significant business case for understanding and recognizing the strategic importance of identifying and developing all your innovation capital.

Just go back and re-look at the graphic above for investing in Innovation Capital for its impact and implications for each of us.

Recognizing Innovation Capital is really important

So the make-up of innovation capital is big, I mean really big, this might help generate a greater innovation wake-up call. In a report from McKinsey and Co, called “Innovation matters: Reviving the growth engine” and first presented at the G8 leaders Innovation Conference, in London on 14 June 2013. This report quantifies the importance of innovation in driving productivity growth and sets out the actions that governments and societies can take to build “Innovation Capital.”

The paper offered is stimulating the need for building the “innovation infrastructure” for our growth and as a key capability for our organizations and countries.

Where to start in specifically identifying Innovation Capital?

Within the McKinsey report they break down Innovation Capital into three components. These are:

Physical Capital is formed by investments in information and communication equipment (ICT) and across the countries analysed it represents 16 per cent of the Innovation Capital.

Knowledge Capital is formed by investments that build firms’ intellectual property and brand equity, including investments in computerized information, R&D and marketing investments, as well as relevant research in universities. It represents 60 per cent of Innovation Capital across the countries McKinsey analyzed.

Human Capital is formed by investments in building individual or organizational skills that drive productivity growth. This includes public and private investments in tertiary STEM education, employee-based training programmes and investments to develop organizational efficiencies (e.g., redesign of business processes or review of business models more broadly). Across countries analysed it represents 24 per cent of Innovation Capital.

It is important to recognize that McKinsey has captured and measured these to produce the impressive impact that innovation capital has. Is your organization identifying these for assessing their innovation capital? Most probably not.

Finding our innovation uniqueness

The make-up of our Innovation Capital are unique to each organization and highly valuable, I’d argue the report by McKinsey on its contribution is still significantly understated but a terrific step forward in attempting to quantify it.

It is the pivotal role of people as innovation carriers – their networks, collaborations, knowledge flows, interactions and tacit knowledge – and how innovation itself is a potent competitive force that drives productivity. All this is often ‘hidden in plain sight’ as our people are innovation’s active ingredient, the catalyst that turns novelty into real benefits.

Innovation capital is the big win if we can harness it well.

 

Building upon four key wealth creating pillars

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Recognizing the combining effect of the four pillars

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

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

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

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

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

Absorptive Capacity, Knowledge Management and Innovation

Source : Haas Leadership Initiative

Let’s start with some defining statements. Innovation is totally dependent on becoming aware of external ideas and innovations. We can ‘fall over these’ or we can find ideas or concepts through explicit search. Then to translate these and turn them into something new and different we need to have established some sort of diffusion and dissemination processes. Having this established as a sustaining system provides an essential source to building organizations capabilities and competencies.

The more we work external knowledge the more we potentially enhance and multiply its value from a single idea into the potentials for multiple innovations. Having a systematic framework can be dramatic for generating new knowledge and gathering ideas for new innovation potential.

Throughout this post I’ll link into previous posts that you might like to explore but this is not necessary.

The issue is how we set about adopting and adapting new knowledge.

Each organization we work within collects its knowledge in different ways. Each has special characteristics, systems and ways to set about doing this. Often finding the knowledge is highly random. Many cases the knowledge we are searching for already resides in the organization, sometimes when we go outside we find one of the paths of this knowledge actually leads back inside our own organization. When this happens it leaves us puzzled on how and why this happens.

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

Adoptive Capoacity Steps 1 The value of absorptive capacity is that when organizations have some prior knowledge they are more receptive to adding new understandings and new ideas.

Organizations that encourage and set about learning consciously set about the search for new ideas and by having this already established ‘learning’ are far better at recognizing new ideas that might lead to innovation.

These organizations develop deeper understanding of integrating and experimenting this new knowledge and set about placing it in a new setting, concept or hypothesis, to push this knowledge forward into new innovation. They are consciously advancing learning.

This gaining of continuous knowledge encourages constant learning and this has a positive feedback cycle as it builds the capacities and capabilities for future innovation activity. Absorptive capacity, once recognized and established as a system promotes the search for new knowledge that greatly increases the capacity to make the necessary new connections for new innovation to happen.

For this to happen, it does need continuous focus. If organizations take the alternative route of wanting to squeeze every last drop out of the existing innovation activity or research department, organizations over time develop as bad learners, they begin to ignore, to assume they have the knowledge and get fixed in their mind sets. They fail to absorb, they tend to reject and take on increasingly that “not invented here” syndrome. That can only last for a limited time before ‘innovation decay’ sets in, people leave and the knowledge often goes with them also.

The problem also can lie in too much knowledge

The other vital part of understanding absorptive capacity is its terrific benefits for diffusion and dissemination of ideas. As the knowledge we glean from outside comes inside it can confront, it can challenge the “what we know”. It is at these times we must stop the initial reaction of “let’s reject this” and allow time for a deeper evaluation, making sense from this different perspective. Looking through alternative lenses helps here.

Organizations are always in a hurry. They design innovation pipelines to get narrower and narrower. They want to quickly dismiss ideas that don’t fit in their norm, the system is poorly equipped to handle different, more challenging thinking, yet this is the very place radical, breakthrough and disruptive innovation ‘sits’. Organizations must find better ways to resist allowing knowledge pathways to become narrower before the knowledge, insights and potential connections have been well absorbed.

Allowing a greater access to new sources of knowledge, discussing emerging innovation concepts by diffusing the understanding does allows for increasing those ‘real’ connections where something really different beyond the existing can be shared as emerging.

It is allowing the absorptive capacities to fully work through the knowledge gained, to improve your capacities. Providing innovation and your ideas and concepts extended time, you can provide for different connection points for exploiting innovation impact even more. If you allow for this additional time to explore and discuss specifically in the search for those more radical connections and outcomes, you have the potential for far more.

We do need to allow knowledge inside our organizations to flow more openly

Allowing innovation inWe need to stop the ‘cognitive blinders’ that constraints the diversity of opinion by allowing concepts or knowledge to be more broadly seen and worked upon, shared more openly. Make innovation far more open inside the organization as well as outside. Practice a more ‘holistic’ open innovation is highly valuable for pushing beyond the current incremental approaches, simply because knowledge is only residing with a few chosen people. We do need to avoid all the cognitive traps around.

Let’s really adopt open innovation, internally as well as externally. It is allowing not just new knowledge in but to allow this new knowledge to flow and be absorbed and then can be better translated into new application or worth. There are significant roadblocks within open innovation today that need resolution.

The art of harnessing knowledge lies in our intellectual capital

When we are chasing after new growth we do need to employ all our capitals. Today the dominant capital is financial, it rules the others and that stifles knowledge, innovation and the potential for being different. Financial capital tends to be based on past numbers or immediate concerns, it struggles with the future. It wants to reduce time, risk, inefficiencies and replace this with always improving the rate of return on the financial capital.

We need to think about a better way to judge ‘rate of return’ and that should be on recognizing the critical importance of the other capitals, those that make up the intellectual capitals. Broadly these fall into human, structural and relationships. They are the capitals that make up the value and provide the new generating value that are embedded in the personnel, organizational routines, and network relationships. They provide fresh capital through innovation and strategic renewal.

There is an incredible set of connections between all the parts of intellectual capital, absorptive capacity and knowledge that make for new innovation and give us the real chance of value creation. I’ll discuss this set of connections further in a subsequent post.

Thankfully some organizations are becoming enlightened

Knowledge and Innovation are engaged at the ‘hip’, they are inseparable. To separate them both would die, one feeds the other. It is through the application of approaching them through a system like absorptive capacity you can generate the flows needed to keep our search for new ideas stimulated, our innovations pushing forward and allowing others to benefit and build on this knowledge further.

If you have not considered the place for absorptive capacity and its value, it is high time you did. It might be your missing link.

Approaching innovation through fitness dynamics needs a structured approach.

This post follows on from my recent one of “the Innovation Journeyman.”  We do have a real journey still to travel to understand the dynamics within innovation. Here, I want to lay out a possible path that might advance us towards achieving this. This includes a fairly ‘intensive’ nine step approach outlined below.

The innovation fitness dynamics

The innovation fitness dynamics

What we do need to do is constantly evolve our innovation capabilities to perform in more dynamic and flexible ways. We need to acquire that consistent aim of achieving a more adaptable and adjusting approach to innovation in all its parts. We need to meet the changing circumstances and challenges  we are all facing to regain the real growth needed from our economies and organizations, making what we do at the same time, more sustainable. Delivering better innovation outcomes is central to this task.

Are we in a more Darwinian world perhaps?

I’d suggest that today innovation is caught up in the survival race, where the bolder ones are more innovation fit. We need many more organizations to get out of this survival trap and exploiting innovation in bolder ways.

So much of what we do is ‘static’ work, activities that are simply repeating what we have done time and again and gaining us little new knowledge. These activities on their own keeps us happily ‘treading water’ and does the job of locking us comfortably into the efficient and effectiveness clan mindset that most business organizations like to be constantly working in.

The harsh reality is this is becoming a very crowded, increasing uncomfortable place to be, as we reduce our capabilities to take risk, too invest, to take those decisions that create more radical innovation. The more we play ‘safe’ the more we run the risk of being disrupted. We are failing to leverage much of the liberating power within innovation. Is our business world today is it so predictable?  No, it is well and truly ‘dynamic’ and evolving.

There is an awful lot of creative destruction going on and I’ve also written previously about the Innovation Era: Creative Destruction or Destructive Creation where the replacement rate is constantly speeding up, we are facing more uncertainly and incoherence than ever.

We need to place the emphasis back on the “creative” innovation part and not the ‘destructive’ nature we have been moving towards recently. To achieve this we need to understand innovation far better than we currently do. This is partly where my exploring the dynamics of innovation through fitness landscapes comes in.

Knowing your innovation ‘stock’ and  ‘capital’ potential

We need to know our ‘innovation stock’, a large part of our wealth generating capital and where it can be best put to use. We are valuing the knowledge perspective far more and with this we are increasingly recognizing the importance of the intellectual capital that makes up the organization.

We certainly need to re-think many of the old world value delivery systems to assess organizations and make much more of a concerted effort to make innovation that renders different, unique value outcomes, that keep pushing the boundaries of strategic advantage within any business.

We need to ‘master’ our understanding of the skills, processes, routines, organizational structure and disciplines that enable firms to build, employ and orchestrate innovation as this is increasingly needed for participating in more complex open collaboration efforts. To achieve this, we first need to know ourselves and our capability to innovate, both the strengths and weaknesses.

So I’ve been busy mapping out a pathway to Innovation Fitness

Knowing your innovation fitness capabilities does provide a good understanding of your existing position and can, through a structured approach and programme, ‘point’ you towards the ones that you need to have that put you into that place of leveraging unique strengths, that clearly improve your innovation capability. These are the ones that are far more valuable and potentially dynamic.

The issue is today, do we know what are the critical capabilities to focus upon to improve the chances of greater innovation success? Each organization has limited resources to offer and it is becoming increasingly important to know where and with what these resources to maximise the capability to deliver a better set of innovation outcomes.

So within my own innovation ‘walkabout’ I made a significant step forward.

Sometime ago in one of my research phases, exploring around this subject, I came across a book written by Kim Warren on “Competitive Strategic Dynamics.”  Although I struggled on much within the content of the book, I did find the chapter headers as a useful ‘engagement approach’ for what I wanted to describe in my approach to identifying and working through the dynamics of innovation.

So after some adjustments and reworking of the activities within my ‘engagement approach,’  I came to nine steps within this process. These might change as I progress and learn but do lay out a process towards explaining, engaging and exploring how an organization can achieve an innovation fitness.

Included is a working through of the methodology to navigate and focus upon the appropriate capability points needed within each specific organization. This step process I believe gets you to the point of understanding what innovation capabilities  are a better ‘fit’ for purpose, to deliver on your innovation needs on a consistent, repeatable and evolving basis.

The Nine Steps needed for developing an understanding of your innovation capabilities to make them more dynamic.

1. Getting Started – Understanding the Needs & Imperatives of Innovation Fitness

  • Why we must travel this critical path for Innovation.
  • The meaning of dynamic capabilities and innovation fitness landscapes
  • Merging  the theory with practical reality to produce new outcomes and positive results.
  • Focusing on resources and performance – why is this important
  • The problem is knowing what we have and what we really need

2. The Fuel of Innovation Performance – the dynamics of innovation

  • A sharper, clearer focus on innovation resources to meet strategic need
  • What is known about resources to sustain, enhance performance
  • Knowing and aligning  your strategic criteria – for sound innovation approaches
  • Getting innovation within the right context of your business
  • Moving your resources in the right direction

3. Getting even more specific – quantification and qualification

  • Recognizing the building of scale, change rates and dynamics that happen over time and why we need to constantly build our innovation capabilities.
  • Developing the resources to meet the need – structured, focused, clarified by bringing out the necessary discussion.
  • An illustrative scenario for a directional innovation fitness landscape map
  • Recognizing resources can come beyond the firm and bringing these in successfully. Managing within a more open environment.
  • Achieving  mutual dependencies to support; recognizing the hindering ones
  • Being aware of  the impact of different scenarios in the management of innovation

4. Building the Innovation Fitness Machine – reinforcing feedback, identifying needs

  • Recognizing the current status, spotting emerging patterns, seeing spaces and gaps and identifying solutions.
  • Beginning the ‘adaptive walk’ to get to higher fitness points needed to compete.
  • Clarifying the complementary resources, looking to embed new routines quickly and set up follow through approaches.
  • Introducing natural tensions into the system to trigger ‘step change’
  • Resource dependence climate, culture, diversity, intensity and uniqueness
  • Reinforcing feedback – watching for dangers, managing the machine capacity, removing the brakes selectively
  • Shifting your resources need not deplete or force other people to compete for them – working through the tensions within teams and silos.
  • Matching resource dynamics with the innovation value chain & life cycle stages
  • Simulation modelling the ‘what ifs’ and ‘why’

5. The Strategic Architecture – designing the system to perform as needed

  • The step process for designing and executing the architecture design
  • Diagnosing performance challenges and road blocks – resolving, moving on
  • Lining up the solutions is not a linear process and needs careful management
  • Addressing the effects of intangibles in the Strategic Architecture.

6. The Hard Face of Soft(er) factors – the hidden power of intangible resources

  • Clarifying the impact of the intangibles and recognizing time, climate and conditions are significant contributors to innovation activities.
  • The different rivalry types: internal and external, inter department, inter projects and working through resolutions to these.
  • Reflecting feelings and expectations, addressing all the different needs
  • Measuring the tougher parts of intellectual capital
  • The real value of your intangible resources
  • Recognizing the value of hidden innovation and spotting its occurrence

7. Entering into Competitive Battle – the Dynamics of Rivalry, the Uniqueness of You

  • Recognizing, developing, capturing, transforming, avoiding and out – manoeuvring
  • Your point of choosing what, where, how and when to compete.
  • Building capabilities that are unique to you and hard to replicate
  • Building sustainability into the innovation equation as ongoing
  • Extending the turf, exploiting the situation, pushing beyond, seeking partners.

8. Building and Testing Capabilities to Perform

  • Measuring capabilities through different fitness levels and scale.
  • Learning to build capabilities as ‘ongoing’ and evolving for changing needs
  • Re-Structuring the process for dealing with the dynamics of change
  • Knowing the points of impact on performance to enable recognition and reality
  • Managing innovation performance progressively across the spectrum of business need through testing and extending capability learning.
  • Building from personal to team to organizational learning in measured steps
  • Recognizing the role of leadership, achieving strategic alignment and working on broadening out innovation competence at different organizational levels.

9. Keeping the innovation fitness wheels turning, keeping your eyes on the road

  • Resolution of conflicting goals, control and structure
  • Dissecting conflicting positions, resolving impasse
  • Knowing the limits of human engagement
  • Goals, controls and measurements can dominate and strangle
  • Keeping the measurements simple and clear
  • Managing innovation as a critical strategic resource
  • Merging the results into a greater alignment to Strategy and Approaches

The end result is looking to generate your fitness landscape

As you can see this is applying a very comprehensive approach, a fairly ‘intensive’ one. The parts within the structure might change, depending on circumstances and experiences. It is one that is more than likely an organizational wide applicable one. This might alter after some clear piloting, learning and experimentation.  Building innovation capabilities takes time; they are complex, highly structured and multi-dimensional. Any structured approach to tackling innovation takes time and considerable commitment.

Any learning involves sensing, seizing and then transforming. This is for me, still a work-in-progress, and what I outline here is not the ‘done’ deal but more a “beta” framework approach. What we do need to do certainly is to push innovation beyond the existing as innovation is today, as it is falling to live up to its promise. Knowing the critical dependencies for establishing a sustaining, successful innovation performance is somewhere we should strive towards in its understanding. I’m certainly moving down a decent pathway here I feel.

Each organization does needs to know its innovation fitness to thrive in the future

We are searching for what makes up the present system and what needs to be part of the future to create a ‘best’ innovation capability environment that is sustaining into the longer-term. Those that can be continually ‘orchestrated’ and constantly adapted to meet the strategic need.

We are striving towards a true ‘innovation coherency premium’ in design, knowing what makes up your core dynamic components. The outcomes are to know where to invest, what to dampen down and what aspects can evolve naturally and be ‘taken along’ as you focus upon the ones that are more dynamic and relevant to your innovation needs.

No journey is without pitfalls.

Finding the dynamic capabilities of innovation that ‘fit’ with the strategic needs of each organization will be different based on their own respective challenges and position. We need to stop simply copying others and create our own ‘dynamics’ to strengthen our own unique advantage points for sustaining our future. Do you want to become innovation fit?

The Innovation Journeyman

Continuing the innovation journey

Continuing the innovation journey searching for the framework to deliver the dynamics of innovation by focusing upon achieving a certain innovation fitness.

My  personal innovation journey started way back in 2001 when I got ‘hooked’ on innovation and what it could deliver in it’s impact into a business; for greater engagement within the organization and increased identification through their people, with the potential for learning and improving their capabilities.

Progressively I learnt about innovation, studied it as part of my Master’s degree and began to practice the parts others were prepared to pay me for, either to listen too, or offer advice.

This innovation journey took on a shape that eventually became 100% of my focus within my advisory practices at Agility Innovation Specialists and Hoca Consulting by systematically building my understanding of innovation and providing this knowledge to others through advisory, coaching, writing and mentoring services.

It still is a long continuous journey twelve plus years later.

I’m constantly learning, reading, absorbing and interpreting what I understand and then attempting to provide my thoughts to others, those willing to listen!

I’m comfortable in much, totally restless in so much more out there to explore and work through, so as to achieve potential solutions, through experimentation and prototyping until they become recognized as relevant and applicable.

Investigating, researching and reading all required a significant amount of time, all alongside needing to practice innovation, working to clients’ needs or pushing for their attention to changes taking place within the field of innovation management and what they needed to do about it.

Dynamic capability applied to innovation gained my increased attention

One area that caught my attention, many years back was the notion of “dynamic capability”, the organizations capacity to change its operation and adapt them to the environmental requirements in systematic and fruitful ways. Academic papers by Teece, Pisano and Shuen, by Eisenhardt and Martin and finally for me, Zollo and Winter, all fuelled my thinking at that time.

Winter suggested that organization change happens in two ways; the first is ad-hoc problem driven in our searches or the second is through the action of “stable patterns of activity aimed at creating or changing operating routines in pursuit of enhanced organizational effectiveness” offering the initial definition of dynamic capabilities. I’m up for the second, most organizations still often practice and treat innovation in ad-hoc ways.

What are dynamic capabilities?

These are the skills, processes, routines, organizational structure and disciplines that enable firms to build, employ and orchestrate intangible assets relevant to satisfying customer needs and which cannot be replicated by competitors. Enterprises with strong dynamic capabilities are intensely entrepreneurial, they adapt around business ecosystems, and they shape them through innovation, collaboration, learning and deep involvement.

I was really hooked. This started me on my hardest journey that began in 2008 around my pursuit of building a way to understand what makes up innovation capability and capacities within organizations. I needed to find a way to build, to integrate and configure internal and external competencies to address rapidly changing environments.

Much as Teece, et all, had outlined some years early the notion of this, there continues to lack decent, coherent solutions. Any suggestions I researched were often a little thin on the ground, in practical application but some of the concepts had a richness about them to sustain real interest in my continued pursuit to find a practical, enduring commercial solution to managing the dynamics within innovation. So this became part of my challenge and growing interest.

Moving from intent to cognizance and then application

So I was looking for designing something that gave a sustaining competitive in innovation advantage, that was shaped by the individual organizations specific asset position and where it needed to go and develop to get it to that stated strategic goal they required. This hinged on identifying the value points where resource configurations needed advancing once the gaps could be identified.

This journey has taken me all over the place. I have studied increasingly dynamic capabilities, innovation landscapes, absorptive capacity, where open innovation fits and then increasingly in this more open environment the need for collaboration, for networking, for orchestrating innovation to deliver what is needed, into the markets advancing on existing offerings.

My often interrupted journey was partly by design but also by lacking essential parts.

Since  the 2008 and 2009 period, where I had an incredible burst of energy into this whole area, I found I had to leave it, put it to one side for eighteen months or so. Sometimes you have to stop your searches and reflect a little. Any journey you do need decent resting and reflecting periods.

In 2011 I took up this quest again, yes quest is the right word, as it has both been long and a difficult search. I designed a framework, the innovation fitness landscape model and set up a dedicated web site for managing this at innovation fitness dynamics. This has bubbled along but was not the platform I expected or able to launch in the ways I’d ideally like. Something was still missing.

In this time I’d concluded that to identify the “dynamics” needed for innovation I’d need at least two levels of evaluation – the internal one where it seemed nine descriptors gave the necessary ‘thrusts’ to find the critical internal related aspects and the external one – more as the level of ‘degree’s’ of engagement for evolving the external related need. I was happier with the internal part, not so much with the external one.

I’ve completed some limited testing but by no means feeling I’m yet ready to really push out on this so a short period of digestion and thinking led to another hiatus until a few weeks ago.

So in mid 2013 I have taken up my innovation journey again, relating to innovation dynamics and fitness landscapes. There was a realization I was missing something. The innovation system I had been focusing upon was simply made up for the single organization and although I was consciously working on the external environment and recognizing their degree of importance, I was not  actually reflecting the really big changes going on in innovation today and in the near future, as I should have been. The changes taking place through more open, collaborative innovation. I was writing about it but not taking it fully into this dynamic framework of mine.

My recent ‘trigger’ has been the one word of “Orchestration”

I had not recognized the incredible power of “orchestration” needed in innovation. Of course it was there but it was not as ‘loud and clear’ in my thinking as it should have been. The blind spot had been my focus on pursuing this continual need to organize around innovation within an organization. Although this is as essential today there has been continued and rapid shifts taking place outside the walls and I was not capturing the dynamics of this well enough .

When we begin to want to orchestrate across external innovation networks we not only need to know ourselves extremely well, we also need to know what others can bring and what is missing. Networks are dynamic, the flow of knowledge, of capabilities and competencies all need somehow capturing. Recognizing this shift in my thinking, allowed me to pick up the baton again and begin to conduct all the different fragments and pull them together, into a different result.

I learnt also that innovation needs this growing orchestration, due to this increasing move from firm-centric to network-centric innovation. In my understanding of a orchestrator, he needs to manage the tempo, knowing where and when to cue in the different players (learning) and to inject the intensity into the performance. I was back on my journey recognizing the different passages and movements I’d been on, where all contributing into a final result. “Something” was coming together and I need to work through the new ‘score’ being played out.

We need to learn to identify, assimilate and exploit far more than ever, the value of knowing your innovation fitness, your dynamics and the terrain you wish to traverse in new innovation activity becomes even more critical. To create and to extract does clearly need to understand the what, why, where, when and how it needs to go about this.

The orchestrator needs to orchestrate.

To do this you must orchestrate the capabilities, to purposefully build what is needed to deliver the final result. I have reconfigured my thinking around what will influence the evolution leading from internal innovation capabilities to a whole ‘network’ of these. It still lies in how you purposefully build these capabilities and competencies up. Orchestration is fundamentally dynamic, full of uncertainties but the need is still to connect the parts.

The four dimensions for building capability to innovate are at the individual level, within teams, within the organization and within the dynamic set of networks needed at given times to solve innovation challenges. These capabilities need to possess mobility, appropriability, certain stability and the willingness to learn and build on the existing dynamics. Internal capabilities still need building but we also must work to identify those complementary capabilities across a fluid set of stakeholders to deliver a more complex innovation challenge.

Orchestration has for me become very important to my ongoing work on the dynamic innovation capabilities for recognizing your innovation fitness landscape and the gaps. These become even more of a challenge when different perspectives and competencies enter the mix.

We urgently need to understand the ‘dynamics of innovation’ even more. What is the local maximum, what can we work upon in transition, what we need to bring in for any future co-creation and what needs working upon within specific networks within the innovation capabilities and capacities needed to be applied.

The dynamic view of orchestrating is needed

The orchestrating of open innovation challenges is dynamic and we increasingly need to know the critical factors and their dependencies for delivering a collaborative innovation success. We need to not just know the appropriate resources, we need to work on the skills, processes, routines, organizational structure and disciplines that enable firms to build, employ and orchestrate intangible assets relevant to satisfying customer needs and which cannot be replicated by competitors, that delivers the new innovation needed through collaboration efforts.

My journey continues and I plan to outline in two separate and future posts, my journey approach for organizations to build dynamic innovation capabilities and a deeper outline of the growing importance of orchestration within managing innovation today and the future. Then I need to re-test my innovation fitness landscape framework to see if it does deliver the ‘dynamics’ in capabilities needed to extract better innovation outcomes.

At least I see an end in sight or is it a false ‘peak’ hiding the further journey I have to travel? Let’s see.