As someone who runs a small, independent consulting and research business that is 100% focused on innovation, I am always grateful for the continued involvement of the bigger consulting companies in producing sound, relevant and topical research issues on innovation. They ‘stoke the innovation fire within’, they confirm what you felt you knew but needed it to be validated. These great sources include McKinsey, Bain & Co, Booz & Co, Monitor, BCG, ADL and to a lesser degree Accenture for innovation research. There are others but the ability to have access to C-Level thinking is this groups real strength and so they come more immediate to mind.
The emphasis is on distinct capabilities for innovation success.
Recently we had the release of the annual Global Innovation 1000 from Booz & Co (now Strategy&), updated under “global innovation” and there was an increased emphasis on distinct capabilities that each company has in talent, knowledge, team structures, tools and processes that are put together to enable their innovation efforts. Booz calls this the “coherence premium”.
I regard these as “the dynamics within the capabilities that need to be fully understood and needed to be focused upon to be more successful in innovation”.
Irrespective, those big, consistent growing questions still nag away in the CEO’s mind on innovation .
“What and where do I place my limited (and scarce) resources to maximise the impact of our innovation efforts and how can I be sure?”
“What are those capabilities that generate differential advantage?” How can the CEO or CIO identify the links and connections they want to make their innovation activity align more with the overall capabilities system they have in place? Where does the CEO place his ‘bets’ to get the limited resources he has available aligned to gain this better return on the investments in innovation?
Can we identify a common set of critical innovation capabilities?
I believe we can. Something that is not as it is presently, scattershot in building innovation capabilities but distinct to what the CEO wants to achieve, knowing the capabilities that matter most to their particular innovation strategy and then in his awareness of the organizations innovation fitness learn how to improve, focus and execute these distinct capabilities needed in a highly focused manner- sound too good to be true? I don’t think so.
My work on dynamic capabilities for innovation
Over a period of the last eighteen months or so, I have been studying and researching this whole area. I have some hypotheses that need testing but the outcome of this effort to date has got me closer to believing we can achieve greater identification with those distinct capabilities to support EACH unique position.
Firstly you have to keep in mind the big four issues to think around 1) the Environment Complexity, 2) The Existing Asset Base, 3) the Value Creation Mechanisms established, and lastly 4) the Organizing Context of what innovation needs to achieve for the organization. Context for me is really important and often lacking.
The objectives behind this work are to show present and future impact of innovation.
Simply put it is to provide a robust model that understands the critical aspects that impact innovation, that can show the critical dependencies to focus upon and understand there need, so these can lead to which ones are more likely to deliver ‘greater’ growth through a more focused approach and provide longer‐term sustainability in innovation activity.
Background of why this model is potentially important to provide.
All companies talk about innovation and its growing importance but few succeed in actually doing it on a repeatable scale. What inhibits innovation? What would drive innovation success? What aspects of innovation are critical to have so innovative growth can be achieved? Where should a company place its emphasis to gain both an improving impact on its performance and strengthen its innovation capabilities?
Let me firstly outline the challenge I see.
Knowing what are the critical factors and their dependencies for sustaining innovation success is vital to understand so that an organization can place the appropriate resources behind them. The questions are: which are critical, which naturally occur when others begin to be put into place, which seem to have limited or no real effect on changing the dynamics of innovation? Knowing these answers and having these clearer to achieve a higher ‘return on impact/investment’ (ROII) has a real business value.
Today, we lack a clear system model that brings the critical innovation factors out and gives them their appropriate values of importance so resources can be allocated accordingly. Also if this can further be extended to provide the ability to model different future states and conceived future scenarios through different impact-investment simulations, this would certainly provide a strong relational tool for assessing business and innovation allocation with the appropriate resources to achieve a greater ‘fitness and impact’ in innovation to focus upon within their capability build.
Today’s challenges lies with understanding Dynamics Capabilities and the organizations fitness to innovate.
Firm resources are scarce; we still don’t understand the ‘dynamics’ of innovation, the interdependency of the parts, this framework I’m presently working upon sets out to achieve this. Which parts have greater impact, which are not so important? Innovation is still not treated company-wide in a holistic way as recognition of the dependencies is poorly understood. This is what I want to change. What and where do you place your resources to gain greater impact? What is important to recognize as needing additional ‘weight and focus’, what capability and competencies need to have a stronger emphasis and why? How can we identify these, make the innovation process more dynamic yet these embed constantly as routines? What would happen if we ignore certain innovation aspects, what would give greater impact to our business?
Why each company needs to know its Fitness Landscapes
The pressing need for a firm is to integrate, build and reconfigure internal and external competencies and capabilities to address rapidly changing environments and it is the ability to achieve new, more innovative forms in rapid changing market conditions that will emerge as the winners of the innovation race.
This calls for more ‘dynamic capability” to be achieved. The basic question that needs to be addressed is “what are our dynamic capabilities?” More importantly “which critical ones should we focus upon to improve our capabilities and competences to innovate?” Fitness landscapes provide the understanding of the existing position and then point to where to place your resource so as to improve your innovative capacity through understanding the dynamics of ALL the parts and selecting the ones that are the critically important ones for the organization to achieve their goals.
Jumping to the end result of what I want to achieve.
Progressively within this blog I can outline this concept further as I continue. Now is not the time as my work is still a significant work-in-progress, and I am searching for ways to take this forward quickly through a collaborative format where the potential partner can support and develop this further. Do you have any collaborative suggests?
All I can do at present is share the result outcomes I would like to achieve from this work:
Expected results I am seeking out of this work will lead too:
- A framework that moves towards a company-wide development program that gains identification and the target of company-wide improvement of routines and different skills required for innovation to succeed/ improve and be distinctive.
- Pursuing limited or ‘selective’ development will not have the desired effect, it is not just a human resource department exercise or individual division or team level exercise, but provide a framework that offers the real answer to innovation and why it does require a ‘holistic’ view of innovation development to manage.
- Be in a position to challenges long-established organizational capabilities and routines that are taking place by knowing where (and why) they reside and are often more ‘static’ in reality than understood. Often many of these ‘static’ capabilities are simply not valuable to further invest in, the waste of precious funds just for the sake of it, as other areas identified offer a more dynamic aspect closer to achieving the strategic results set within the corporate strategy for innovation return.
- Importance of linking capability to become dynamic with the strategy gives greater alignment and potential and can offer a clear capability portfolio where resource needs to be applied to bring new value and alignment to the organizations goals.
- The internal dialogue generates a self-reflection process for identification of true and ‘false’ dynamic capabilities and identifies the more static ones that often just need reinforcement. The solutions draw out internal discussions for a recognition and reality of the present and future needs in this area of innovation resource allocation.
- It provides the means to achieve additional resource allocation and raising the importance of these to support the strategic intent of the company and it intensifies and solidifies the studies and importance of innovation within the framework of the organization as an area of specialized knowledge.
- Results achieved from this raises the need to understand dynamic innovation capability. Knowing the importance and effect of dynamism for the growing need of greater flexibility and agility in changing, challenging times becomes a clear focus. Then through seeking routines and knowing the diversity within these choices, one can identify the basis of sound differentiation to meet different innovation challenges.
My closing thoughts here.
Can I achieve this framework; I stated that I think so. Clearly there are many variables or factors for innovation success and far too often organizations suffer from the inability to sustain innovation over time. There is a failure to fully appreciate or recognize that there are many inter-dependencies that surround innovation. We must break out of selecting innovation activities that simply appeal or are the current vogue. To generate sustaining, distinctive innovation does not have to be elusive, it is through a more comprehensive, holistic approach and recognition of the dynamics within innovation capabilities that are needed to solve your objectives. I’m working on it as we do need to provide a more comprehensive framework for knowing which capabilities are the important ones to focus upon and which are not.