The Business Model, a Canvas for Innovation’s Convergence

So where were you when this Business Design Summit was happening? Did you miss it? Well kick yourself if you are remotely interested in where innovation is evolving too. I missed going as it was a sell out fast but I watched the live streaming.  So I had a more detached view but let me give you the flavor of what is bubbling up around the Business Model and its Canvas where a new (and older) generation of innovation ‘tool-smiths’ are all converging in a growing community.

In Berlin, held at the Classic Remise Berlin on 19th & 20th April 2013, around 250 people gathered around the Business Model and started to bring together the converging aspects required in any Business Models design in tools, concepts, and methodologies.

Lucky for many that were unable to attend, the wonderful thing was that the summit also was live streamed and had a dedicated hashtag of #bdsummit. I watched it and got very caught up in the event. They plan to release the presentations and I think a whole lot more from this summit in outcomes through most probably the toolbox center to build better Business Models.

This summit became the place of the innovation ‘tool-smiths’ to meet and exchange so as to begin the forging and crafting of the new tools needed for innovation. These are aimed to help us in today’s and tomorrows world where innovation is more central within business strategic thinking.

Firstly, the Business Model meets one of today’s need

Unless you have lived under a rock, in a hermit’s cave or on a beach disconnected from the world, anyone remotely interested in innovation will have had business model innovation seared into their thinking.  Then you would be aware of the Business model canvas and the book “Business Model Generation” by Alex Osterwalder and Yves Pigneur and a core team of leading exponents, that included Alan Smith, Patrick van der Pij and Tim Clark and co-authored by 470 Business Model Canvas practitioners from 45 countries.

The Business Design Summits Objectives

The Business Design Summit had as its primary question: “Are the Business Tools you are using relevant for today’s world? It went on to ask “If you want to teach people a new way of thinking, don’t bother trying to teach them, instead, give them a tool, the use of which will lead to new ways of thinking”.

So this was a summit of different concepts, tools and a host of the forward thinking people within the world of innovation offering the parts that are converging. The different speakers offered a rich diversity of ideas, suggestions and examples to stimulate your thinking. Each speaker contributed a tool and suddenly we had born a whole new community of “tool-smiths” crafting away within innovation.

The speakers included at the Summit

These included Alex Osterwalder, Yves Pigneur, Patrick van der Pijl, Lisa Solomon, Lisa Chen, Luke Hohmann, Mark Johnson, Stefano Mastrogiacomo, Dave Grey, Karl Landart, Henry Chesbrough, Muki Hansteen-Izora , Steve Blank and Rita McGrath. Regretfully I missed one or two of the speakers as I got sidetracked within my day.

The visuals produced as these sessions developed were stunning.

Example of a visual recording, this is by @HolgerNilsPoh: A Business Opportunity Canvas by @mukiz from the #bdsummit

Apart from Holger Nils Pohl working away, I think there were lots of visual and graphic recorders busy capturing what was presented in terrific event maps. Each of these contributed and made it a visual feast. These visuals significantly improve ways to teach. More and more in our daily work, visual thinking will play an increasing part on the new tools needed in understanding increasing complexity and being quickly able to visualize it in today’s world and become part of our tool box for determining the next steps.

Some “stand outs” that I gained

It is hard to suggest one part was better than another, it was this convergence that made the event come together but for me the timely reminder by Mark Johnson on the strategic importance of the jobs-to-be-done cannot be ever understated. Jobs-to-be-Done are central to arriving at the value proposition as they should “inform” on the needs of the customer that present the new innovation opportunities, perhaps also needing new business models.

The second was Luke Hohmann and his innovation games, something I will need to explore a whole lot more. His tag line of “The Seriously Fun Way to Do Work—Seriously”.  This offers online and in-person games to help organizations to solve problems across the enterprise by using collaborative play to tap into true innovation.

Lisa Solomon who did such a fantastic job of being a main facilitator to much of the summit. She introduced her forthcoming book around Strategic Conversations and spoke about her work and teaching around innovation, leadership and design.

Of course, Alex Osterwalder had his usual high octane mix of presenting, tweeting, facilitating, just physically driving the summit along. He must be shattered after events like this, energized for what’s ahead but drained in the immediate aftermath. He was everywhere, the Innovation puppet master pulling all the strings of a well orchestrated summit.

Yves Pigneur did such a great job, introducing the BM Canvas but also in both wrap ups of “three minutes” to summarize each of the days sessions. The way he did this has some real lessons on how to recall and conclude succinctly.

Dave Gray and his evolving cultural mapping tool is yet another topic I need to climb into more following this appetite teaser “as a tool, the hammer sees everything as a nail… culture itself is a tool” where he introduces the tool steps of Evidence, Levers, Values & Assumptions. This seems a more diagnostic tool and I feel will develop the more this is progressed, improved and used.

Then the whole topic of where large corporations need to fit into this business model movement with the challenges and emerging issues discussed by Karl Landart and Henry Chesbrough. This is where the Business model canvas has to deepen its presence. The Business Model Canvas has still not fully found its way into large corporate culture, certainly not easily into the boardrooms. Time, short attention span and limited patience are real constraints. Should it- certainly yes, how it is going to happen is a real challenge.

This whole area or corporate challenge needs some real intellectual capital in solving this as it is a necessity for BMC to really take hold in large corporations. By the way, this was the best presentation in my opinion I have heard from Henry Chesbrough and I was intrigued by his emerging thoughts on providing a Corporate Conflict Detector.

Muki Hansteen-Izora( @mukiz) of Intel talked through their internal tool, a first in a public forum, the Opportunity Identification Tool or Canvas- the opportunity space is bringing their perspective into a conversation, developing up the essential components, and getting these rooted and traceable.

The summit finished with a conversation between Steve Blank and Rita McGrath around “the end of competitive strategy” Both are real influences within innovation, firstly they talked through the new playbook for strategy and where so much is due to change. The sum of this was that Organizations are still awfully reluctant to give up power, we simply can’t continue as we are, as all our ground is eroding and that long term quest for finding sustainable competitive advantage is rapidly disappearing .

Transient short term competitive advantage is taking the place of sustainable competitive advantage. This will become a “big idea” and influence our future in how we set about dealing with this. Rita is about to launch her book around this whole area in the coming weeks and I feel will “rattle a few cages” in a few boardrooms, when they read it I suspect.

Steve worked his usual magic of weaving both the start-up and established organization into much of this conversation. He provided numerous examples, spoke of the different “epiphanies” he has had on his customer process and where the link comes together in his work and the Business Model Canvas. Always throwing in the amusing story but always underscoring a powerful learning outcome.

Between Rita and Steve there was such a wonderful conversation between two deeply experienced people, full of knowledge to share, stories to tell and ways to bring these together in practical ways that you could relate too.  A great, great finish.

Are tools or ideas enough?  The world is moving really fast

My growing concern is not the enormous energy being invested in new tools and methodologies; these are good, really good, my concern lies still in the iteration process. The issue is do we crowd source these more and more, with growing built in bias, to keep improving on them as soon as an idea hits us or do we slow them down from “just being put out there” (alpha versions) to being better “beta” versions? I’m not sure when the right time is to release tools.

We have to remember Alex’s original foundation for his Business model canvas was a PhD and that was incredibly well-grounded and why it has taken hold to such a level. Steve Blank’s customer work has integrated his enormous set of experiences and lots and lots of experimentation but that comes in a fairly unique package.

Just having tools for tools sake is not the ideal place to go but tools, well thought through, placed out in the broader community to be experimented with, reiterated and improved is highly valued and needed. Finding the balance is going to be the key from all these tool-smiths.

Congratulations to the organizers of this Summit  

The Business Design Summit brought together an enormously talented group- could it have looked out into the future more, could it have debated more instead of the “tried and tested” listen and group work? Perhaps not, the group needed to begin to work together, to find a greater common language. To have this streamed was incredible and valued by us that were not able to attend. I offered this tweet to Alex:

Alex terrific day tweet.
But I do have a “what if” as my wish?

We do need to plot all the tools into the Business Model Map so we can have a more comprehensive roadmap of what tool or methodology fits where and why. I’ve love that to emerge from this summit. We really need a “live” mashup of all that is going on in a “dynamic” business model canvas environment so a growing community can all provide the next generation. I think this is where the summit has begun to provide a real momentum – the shifts we need to make “to teach people a new way of thinking.”

The next summit will be tentatively in Berkeley late this year or sometime next year.

amended version 27th April 2013

Forming the unified view on innovation design

Although we are seeing a number of cases where innovation in its structures, functions and design are evolving, we still have not achieved the mainstream recognition of innovations importance within the boardroom. In many organizations it still lacks a clearly separated ‘voice.’ Its present voice tends to be fragmented within its parts represented by the separate functions providing their narrower view of innovation.

You still have marketing, research, financial, strategic development all offering their unique views of what and where innovation can contribute. This often ‘fragmented’ approach reduces the promising breakthrough effect of innovations potential contribution.

By not having this comprehensive and cohesive viewpoint articulated at board level by a fully accountable person, the Chief Innovation Officer, innovation often stays locked up in one position or another. No one is stepping in and unlocking its full potential from a holistic viewpoint, totally responsible for innovation by structuring it, for adding real scale, giving it momentum and growing sustainability but more importantly driving it throughout the organization from the top board room perspective.

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People, motivations and a well-designed innovation framework

We still do not seem to understand all the linkages that make up innovation. We just continue to struggle because we don’t connect all the essential parts together. We need too. I think there are different components that when combined can form the innovation ‘glue.’

Let me suggest some that can be combined well within a broader framework I think is emerging from work I’m currently working upon and being conducted in a collaborative effort showing increasing promise.

People are the last great innovation frontier and great connectors

People are essential across all of innovation and its useful production; innovation does not work unless you have full engagement, commitment and desire from the people involved. Everything else we provide in tools, techniques and methods only enables and supports that one vital cog in the need to turn the innovation wheel, our people, and their commitment to ‘generate to innovate’.

Innovation is the last people-centric process.  While many other business processes or functions have changed consistently over the decades, innovation has been placing more demands on its people than any other business process or function and as yet, we cannot automate this. We rely on engagement, on relying on people wanting to be involved, sometimes we simply just seem to hope with the lack of support or encouragement they often seem to get!

How do we make this happen?

We do try to support our innovating people through attempting to automate the innovation idea process as we require them to generate ideas, to evaluate ideas, to judge ideas, to select ideas and to develop new products and services from the original mass and deluge of idea generation, that can seemingly be kicked out from a plethora of search options.

How we then set about managing these through the innovation process always does need a lot of human intervention and sorting.

Automating the process can only go so far.

We must provide real, powerful linkages that associate what we see with what is needed to be achieved. Alignment to organization goals can be terribly illusive if we don’t have really good innovation frameworks and understandings. We often generate innovation just for the ‘sake of it’ and this is a real pity and can produce gross under utilization of the assets we have available, to make our innovation efforts really count.

Little of the work associated with innovation can be truly automated, and much of it requires active, engaged, trained people in order to do the work effectively, otherwise it labours and dies in the back of some research lab, or buried in some files held on a marketing person’s computer

So are we providing motivations enough?

Innovation, however, should ultimately result in benefits to the organization and this is where we often get a little caught up. We focus on the organization not the people who make it up. We tie metrics and measures to broad organization goals and let’s be totally honest, do those buried in the boiler room relate, honestly?

Of course offering benefits or incentives should align to strategic goals, and therefore can be measured in terms like revenue growth, share growth, market awareness, clear differentiation from competitors’ products and services, recognized leadership position in a market place and many other factors.

Yet it is of more importance to establish clear innovation goals that are far more touchable,and pertinent to our own working domain. We need to work far more on  constantly evaluate innovation returns on each persons contribution within their immediate space, using measures and metrics that are attuned to their innovation activities, certainly beyond the ‘simple’ ROI, as many roles don’t get measured this way.

You need to measure their progress and equally drive corrective actions on their contributions that are, perhaps very granular but where the individual involved can have measured their personal contribution.

We simply don’t work hard enough at this defining, refining and realizing for their personal advancement and idenitification in innovation activities enough. We always seem to seek to consolidate the bigger picture, not break it down into the minuscule parts that contribute to the whole and really work at cascading this back up,  is it so difficult?

We measure innovation in different ways, through hard, quantifiable targets but also in how we influence and make things happen.  Executives need to shape innovation through a mix of incentives that promote inspiration, offer motivation and generate excitement. Highly extrinsic transactional drivers must be combined with more intrinsic transformational aspects.

Executives must also establish timely, appropriate innovation milestones and measurements based on metrics defined by that person’s contribution. Of course innovation metrics must align to corporate goals and expected outcomes but the intrinsic nature of innovation is far more relevant to the individual and these often motivate them far more, than ‘hard’ measures.

These hard measures are often based on, for the individual, nebulous goals set high in the clouds of the organization. We need to find out what would work on the ground, at the grass root level, to engage each person and motivate them to contribute to innovation that does delivers into the need of the organization, that is well-articulated, crafted, connected and understood for them.

Innovation that is well designed can achieve Strategic Alignment

Executives need to consciously work daily for alignment of their agreed goals, so as to fit resources and activities together in novel ways so as to ensure all the assets that can be deployed are well deployed, to their most productive use for innovation.

There is for many, a lot of effort going into this already but it often without a cohesive innovation framework. We need to look at this comprehensive approach far more.  I seriously doubt that many managers can claim they are in possession of such a comprehensive framework today that constructs innovation and fully aligns its constituent parts.

We get caught up in politics, compromise, unhealthy alliances, ambition, silos and greed all seem to often kick in, I’m sure we all could name a few others. We struggle all the time for alignment, yet it is critical for ongoing success, yet many firms lack really well thought through innovation strategies or linkages between it, and connect to the overarching strategy of our organizations.

Then we begin the chase, like the dog getting more frantic in trying to chase its own tail while going round in faster circles until it simply gives up. The smart move is in sitting down, so we all can achieve the end result of aligning innovation to your organizations goals and strategy and then really work through how to do it well and not chase our tails. We do need to apply a lot more thought to connecting the parts of innovation really well.

Alignment begins when innovation is strongly linked to strategic goals, and continues as people, activities and funding are aligned to the goal of consistent, sustained innovation.  Innovation is uncertain, unusual and risky.  The only organization that can manage innovation effectively and consistently, is an organization that is designed and aligned to sustained innovation.

Aligning resources and directing the focus of the organization is the role of senior executives, so innovation success starts with vision, engagement and commitment from the most senior executives and then working through all the combining elements that make up innovation so it can integrated into a clear innovation framework . From my research there are critical linkages that when combined will make this happen.

Can we combine all innovation elements for strategic organizational success?

I wrote recently in a blog “From a buzzword to the imperative” ( http://tinyurl.com/8wluhbz) that I keep coming back to the leadership of innovation; we need to move it from the peripheral to a more central one for innovation to be constantly successful.

Wherever possible, executive should actively engage in innovation, to demonstrate commitment. When the organization sees that executive management is actively engaged, they understand the importance of innovation, they become motivated, they become aligned through a growing identification but they need this explained, to be framed so they know where, why and how they fit into this bigger picture.

Simply by communicating the purpose for innovation, innovation successes and innovation activities are some of the top roles for senior executives but it has to be in a well worked through in some really coherent ways, offering a comprehensive framework and not piecemeal as most organizations tend to do. You then eventually get to the point where this engagement, commitment and effort brings the organizations people together and they begin to value and relate to this consistent framework.

This then becomes a common platform for innovation to be housed under and is gradually developed into the common language that becomes central in good communications and practices across organizations. These forces that combine place  innovation in its appropriate context to deliver on the strategic goals and aspirations set.

I believe we can get towards this ‘point’ with some thoughts and structures can make an enormous difference to innovation. I feel if we can gain some much-needed traction on bridging the clear leadership gap on innovation for building for the long term success they certainly seem to crave for, out of innovation, then we can generate the sustaining growth for their businesses that combines short term needs with long-term goals.

Let’s unfold the thinking even further in the coming weeks.

From a buzzword to the imperative

I keep coming back to the leadership of innovation; we need to move it from the peripheral to a more central one. This is not so much in a leader’s desire and need for innovation, which always seems well stated, but in their ability to lead it, to have it not just in their mind but in their real follow-through, in action and attitude, in their deepening engagement and involvement to it.

“Leadership for innovation can’t simply be delegated”, so tell me how many times have you heard that one? Yet it always seems to be pushed down the organization when you look a little closer. Running a day-to-day business, reacting to the events, achieving the performance to maintain the momentum, planning the future is demanding but innovation is absolutely central to sustaining and securing the future but does it really get enough of the CEO’s time? I think it should figure more in their time but how can this be achieved?

I certainly don’t envy global leaders in trying to balance all that is crowding in on them, that is making up their daily, weekly and monthly agenda’s. Something always has to give and innovation is one of those malleable parts whereas other more pressing ‘demands’ are more real, tangible and definitive and  innovation gets constantly squeezed out at the top. Regretfully for many it does seem innovation ends up as important but not urgent for them to focus upon.

The management of innovation is the management of attention.

I find this an interesting observation. Achieving the management of innovation requires the management of attention was a view outlined by Andrew H. Van, a Professor of Organizational Innovation and Change back in 1986,where it was suggested for management that “the awareness of need deteriorates and their action thresholds reach a level where only crisis can stimulate action as they gradually adapt to the environment.”

I interpret this as Innovation does seems to get gradually pushed back, on the agendas of the CEO and perhaps even the organizations, if the leader is not being actively engaged consistently in it. Nothing has changed today; we still are not achieving this innovation attention.  It slips down their crowded agenda’s as they deal with countless issues running a business. If their organization is in that crisis then innovation will have certainly have grabbed the CEO’s attention but by then it is often too late. We do need to manage innovation more strategically.

How can we change this?

Clearly what comes towards the CEO in ongoing issues does not go away, it only seems to increase in pace and complexity.  Of course, we can call for the CEO to clear the decks and embrace innovation as central in everything they do. I think this call for his attention is not wrong but possibly naïve with what is on their plate to manage.

Where we can demand in their attention is in providing a deeper personal commitment and clearer insight into their understanding of the need to structure innovation to all its necessary alignment points, so it can deeply integrated with the strategic goals looked for. For that to happen it needs articulating somehow.

Influencing and shaping innovation

What I’d like to see is a way where the leader can influence and shape the core structures required for innovation and provide the building blocks for the organization to work within. Something that sets out expectations of where innovation fits within the growth plans and defines critical areas that are essential for innovation to link into the strategy and organizations vision.

Perhaps you can call this an innovation foundation document; perhaps you can take this even further and shape it in a more exciting, compelling format that frames the linkages and synergies between strategy and innovation, between innovation and capabilities, between culture, the environment, the process, routines and how it should all be governed.

How about a leadership alignment framework that articulates where innovation fits?

Something that addresses the critical aspects of innovation to gain a crucial alignment across the organization that provides the strategic underpinning to performance. Its aim is to promote the freeing up of people by taking away many of the debating points around innovation and replace these with a strategic framing recipe, one that looks for the organization to use it, work within it and operationalize it.  This can be dynamic in that it ‘cascades’ up and down the organization as a communicating tool, it also becomes the meeting point to work through, the common language mediation that innovation so desperately needs for all to identify with, as well as the place to offer improving and evolving leadership engagement and guidance.

Can we ask for more?

The leader’s role is to provide guidance, strategic guidance, as well as to offer inspiration and clarity to capture the real essence of an organizations desire to innovation. If we can secure their attention through this strategic framework then it becomes their commitment document towards innovation.

If we can find a clear way for them to combine both the articulating and nurturing they believe is desired for innovation, so it can flourish, as well as offer specific ways to drive and measure this, we are heading in the right direction. Then I think we achieve something important. We draw the organization in and build the innovation activities around common and essential focal points. As we ‘grow’ the CEO’s involvement and attention through this suggested mechanism, this will have a significant impact on identification, commitment and understanding that will resonate throughout the organization and perhaps become more empowering to all.

A goal and its realization

Achieving a framework that builds structure, outlines both the intrinsic and extrinsic aspects and offers the overarching common communicating language is certainly achievable. Something that is clearly articulated from the top,  then cascaded down the organization for it to be further ‘fleshed out’ within the organization, would immeasurably help innovation in the alignment to strategic goals and required attention.

If we can provide a framework that can align, that can engage, and can offer a common set of references to refer too, clearly provided by the CEO and his team, then this surely would be a valuable contribution? It would bridge that often missing element of conveying the top managements desire and commitment to innovation’s momentum. This will work down the organization to plug into and generate that much-needed identification, to energize innovation as the ‘force’ essential for growth.

I want to discuss this further in the weeks ahead as I feel we can gain some much-needed traction on this as there is a clear leadership gap on innovation, no question. I think there is a good solution. Innovation does require a constant communicating and guidance from the top and in providing an innovation alignment framework of how this all is interrelated, we can achieve the attention of management strategically and that could be a huge thing.

The Case for Re-engineering Your Innovation Process (part two)

There are a host of reasons ‘renewal’ might be needed to be explored as part of a more radical redesign of your innovation system. Today, when markets are especially tough, looking long and hard at what you have and jettisoning what you don’t need becomes essential to reposition yourself as leaner and more flexible, far more agile.

Looking to be capable in incremental innovation is simply not enough, we need to be at the same time achieving more distinctive and breakthrough innovation. This is the higher demand point that is expected from the innovation system within organizations,  and regretfully this is not happening as much as it should.

There are many pressing needs why organizations have to ‘shape up’ and make some adjustments to their innovation activities. One of these is simply don’t ignore the need for looking to explore a re-engineering of the innovation process. It can really make a lasting difference to the fortunes of the organization.

Herein this second part of the case for re-engineering are some thoughts to offer and support this call for a more in-depth look at redesigning your innovation process.

What is valuable, what is not?

What does give you real value within the existing process? What are really non-added value activities that have been implemented over time to defend, to protect, to layer on the existing? Perhaps having a fresh perspective, driven by changing market conditions, you can challenge many present activities as work that might be unnecessary, as you make a greater focus on optimization and speeding up, consolidating activities, as part of your needs to adjust and meet this market change that is happening at present.

The need for focusing on new responsive outcomes not just task or unit inputs and process outputs does need radical rethinking.

To be more responsive you might need to place into the innovation system a higher sense of urgency, of reducing time to market, of delaying certain decision points closer to the end. You need to be more adaptive to these changing market conditions and this might need some radical rethinking by challenging existing practices and norms.

Firstly what is achievable within the existing system?

What is possible with leveraging different technologies, collaborative platforms, more flexible structures and exploring synergies across the whole innovation system? If you were able to cut across existing boundaries, changing existing controls and constraints presently imposed and challenge the existing structures, what would that achieve?

Of course you begin to challenges sensitivities, threaten personal silo’s and comfortable routines built up and nicely established, you challenge existing attitudes.  All of this has increasing ramifications on existing structures so you have to move cautiously and in thoughtful ways.

Focus on those that might be effected most, that can block and challenge, then set about to offer them a clear alternative. One that they can see a different potential and ‘richer’ promise than often just the protect and defend of the daily grind. You need to paint an inspiring vision and some details of the journey and outcomes expected. Get them involved, excited and wanting to change, those that don’t, well it just simply will get harder for them to block real progress if you can gain real momentum and early success is quickly seen and felt.

A more radical rethink needs a reason

When we are evaluating the existing business processes, there will always have a certain structure and measured set of activities within it. These are designed to produce existing acceptable results from a set of particular outcomes that might have worked, but I expect, really expect, you were not really happy with the results, it seemed to give a certain disappointment. If you are truly dissatisfied with your innovation outcomes then you need to see these existing systems and structures as an obstacle and barrier to a different innovation path.

It is when the dynamics change, then you need to be alert and ready.

What if you needed from your innovation process, the shift to a real need for building in agility and higher market responsiveness for example? Changing the existing process is unlikely to work it needs re-engineering. You certainly don’t just change just for the sake of it, this does not make sense but changing it for a new strategic purpose does. If you markets are changing, if we are moving towards more volatile trading conditions this provides the strategic intent and motivation to change.

Are you ready when the CEO enters your office and expects different innovation?

In the coming months and over the next few years CEO’s will be finding their way to your executive office, more and more. Or equally to the marketing teams office or R&D centres, demanding far more from innovation. As responsible for managing within the innovation system do you have you a complete ‘handle’, an in-depth understanding, of what is truly possible to respond to this increasing demand from the CEO? Not just knowing your existing innovation system and structure but what are the possible options and ways to rise up and respond to a new set of challenges?

I would suggest that you should be already working on it because the way we are all doing business today, is certainly about to change, if it is not already under-way.

It happened to me some years back

I recall one event many years ago when it was expected to improve productivity within the system by 15 to 20% in the organization I was working for.  Admittedly not the innovation system but the whole organizational system. I had to go out and deliver this as my area of responsibility across a global operation. Equally there was a further demand to reduce operating costs by 15% and standardise the process so it could be understood and totally visible to the CEO.

The outcome delivered was 25% improvement in productivity and 25% saving in operating costs to channel differently. Both outcomes allowed for increasing throughput desperately needed and holding operating costs so as this allowed us to channel much of this to different new value adding activities to raise performance even further and drive through more volume.

It took a significant amount of time, commitment and resolve to alter structures, systems, processes  and the mindset across a global organization that had been very defensive in its local organizations. What it did do is radically altered the market competitive position of the total organization and gave the customer more of what they wanted, a guaranteed delivery to his desired needs when it was expected.

Why can’t these types of results be applied to the innovation system you have?

Don’t be dismissive simply because my example is a business process re-engineering one, what do you think innovation has become? It is a business process, with its entire supporting infrastructure, systems, management structures, processes, controls, culture and practices. Recognize the beast that lurks across your organization called innovation in all its forms, it can make or break you, it is that important to your future.

Innovation needs to find slack, it needs to utilize technology, it needs to find new ways to combine and explore. To achieve this you need to engineer time, to save on your existing costs, to improve on your existing process and to allow for experimentation, fresh generation of ideas and concepts and allow for the three ’S’ needs. You need to stretch, to scope and too scale differently on your innovation activity if you want more real distinctive innovation breakthroughs that truly accelerate growth.

What are my three big imperatives (BHAG’s) that push you towards re-engineering innovation.

  1. We need to improve the operations around innovation. We need to improve the formal and informal aspects of managing within the innovation system. We have to adapt our organizational structures to improve the balance between local and global responsiveness. We need to capitalise on all the information systems, communication technologies and infrastructures we have introduced progressively over the years and not harmonized or integrated fully. We need to account more for open innovation. Finally we need to look harder at what adds real value and what doesn’t and rebalance the two
  2. The scope within the operations is increasingly complex and we need to reduce this. We need to build more scale where it matters to outperform competitors and outperform in (deteriorating) market conditions. We need to add flexibility, we need to maintain a standardization in approach, we need to add a higher risk profile into our innovations.  We need to share in a more inclusive innovation strategy and we need to maximise our global processes to help deliver in reducing time frames. We need to make innovation life simpler.
  3. The chance to build fresh capabilities into your innovation systems. When you need to reconsider innovation beyond the existing incremental you have delivered you need to find compelling value propositions. To achieve this everyone involved needs to lift their heads up and find some solid, decent time to be allowed to think through this challenge. Knowing the (changing) innovation strategy and the need, being more included in this dialogue, adding their personal insights built on solid market understanding and not just through reliance on other people’s focus reports. Having a growing sense of trust that the outcomes of any re-engineering will release them.

We need to build  new competencies and capabilities into our innovation system, so as our people engaged in innovation can be able to contribute to improving more helpful processes for them to do their job and, feel engaged in a more compelling work experience. A place where their contribution is truly valued and seen, feeling included and able to ‘freely’ reach out across internal and external networks. Placing real trust and investing in the skills will open up individuals to want to take on new experiences and challenges. They can see they are making a real difference.

So any first step is to see and then respond.

So what do we really need to do to seize emerging opportunities quicker, at tomorrow’s new innovation speed?

Six simple opening steps to begin to think through

  1. Redefine our need from innovation
  2. Sketch out an opening road map of how to tackle any re-engineering of innovation
  3. Identify some opening improvement opportunities that can really galvanize change and significant for the organization can get behind.
  4. Take a hard look on what you need to achieve for any change like this and what it means in efforts and resources. Often not as much as you initially think.
  5. Begin to organize and draw in a team that can undertake the redesign and can share in this. This calls for expertise but seek out a real diversity of opinion but can all come together as a united team once the debating has run its course and results come in.
  6. Seek a growing commitment from those around you, determine the appropriate approach and be ready to clear the decks and take the initiative out of your office into the heart of the organization.

So, concluding my opening case for re-engineering innovation.

As I suggested in my opening remarks in part one of this, innovation as we know it today is grinding to a halt for many. The existing treatment and values we offer in innovation’s name are tired, over worked, often over engineered and under delivered into the market place to make real difference.

We need to radically re-engineer the innovation systems and structures to offer a better value from all the innovation activity that is going on within organizations. In  not recognizing the crisis within, is not providing the opportunities to explore & extract the best opportunities we can deliver to meet our customers needs and what markets are looking for in growth and stimulus today.

We have available more means at our disposal to move from the existing to the preferred than ever before. Innovation needs to go back to being the real option for significant growth by offering something that ‘wow’s’ the consumer and creates fresh new markets, found by tapping into the unknown needs and jobs-to-be-done that our consumers are trying to achieve with the existing products and services but failing.

We are in volatile times or heading towards them. The markets and consumers requirements are changing, much is by being forced into making change and they, our consumers, don’t like that. So we have to find different ways to meet these changing conditions with radically altered approaches within our innovation management to respond and be more agile, to draw the consumer back in.

Without question we do need to put back the ‘wow’ factor back into innovation if we want to first survive and then begin to thrive in more compelling ways and in tougher times.

There is a time for this need to re-engineer what we do in the name of innovation and this might actually be that time

The Case for Re-engineering Your Innovation Process (part one)

Real innovation is slowly grinding to a halt in many organizations. If the top leadership are not totally engaged in driving innovation it struggles, it grows in complexity; it gets bogged down in the internal politics of self-preservation and delivers only a ‘watered down’ end result, seen far too often to be a lasting sustaining solution, which it is plainly not. When are we going to recognize that innovation, as we have it organized within many organizations today, is failing to deliver on its promise of providing the growth expected and so often talked about by the CEO?

Larger organizations, let’s face it,  are so caught up in the incremental trap. Risk mitigation rules at every level of the management of innovation, as it ‘churns’ slowly through the complex innovation process, built up over the years. If an organization is totally happy with spending all its knowledge and internal resource on providing incremental products to its customers and gets away with it, then fair enough but does it have to be so?

Alternatively, if shareholders, customers and competitor’s sense there should be far more, then the organization is travelling a road that indicates the pathway to decline. The worry becomes simply, can it reverse this mind-set of incrementalism and risk mitigation in driving its innovation? There is a different pathway on offer but to travel down it, you have to think about some serious form of radically altering your existing innovation structure and processes.

Much has happened in innovation in the past ten years.

Often you wonder if any new understanding really has permeated through the outer skin of some organizations, perhaps with the notable exception of open innovation. We have greater technology, software, and understanding of systems, people, and structures than ten years ago. We are better at measuring innovation in inputs, throughputs, outputs and outcomes or have the potential to do this. Of course, that is, if we chose too.

The real issue for me is that much of this potential, these potential advancements are often seemingly being ignored, or certainly not fully leveraged. We just keep adding more and more on top of the existing systems, instead of stepping back and looking for a more radical redesign, one that can change the innovation dynamics. The one that transforms and goes well beyond our existing slow growth reality, seen today based on present performance of so many. The extra margins of profit today are more likely to come from reducing not enhancing.

So why do I argue we need some radical re-thinking of how we manage innovation?

Well most of the economies are flat on their back; the money in the pocket of the consumer is dwindling and less certain than in recent years. Many of our larger organizations continue on in their juggernaut fashion, believing they are that irresistible force that is indestructible and that they can keep on going offering increasing extensions to existing products, passing on higher prices expecting those higher sales. Will this last? I doubt it.

They are busy chasing higher revenue, not so much in existing markets but more by expansion into new markets. Much of the existing market activity is quickly negated by competitors, which stalk every move and cover off any short-term advantage to try to regain the status quo. Layoffs, reductions across the board just continue to eat into the very fabric of the organization to extract profit, often at the price of real innovative growth.

Organizations are increasing their complexity by the very nature of the business model they are pursuing.  They are reducing decision-making away from the markets and the field and centralizing this, therefore requiring the building up of the necessary controls to make sure there is compliance and fulfilment of these decisions. They are increasingly remote and losing the very trust of many of their employees by this ‘drip by drip’ set of actions.

Complexity comes with a growing cost.

It is slowing everything down. More people are spending all of their working days coordinating and justifying more than ever. The productive person, seen before to be the one producing something new or different is today plainly different. They are more likely seen as dynamic by the way they respond to requests, the way they communicate and coordinate, the way they chase and monitor. They shut down more in creativity by their need to satisfy growing demands placed on them.  Organizations are employing hundreds, if not thousands caught up in feeding the machine not driving the value-adding process. We spend increasing more time in seeking out efficiency and being more effective but effective at what? Certainly not on working with great innovation in the majority of cases!

The need to shift from efficiency to agility for innovation

Our focus is on efficiency and control, delivering more and more incremental better products, trying to stay one step ahead of competitors. By being in increasing control by planning and knowing your outcomes well ahead of the real need you are running your process to minimise risk and variation. The need is to have constant visibility and anticipating obstacles by employing the means to make this happen, being in total control, taking out uncertainty, taking out experimentation and replacing it with certainty. Six sigma enthusiasts must be delighted.

What if we changed this?

We want to bring in agility, the ability to adapt quickly to changing market conditions, to lead market change that increasingly shows signs of volatility and uncertainty. Would our existing ruthless grinding execution machines be up to the different challenge? Challenges like building in accelerating effective exception handling, separating the prevailing present business and application logic to be driven by different innovation logic of rapid, more radical, responsive product and service offerings that provide solutions that get closer to meeting some often radically changing customer needs. We need to be looking to take greater variation and turn it into a market winning advantage.

To achieve greater agility we need to cut rework, we need to seek faster problem resolution and reduce cycle times way down, reduce downtime involved in waiting for escalating decision-making of the past, minimise any backlogs and combine current innovation into bigger big bang solutions that can cut through market uncertainties to maintain your share of wallet, mouth or band width. We need the principles of Six Sigma but with distinct differences.

A corporate culture dominated by Six Sigma management theory will be primarily incline toward inwardly focused, continuous improvement types of innovation activity — process, customer service, systems, operations, and so on. The aim is small, incremental innovations that really can add up but only can go so far!

Seeking a more entrepreneurial environment

A culture that fosters disruptive or encourages distinctive innovation is going to be more entrepreneurial, more outwardly focused on new markets, technologies, and business models. The goal is to find big new growth platforms that add significant chunks of revenue and profit.

Innovation is uncertain, unsure territory and requires sometimes a significant level of unstructured thinking to spot the emerging patterns and opportunities; the innovation system needs to build this in as slack. We need to ask the underlying question is whether the discipline of process management will fertilize or strangle those new ideas that come from light-bulb moments of brilliance”

The need is for a different orientation

We cannot make money without innovating for growth, and we cannot save money by not having efficient processes. What we need is to strike a new balance from what we know that works and what we know is questionable if the activity does not have a real value add component to it.

The task would be to re-invent how we work to carry out this. We need to focus on the fundamentals within our existing processes and even be ready to tear down many of the current ways of managing innovation within the business. We need to seek solutions from a fresh perspective. When you begin to question you begin to re-engineer.

Part two, published tomorrow, will delve further into this case for re-engineering innovation.

The dark side of the innovation moon

Ever wondered what is on the other side of the moon when you look up towards it? Do we really need to look beyond our own horizons in our daily lives? Should we question beyond our existing horizons in how we go about innovating, to explore, to push ourselves into the unknown?

What about the other side, the darker, unknown side of the moon. Are you ever curious of what lies behind what we can see? I certainly am.

Innovation is perhaps like the moon. We only see a part of it wherever we stand, we appreciate that part and value what we see and work within. It is even better if we can repeat it again and again. It can even offer something reassuring and comfortable, we grow comfortable within our own known borders of innovation activity.

What happens though, when we suddenly face a crisis? Or our innovation activity that has happily gone on and on, is abruptly questioned due to some sudden changes in the market place? Then we often enter the unknown side, the darker, murkier side of innovation, where uncertainties lurks, this is like maybe the other side of the moon, out there but not part of our ‘seen’ world until now. It unexpectedly challenges what we know and leaves us vulnerable and uncertain. It also prompts us to be curious.

The issue becomes, what is the power of knowing that darker side of the innovation moon beforehand? Maybe it is the explorer within us all. Knowing whats actually out there. Understanding as much of the whole innovation moon would be good for many of us but we would like to do this safely within our existing comfort zone. What we would ideally love is not just a glimpse of the far side, that darker, unknown side, but a chance to visit it, just to see if it is something for us or not. How can we do this, can we prepare?

Visiting the dark side of the innovation moon

I think we all do need to gain a really good glimpse of the total innovation moon. It would help us to be better equipped to be ready for different eventualities that are more often than not, coming our way in unexpected ways.

What can be provided that allows us to move around innovation with more confidence, to experience it, to explore it and then become eventually more comfortable with it so as to work all sides of this innovation moon?

To orbit the innovation moon we do need to rise up and go beyond our day-to-day lives. We need to look at innovation in its broader context; we need to understand all of its inter-connected parts. So much of the innovation moon often remains in mystery, the side that faces away from us.

Part of my job is to encourage you to not only leave your comfort zone but to attempt to offer the framing techniques and approaches to equip you for deepening your journey onto the darker, less known sides of your innovation understanding.

How can we explore all the potential within innovation?

We should ask of ourselves, what does block out the light, the understanding of gaining a fuller understanding of innovation. Is it a lack of time, of incentive or it is not simply part of our job, the role expected by the organization we work for does not want us to be curious? We need a way to freshly connect, to relay and make exploration, to feel like we can make a safe venture. To do this we often need permission to go beyond our existing horizons.

Equally we each have to ask ourselves what and where are the dark sides of the innovation moon for us? Why are these differences on the side that faces away from us, the unknown sides of the innovation moon? We do need to open up and seek out far more.

This blog site was deliberately set up to help in this, along with my advising, coaching, researching and consulting work to help you in your innovation focus. I’m trying to add the ‘innovation fuel’ and essential frameworks and equipment to help you explore innovation with growing confidence and continued support.

The power and force of the dark side has growing attraction

The difference that can be made is distinctive innovation, breakthrough and disruptive innovation. This is the attraction of exploring the dark side of the innovation moon, it is what investors and your organizations are looking for, that makes you stand out and be different. You have pushed the boundaries.

Those creative forces, the unique breakthroughs, the distinctive products, services and different business models that allow us to break free of the pull of the gravity that often holds the majority back, that is the attraction of the dark side of innovation. This often require us to move out of our comfort zones, be pushed to explore the other side, the far side of our thinking.

We all are in need of making fresh moonwalks.

To understand the whole innovation moon we do need to make moonwalks. We need to explore, we need to map out the terrain. I think we need a new model that tackles innovation so it can articulate for all and becomes the innovation roadmap that communicates to us all in a way that makes clear connection. We need more help in reducing uncertainty and replace it with something that gives us all a feeling of being part of something bigger and more exciting, something we want to take part within.

We all need to visit the dark side of the innovation moon. I am more than happy to walk alongside you, actually I’d welcome it, as we all gain a new perspective when we do make any journey.