Innovation is like a tropical rainforest

Innovation is like a tropical rainforest

Innovation is like a tropical rainforest

Recently I have been asked about my innovation activity ‘going forward’ and I described it like a forest needing some fresh attention. There is my need to cut down certain trees, clear away a lot of the floor covering to allow the sunlight in and permit those ‘selected innovation tree’s’ to be allowed to grow stronger.

We all have those times where we need to choose, to pursue clearer pathways we believe are better for us. To be more selective in what we do, to be more focused and hopefully achieve a better, lasting result that hopefully offers a more satisfying set of outcomes, to both clients and to ourselves.

Within this comparison I am presently making of innovation being like a forest, I really began to see so much more of a connection in what is happening around in innovation that it can be compared to understanding a tropical rainforest. There are many comparisons, let me outline some of these here.

The ecosystem within the rainforest is also needed for innovation to work effectively  

Firstly I would argue that innovation, to be managed well, needs to operate like an ecosystem, the same as a tropical rainforest. Ecosystems to flourish need to experience critical feeds, in the rainforest this is high average temperatures and significant rainfall. Well innovation to thrive needs equal attention; it needs a real focus, above average and significant attention to be well maintained.

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Designing appropriate tension into the innovation process.

I’ve always loved this: “appropriate adaptiveness is not a natural tension- it has to be designed.” OK, I can hear you quietly sniggering.

When you are dealing with the innovation process you naturally have tension. Often if you have no tension or simply too much slack built into the process, you don’t end up in achieving a good result, it falls well below expectations. it is often this lack of designed-in ‘tension’ that is not appreciated like it should be within the innovation process. The wrong tension is left to eat away at the innovation process.

Firstly a cautionary warning here.

Now this is about to get into the realms of theory but I hope you stay with me on this. Why? Well knowing why innovation does fail can be useful (to your future) and what you can design into it, so as to reduce this risk has some value, I would think. So tune out or hang in- your choice.

Using theory often helps- really!

According to Professor Clayton Christensen the only way to look into the future is to use theories. “The best way to make accurate sense of the present, and the best way to look into the future, is through the lens of theory.”Good theory provides a robust way to understand important developments, even when the data is limited. “Theory helps to block out the noise and to amplify the signal”.

The theory of innovation helps to understand the forces that shape the context and influence natural decisions. You should consciously design in tension into your innovation process.

Let me explain this in its different parts.

Coherence in purpose & consistency is what we all desire

It is accepted wisdom in today’s environment, enterprises cannot design and impose from the top down, it stifles far too much and limits creativity. Strategies do not only emerge from the whole but from the sum of all the parts and it is the diversity within the parts gives the ‘richness’ to innovation. These parts are the emergent strategies that combine with a deliberate (approach) to strategy and become the realised and appropriate strategy. Within an organization we seek to have coherence in purpose and through this a consistency in behaviour. Innovation needs that as well.

Creative tension

Clarity of the vision (our strategic mission) of where we want to be and an honest assessment of ‘where we are today’, our current reality point, signals always a clear gap. It is this gap that is a natural tension for organizations to bridge and close. They do this through this creative tension of moving from reality to the vision. “I have a dream” by Martin Luther Kong Jr resonated with equally ‘where we are today’ to make it a defining moment. Innovation equally requires both, the vision and the honest assessment so the solutions are worked upon to close the gap. This is the creative tension we need to design into our process. This is one of our appropriate tension points.

Context and co-ordination

For me always knowing the context is critical. If we do not have a deep understanding of the why, what, how, then we are never going to offer the best solutions or come close. Far too often, context is forgotten in many new initiatives and the reason they flounder. It is like our current reality point. If you don’t know these, innovation becomes really hard to deliver the results you want.

Context is made up of many things, this can include the purpose and bounds, the capabilities and role structures within any social system that innovation tends to work within. By being explicit you actually highlight the tensions and you get closer to producing a ‘decent’ innovation brief.

We should look at context within this thinking through in this way:

  1. The purpose of innovation as a whole is to do what? What’s its contribution to the total mission, its primary function, its value.
  2. You set the bounds of innovative behaviour, experimentation and guiding principles to provide a growing empowerment and governance, this unleashes creativity and promotes the boundaries where innovation can play!
  3. Capabilities to produce certain outcomes (deliverables) need to be in place to meet the mission and it is critical to understand these and set about providing these skill sets needed for innovation to be managed robustly and with depth of diversity and  understanding of their contributions into the process.
  4. The roles that will be held accountable for producing the outcomes need defining and articulating and then managing consistently and well.

This clarity of innovation purpose is the leader’s role to co-ordinate and through the structures provided you can begin to manage the outcomes as well as to evaluate if these outcomes are achieving the goals and closing that gap between vision and today’s reality. If not , then he or she needs to loop back and tighten the tensions, to adapt them in design for achieving the appropriate innovation system. This is a critical leadership task, like designing a talent development structure to achieve your goals.

Recognizing there are differing rates of exchange

“Achieving this coherence between context and co-ordination of outcomes is subject to natural tensions”

Organisations have layers, a hierarchy to deliver the means, and these change at different rates of ‘shear’ against each other, these are often natural tensions sometimes mistaken as politics, inability or poor understanding. Management often fails to recognize these natural tensions.

One classic example is the horizon of an end result that the different level of the organization sees. This has a sheering effect between the layers involved. Innovation gets badly caught up in this.

When is the right timeframe for innovation delivery? Is this next quarter, next year, in three years or in what period?  Setting about establishing that innovation simply does not conform to annual financial calendars and needs to be accounted for differently become important to establish. This can allow innovation concepts to move within their more natural discovery /development cycle to achieve the right delivery of innovation value. Far too often it is being shoehorned into an unnatural calendar that limits the original concept and compromises the potential result, one that could allow for delivering more game-changing innovation.

If only innovation could have this recognition that it is different from finished goods and allowed to be set within a different cycle than financially driven based on financial calendar would have a most positive effect. You are designing in a more natural set of tensions and resolving some of those sheering effects that are occurring that are negative in their tensions. (Sheering is when tectonic plates are forced together and create this sheering effect – earthquakes, tsunamis, disruption).

If we could place innovation into three time horizons that you will find I’ve discussed in previous blogs in some detail. Briefly this recognize different horizons:

  1. Goals- achievements within the period covered (by a financial review)- milestones
  2. Objectives- attained later but are progressed and those parts accounted for within the period
  3. Ideals- unattainable within the time period but progress is possible during and after the period under review.

These are actually different rates of exchange that can apply a consistency of behaviour (and understanding) and be configured within the innovation process accordingly. These need to be appropriately designed into the system.

As we study ecosystems we see they reflect the sheering effect.

In a study of ecosystems by Robert V O’Neill and others, published in a book called “A Hierarchical Concept of Ecosystems”  by observing rates of change of different components you see the dynamics and tensions within a system. For example, hummingbirds and flowers are quick, redwood trees slow, and whole redwood forests are even slower. Most interaction is within the same pace level- hummingbirds and flowers pay attention to each other, oblivious to redwoods, who are oblivious of them. Meanwhile the forest is attentive to climate changes but not the hasty fate of individual trees.

The insight can be often applied to innovation:

The dynamics of the system will be dominated by the slow components, with the rapid components simply following along. Slow constrains quick, slow controls quick”

Tension occurs as faster changing layers sheer against slower ones, impatience and resistant ‘kick in’ when innovation is demanded, or promised and is not delivered as expected. Knowing the tension points and recognizing their negative effect needs designing out. Again we need to have appropriate adaptiveness designed in, we need to place tension into a context and we need to keep it creative in tension.

Innovation should be the regular way of daily thinking

We should view tensions among innovation, values and risk not as conflicts to be avoided, but as opportunities to be managed. It is the impact of appropriate values and organisational culture that create the ‘right’ tension to allow innovation to thrive or wither.

It is the successful ability of encouraging opportunity, of converting ideas into practices and accepting that there are risks associated, without knowing for sure, that generate new products, services or processes that close our gap between a vision and our present reality.

How do we balance and encourage natural tension’s?

These exist between all the parts of the organization that need to innovate and how we manage successfully the different attitudes to risk that will reside there. How do we organize-to-innovate? What structure needs to be in place to accommodate risk-taking? How do we seize on opportunities quickly?

Adapting the context-and-coordination approach has value here.

The process of adaptiveness is likened to a pilot’s ability to learn through the mental process: “observe, orient, decide and act.” This constitutes an (adaptive) loop.  It contains the four essential functions to any adaptive organization of:“sensing, interpreting, deciding and acting” This adaptive loop is a method for institutional learning. The key is “learning what?” then “how should we learn?” but  an organization has to learn to fulfil its purpose, in this case to close the gap with innovation.

To build in tension we need to become more of those innovation learning organizations.

I’m not sure how many people have read Peter Senge’s book “The Fifth Discipline” but it offers a roadmap for changing our current organizations into learning ones, ones that build innovation into everyday thinking. He suggests five critical needs: 1. System thinking, 2. Personal mastery, 3. Mental modes, 4. Building shared vision and 5. Team learning.

I think exploring these you build in the appropriate natural tensions that innovation requires but you firstly have to make that honest assessment of your current reality, and sadly far too many organizations or leaders are not prepared to do this, they prefer to labour under mistaken reality.

Leadership needs innovation to happen

Leadership has to create the environment to successfully handle paradox, complexity and in the end risk. It needs to design in the appropriate system to allow innovation to work, to permit creative tension to take place. Failure to create this right ‘mix’ will often mean they lose the opportunity both within the organisation and especially in the market place as they have not understood the complexity of the innovation ecosystem they need to manage.

Leadership has the role of getting the right balance, the right design tension into the innovating system, so as to bring out the best from this participation of all the opposing forces for greater innovation opportunity. Harnessing risk and opportunity for innovation is essential, managing its tension becomes essential to be designed in, not simply allowed to happen. Understanding this is important for innovation to succeed.

Transform European activities around innovation ecosystems

The challenge today is to transform European activities around innovation. It is the same for the United States as the growth and job mantra will simply come from innovation. In the EU case, Innovation forms a central plank of the 2020 Europe goals.

Regretfully the next Titanic is waiting to happen.

In recent months there has been considerable activity to formulate the new policies to support innovation through EU funding. The EU has been inviting dialogue and offering a mountain of guidelines and suggestion to help us all.  Much of the focus is on streamlining what is already in place.  I’ve called this on some different discussion blogs a little like “reorganizing the innovation deck chairs on the titanic as it heads towards an iceberg”.

There is enormous activity and pressure to perform as the past results of many of the EU initiatives have not delivered on the goals set, and there is this real urgent need to reflect upon the lessons learned from the failures of the Lisbon strategy. It does seem the present ‘effect’ is put on more steam, lighten the load where we can and let’s try and navigate through these challenges (or icebergs), no time to lose. Everyone is on high alert in Brussels and around the EU all busy doing their job to contribute to present dialogues on making innovation a success. We need to take really radical action in my view.

Perhaps we should be shouting “all stop”

Maybe we should be shouting “all stop.” Can we keep going on layering more onto a system of innovation that has not worked in many cases or provide even further policies that clearly do not fit the order of magnitude of change taking place around innovation?

We are simply shuffling the innovation deckchairs and this is not going to be enough to confront the new global innovation changes taking place. The ones that are slow to respond, regretfully the EU is a shining example of that, that lacks that real agility to read, react and respond (more the later ones, better at the reading ones in the EU’s case) is simply going to consistently lag and not lead in the new global innovation race. Can we afford that?

The EU needs to be bolder in its innovation agenda for a number of reasons:

  • It does not have low costs, abundant labour resource and pricing advantage against many of its competitors. It has to leverage different competencies for advantage.
  • The world is more interconnected and competitive than ever before and harnessing 27 odd members onto the same view is ‘herculean’ irrespective of the issue.
  • Other nations are rapidly replicating any competitive advantage quicker than before,
  • The infinite global creative workforce is forcing everyone to go where the resource (human, knowledge or natural) lies to gain economic advantage. Innovation does not respect borders.
  • The multiple converging forces, perhaps a new infliction point, is, I feel, actually happening. Society is gaining empowerment and possessing the tools to shape and influence. The consumer or individual voice is growing and organizing in new ways that will radically change, in collaboration and influence.

When you are progressively stripped of those traditional past bastions of advantage, innovation needs to become THE essential core competence to survive and thrive, to respond and build around. It seems we all at least agree on that, the issue is how to go about it is where we diverge.

Stepping back is stepping up

The EU must pull back. It simply can’t continue to design, manage, fund, lead, guide and judge as an ‘all-in-one’ for innovation. It needs to stand well back. It needs to revert to what Governments or Institutions like the EU should be:  the providers of the essential backbone, the infrastructure and clear the path to allow all others to find their way. It should set out the big challenges, the societal challenges, which in all fairness the EU is doing, and set about laying in this backbone or foundation for others to work from.

Innovation Business and Social Platform Ecosystems

My view as a serious proposal is to build multiple Innovation Business and Social Platform Ecosystems as part of this different thinking needed.

The EU needs to tap into the combination of strengths within the different regions for them to coalesce around the notion of Innovation Business Platform Ecosystems. It is partly developing the Information and Communication Technologies (ICT) that are increasingly available, combining these with the social media platforms so a greater number of parties are working on the solutions and challenges required to resolve these BIG societal challenges.

This will be based on these eco-platform BIG challenges in an open collaboration forum where a number of different stakeholders (or actors) who have potentially different business & social model needs can come together. The scale and scope of ecosystem platforms can become the fuel of energy, knowledge, specialisation, collaborative know how for innovation to happen, that provides benefits and value to each person or entity that participates.

The Government or EU  provides the necessary support and investment into this ‘innovation backbone’ to enable distributed organisational models based so interaction and collaboration can go on and looks to ‘clear the way’ for the successful delivery of personalized high-margin products/services that leverage local identity and economic structure.

Measuring Innovation Ecosystems

The  aim fits the EU objectives, that is to foster an inclusive and participative society, grow wealth within the community, create jobs which supports broader economic inclusion.  These ecosystems empower the creativity and the participation of all potential participants of EU regions (public and private organizations, small and micro enterprises, communities, universities, institutions, individuals and the critical final consumer) in open socio-economic processes.

Specifically the EU or the separate Governments can measure progress

I’d argue we should forget the old measuring system of the 20th century, hung over from manufacturing of measuring inputs, process, outputs, it gets too complicated. The only one I’d always keep is outcomes, as the only real measure of (commercial) progress, something the EU admits it is not good at doing- generating successful commercial outcomes.

I’d radically measure innovation differently, through:

Innovation linkages– the productivity of relationships, alliance collaborations achieved, interactions taking place, the forming of new knowledge networks, clusters and sharing of complementary assets. It evaluates the different intersections to spot new possibilities

Knowledge diffusion– the content, its value, its adoption rates and absorptive capacity within and outside the ecosystem for accessing knowledge, anchoring it (within the EU) and diffusing it on a broader scale. It can also judge knowledge response (learning).

Intangible assets– it can promote intellectual capital and facilitate long term support for innovation solutions that look promising. It can re-equip people, the most intangible element to manage better within these ecosystems.

Improve the conditions for innovation to grow– by monitoring the dynamics within these ecosystem platforms (demand, impact on society, adoption/ diffusion, skill obsolescence etc) where the commission plays the role of lead policy influencer.

Do innovation ecosystems answer all the problems?

No of course not, but it fundamentally challenges the way we are currently doing things and dismantles the way innovation is being managed today, in silo’s and national boundaries. With intervention constantly taking place at central levels is to influence, yet it regretfully constrains much about innovation today. It is not intended but clearly happening. We need to unblock these constraints and take innovation to the next level.

Innovation thrives by allowing the energy to flow in as close a natural state as it can, less rules, fewer boundaries, higher uncertainty but contained within a given universe. It cannot be tied to increasing complexity, rules and guidelines, even ‘unnatural’ innovation country borders.

The policy maker should play their new part to help to lay out the vision, the mission and provide the enabling resources to best achieve improvement for society and economic wealth, and then get out of the way of the actual process as much as possible, unless it has a clear role to provide part of the core enabling factors.

The main EU/ government role is simply to ‘fuel’ the ecosystem where it can, both in the challenges that need resolution and in providing the backbone of the system to facilitate it, not as many feel today, to direct and police it.

Be bolder EU please, our innovating future depends on it.

Maybe wishful thinking but fiddling with those innovation policy deck chairs knowing what is coming towards me is far scarier. We need to be bolder in our innovation thinking not simply rearrange and streamline the existing activities.

Innovation dynamics have simply changed. Innovation Platform Ecosystems needs serious consideration to change the innovation dynamics within Europe.

The beginning of a new era for innovation, truly global.

Braden Kelley wrote an article entitled “Is the era of Innovation Over?” ( http://bit.ly/h9FCr6) which I would like to build upon.

Braden is the author of “Stoking Your Innovation Bonfire” from John Wiley & Sons and is also the editor of Blogging Innovation (http://bit.ly/d2c9aW ).

Braden picked up on an article lamenting the seemingly poor state of Canada’s innovation efforts (http://bit.ly/fdLeI5 ) with the view that “Innovation is literally hitting a wall”. Braden has also commented about the recent US approach to resolving their innovation approach and believes it is limited in its understanding and appreciation of innovation.

Here in Europe we are certainly going through the same crisis of confidence with innovation, it is not producing the wealth and growth expected and needed to fuel our economies. The EU commissioner for innovation, Máire Geoghegan- Quinn, the EU’s first innovation commissioner, has started to created a lot of positive energy around some exciting new initiatives but are they enough? My answer is simply no.

For a very thoughtful article on the EU and innovation (http://bit.ly/hCZWdO ) published in www.innovationmanagement.se by Ann Mettler, Executive Director of think tank The Lisbon Council and here she gives her take on policy and innovation.

Ann Mettler comments “One needs to distinguish between policy levers and policy drivers such as competition. It is about levers versus drivers. One key here is to look at the money and how the EU chooses to spend. Current spending priorities are the antithesis of innovation. If we continue to spend the largest proportion of the budget on the common agricultural policy we cannot with a straight face claim to prioritise innovation”.

Braden states the same within the article he was picking up upon, written  by University of British Columbia economics professor James Brander. (http://bit.ly/fdLeI5) that explores this sobering possibility of “hitting a brick wall” in a new study published in the Canadian Journal of Economics. Brander concludes that the pace of innovation is slowing dramatically in four key areas: agriculture, energy, transportation and health care. The consequences could have a profound impact on our lives if these are slowing down. Others will pick up any slack.

For me reading about Europe and its innovation policies it does seem Europe faces an “innovation emergency” because its businesses are falling behind its US and Japanese and now China as rivals in terms of investment and new patents, graduates and investment start ups. We are facing many challenges that seemingly the Commission cannot get the necessary momentum behind to reverse some frightening trends and quess what, the developing world is rapidly catching up.

A good understanding of the policies emerging from the approaches to be taken  for EU innovation can be read here (http://bit.ly/gFZ6EF ) in a series of interviews written by Haydn Shaughnessy.

So I do agree, we are actually in crisis. I also agree we really do need a new era of innovation as the old one has clearly not worked. It has to be bolder, more radical and more reflective of what innovation is providing for us. The realization is innovation cannot be contained within borders, it needs to be encouraged wherever it goes, and the Governments need to work on ensuring they keep a stake of it. Presently this is not as good a stake as we need for the level of growth, jobs and economic prosperity.

Innovation policy makers need a better understanding of innovations parts.

  • Any innovation policy is a formidable task, innovation by its nature and understanding is very broad. How can policy guide and stimulate innovation differently?
  • Braden is right in his article, the heavy emphasis on applied science and investments in research and technology as the keys to innovation is not the complete answer but it is part of it, of course.
  • Increasingly within the EU there is a growing realisation that all this research effort that is being heavily supported through grants and funding is falling very short in the commercialisation of inventions. There is a shift to measuring impact on society, in the delivery of benefits and that is important.
  • There is an increased realization on bringing new services and products to market and this comes through the SME. This is where it becomes harder to administer and develop levers for the SME to thrive. Often the argument for Governments is to simply get out of the way and let the market manage this. In the EU, dispersion of grants or funds will still have bureaucratic strings attached to it, so this is unlikely to happen.

The new recent US & EU initiatives on innovation

With the announcement of new initiatives on both sides of the pond I still get the distinct impression the policy makers are simply re-arranging the deck chairs on the Titanic- to do something that will soon be overtaken by events, or that contributes nothing better to the existing solutions to our current problems and that is a worry. We do need something more radical. Policy needs to be bolder. We simply don’t need just another sputnik moment, a realization others are beating us, we need to put that man on the moon to  make sure we mobilize society around innovation.

The real challenges needed to be faced.

  • The first big challenge to innovation is really a management challenge, not a research challenge, and it is not clear how the latest policies will succeed on this front. We do need to recognize managing innovation is rapidly changing the way we need to work. Is this being fully accounted for within new policies or pushed more? Remaking management to innovate is essential to deliver through.
  • Innovation has fragmented; today’s ‘innovation’ means what? We do need to understand the different ‘types’ of innovation needed to perform the specific task. I am not sure the policy makers understand the really important differences between open innovation, needs based innovation, service dominant innovation or where Business model innovation fits for support or development to name a few. This needs to change by rethinking innovation. Break it down more. It is not an internal event; it is an external collaborative event beyond a few PhD scientists to deliver innovation. Innovation needs to engage society more, not at the end but throughout the whole innovation development process.
  • There is a greater emphasis on innovation partnerships as innovation comes about at the intersection of different disciplines and relationships, so this is very positive. Bringing a diversity of people and what they can contribute together is positive. I’m not sure yet if this will be understood enough this includes the final consumer with this.
  • 70% or more of GDP comes from services. Many service areas don’t depend on research; they rely on ‘gut feeling’ instinct and quickly spotting ‘breaking’ opportunities, they utilise and combine knowledge more than product alone. Speed to market or first mover advantage can be much more important and how do you account for this in policy? We need to find better ways; we need to push more of the levers that help in this. We need to develop more knowledge platforms that combine knowledge to make better intelligent products.
  • I do share this opinion expressed by Ann that there is still just too close a relationship and political patronage of certain sectors that are leading to a kind of inbred relationship between government and companies, leading to lagging performance in terms of international competitiveness and protective positions that are not actually creating new jobs,  they are simply sending jobs away.
  • US economist Tyler Cowen argues, there are huge economic implications if innovation stagnates. This is what lies behind what he calls The Great Stagnation: How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better. What underpinned the great postwar boom was the industrialisation of inventions made between 1910 and 1940. The goods that poured out of the west’s factories between 1950 and 1975 provided employment and rising real wages for the mass of the US’s and Europe’s citizens. But the “low-hanging fruit” that delivered such benefits is disappearing, he argues.
  • So are we actually stagnating? So perhaps the era of current innovation activity is over. We are clear of the importance of innovation as a driver of growth and the imperative to exploit it. Perhaps if Innovation was left to look after itself a little more, it could really flourish and provide real breakthroughs that did altered our lives as in 20th century very radically, that seemed unfettered far more.

I very much liked Ann Metters final comment in her article. “The biggest problem, however is that we don’t appear to respect the process of innovation itself in the EU. Innovation is not unidirectional. It does not lead to success nine times out of ten. It is by nature experimental, disruptive and unpredictable. We have no formula for it. We can’t control it top down. And that’s hard to accept, particularly if a lot of money and institutional reputations are at stake. So we create our formulas around R&D, shy away from risk and expect success. But it really doesn’t work that way”

So for me the battle of ecosystems becomes the necessary innovation platform.

Great advances do exist and many are still out there hanging on the tree. We do need to get past the low hanging fruit but to do this we do need our institutions to step back and provide a new ‘enabling’ infrastructure, we need to build the scaffolding to pick this new economic fruit. Government need to stick more to their basic knitting, focusing upon developing the conditions for building the ecosystem in which innovation, experimentation and investment can really flourish. We need supportive innovative management or investment ecology not micro management through administrating funds.

If we want to step up the pace of invention, there has to be a huge shift in the way we think and who does what. We are all presently trying to do each other jobs, often we are falling over each other, we duplicate effort, dilute innovation competition by accepting incremental innovation as the end result. We can’t continue that way, we all need to be bolder, to realize we are in crisis and where bolder innovation (and invention) can provide solutions.  Government needs to design markets and build institutions that promote innovate and let the markets build their individual ecosystem on which innovation, experimentation and investment come together on platforms that provide broad benefit to all that participate. Let the market fund these, let Government encourage the enabling platforms, the brokerage to bring these together and ensure it anchors part of that for its society.

Are ecosystems and platforms the global answer to innovation acceleration? I think the more the Governments promote innovation platforms, provide the levers, infrastructures and technical backbone to allow this to happen, the better. I think we can see rapid acceleration of ecosystems and then innovation by encouraging these platforms and new business models that can dramatically transform many industries. Scale and scope will be seen differently, these are global not country specific. Individual Governments need to help to build the global cake and ensure they get a slice of it. It will often be messy, unclear and not as well defined as policy makers would like but that is the nature of innovation.

Focusing more on building different ecosystem becomes main stream for innovation delivery and we usher in the new era of global innovation. We need to move beyond today’s innovation thinking so the new era of global innovation can emerge.

Welcome to the brave new world of innovation ecosystems

Will ecosystems replace simple ‘old’ innovation collaborations as we know them today? Open innovation has suddenly lost its pole position. Board rooms around the world will be thinking through the events that unfolded yesterday and I’m not talking about Eygpt.

Just get into the story that has been unfolding at Nokia in the recent weeks, it has been breathtaking but it signals a massive change in where innovation will be going. Let me summarize some of this story and add some of my own thoughts on what this means.

Firstly the famous burning platform memo within Nokia.

In early February Stephen Elop, the CEO of Nokia issued a ‘burning platform’ memo internally

  • We are standing on a “burning platform,” and we must decide how we are going to change our behaviour.
  • The burning platform, upon which the man found himself, caused the man to shift his behaviour, and take a bold and brave step into an uncertain future. He was able to tell his story. Now, we have a great opportunity to do the same
  • And, we have more than one explosion – we have multiple points of scorching heat that are fuelling a blazing fire around us.

While competitors poured flames on Nokia’s market share, what happened at Nokia? They fell behind, they missed out on some big trends, and they lost precious time to multiple competitors. They now find themselves years behind. So in a brutally honest assessment Nokia has lost market share, lost mind share and lost time. It needed something radical.

There are many other organizations that should be as honest as this. Automotives come to mind for example. Burning platforms are one of the best ways to galvanise and generate innovation. There are many burning platforms out there- Health, Government, Social Services, Age concerns, Poverty, Pharmaceutical, Automotive, Energy and Climate (and many others) are all burning platforms needing bolder solutions.

If leadership sees it, then disruption follows or rapid decline can set in. Competition in the world is getting mean.

The new war of ecosystems

To quote Elop: “The battle of devices has now become a war of ecosystems. In this case it is where ecosystems include not only the hardware and software of the device, but developers, applications, ecommerce, advertising, search, social applications, location-based services, unified communications and many other things. Our competitors aren’t taking our market share with devices; they are taking our market share with an entire ecosystem. This means we’re going to have to decide how we either build, catalyse or join an ecosystem”.

Today, the battle is moving from one of mobile devices to one of mobile ecosystems in Nokia’s case and perhaps many other global businesses.

Again Elop: “Ecosystems thrive when they reach scale, when they are fueled by energy and innovation and when they provide benefits and value to each person or company who participates”.

Back to Nokias CEO Stephen Elop brutally honest ‘burning platform’ memo.

“The first iPhone shipped in 2007, and we still don’t have a product that is close to their experience. Android came on the scene just over 2 years ago, and this week they took our leadership position in smartphone volumes. Unbelievable.”

“We poured gasoline on our own burning platform. I believe we have lacked accountability and leadership to align and direct the company through these disruptive times. We had a series of misses. We haven’t been delivering innovation fast enough. We’re not collaborating internally. Nokia, our platform is burning.”

Overall, the communique laments Nokia’s lateral movement while Apple and Google have started eating its lunch on the mid- and high end and Shenzhen-based off brands have started to cut into its traditional dominance in emerging markets, leaving Espoo with virtually zero market leadership.

So enters Microsoft needing at least one solution to its own burning platforms .

A long term strategic alliance between Nokia and Microsoft was announced on Friday 11th February 2011, proposing to build a global ecosystem that creates opportunities beyond anything that currently exists. This ecosystem offers a serious alternative to the existing choices to operators, developers and consumers. Bringing together highly complementary assets and competencies will allow this ecosystem to achieve more than any other industry partnership could achieve. Welcome to the third ecosystem of mobile devises to compete with Apple and the Google’s Android.

Does it make sense or as one commentator commented “ Nokia: here’s why we jumped off the “burning platform” into the frigid North Sea by choosing Microsoft and its Windows Phone 7” as its smart phone platform.

  • Together Microsoft and Nokia have some of the most globally recognized and treasured brands on the planet. This can be leveraged for the benefit of the ecosystem and the products.
  • Nokia plans to help drive and define the future of the platform. That could include contributing expertise on hardware optimization, language support, customization of the software and helping bring Windows Phone to a larger range of price points, market segments and geographies.
  • Nokia operates an established, global supply and distribution network with the capability to bring products to almost every corner of the world. That provides the capability to take potential Nokia Windows Phone products and make them globally competitive.
  • Scale is critical to a winning ecosystem. Together, Nokia and Microsoft would bring unrivalled scale in global reach, brand identity and product breadth.

It seems a winning idea: world’s biggest handset maker plus most profitable software firm.

A turkey or an eagle has been raised with this strategic partnership

One further commentator (http://bit.ly/effPog) quoted:

“On paper, it looks like a simple win: the world’s biggest handset maker joins the world’s most profitable software maker, which dominates the PC platform. Why shouldn’t it be an open goal on mobiles? The problem is nobody thinks of Nokia or Microsoft when buying a “smartphone” because that means “apps”, for which everyone thinks of Apple (330,000 third-party apps) or, increasingly, Google’s Android (200,000 third-party apps). Developers know they can make money on either platform if they have a hit like Angry Birds or some other app, and companies know apps can drive commerce to their business.

By contrast, Windows Phone 7 offers fewer than 8,000 apps. And instead of courting developers, Nokia and Microsoft have undermined them: Microsoft by abandoning Windows Mobile a year ago, by unveiling Windows Phone 7; and Nokia abruptly announcing on Friday that its best-selling Symbian platform was in effect dead and would not be used in future smartphones. Symbian developers will probably retool to write for Apple or Android rather than Nokia. Without developers, you don’t have apps, and without apps you don’t have a reason for people to buy your platform over another. Open goal? More like closed doors.

It might mean many possibly heading fast for the exit. As an interesting question for a developer is, where best would it be to put their skills to write code for Windows Phone 7, for Android, or Apple’s iOS?

Rebuilding fortunes

Embattled mobile phone firm Nokia has now signed up to a “broad strategic partnership” with Microsoft in an effort to rebuild its fortunes. It is most likely to go beyond just smart mobiles.

Elop said the partnership meant the mobile market was now a “three horse race”, with Nokia-Microsoft competing strongly with Apple, and Google’s Android platform.

Let’s see how HP reflects on this; will they join this ecosystem or stay with their own efforts to battle on the hardware front? They might be forced to join one of the three ecosystems themselves as they will increasingly find it expensive to build another alternative.

So the battle of ecosystems becomes the necessary innovation platform.

Are ecosystems and platforms the global answer to innovation acceleration?

I don’t think this set of events is contained to one industry. I think we will see the rapid acceleration of ecosystems; new platforms and business models will suddenly transform many industries. Scale and scope will be seen differently from this move of Nokia and Microsoft.

Take a quick look at what these ecosystems can bring in this Nokia- Microsoft deal.

At present in what must be a fairly fluid strategic rethink, Nokia said it will continue to make phones running its Symbian operating system, thus “leveraging previous investments to harvest additional value”. Symbian, though, will be relegated to the status of a “franchise partner”. Third world phones suddenly have a fairly decent operating system at affordable prices perhaps?

MeeGo, Nokia’s Linux-based open source mobile operating system, will also continue – but with a focus on “longer-term market exploration”. This seems like picking the parts that are different and merging these into the Windows Mobile 7 platform in the next few years.

Further scanning the different commentary from yesterday that while the specific details of the deal are being worked out, here’s a quick summary of what we are working towards:

• Nokia will adopt Windows Phone as its primary smartphone strategy, innovating on top of the platform in areas such as imaging, where Nokia is a market leader.

• Nokia will help drive and define the future of Windows Phone. Nokia will contribute its expertise on hardware design, language support, and help bring Windows Phone to a larger range of price points, market segments and geographies.

• Nokia and Microsoft will closely collaborate on development, joint marketing initiatives and a shared development roadmap to align on the future evolution of mobile products.

• Bing will power Nokia’s search services across Nokia devices and services, giving customers access to Bing’s next generation search capabilities. Microsoft adCenter will provide search advertising services on Nokia’s line of devices and services.

• Nokia Maps will be a core part of Microsoft’s mapping services. For example, Maps would be integrated with Microsoft’s Bing search engine and adCenter advertising platform to form a unique local search and advertising experience.

• Nokia’s extensive operator billing agreements will make it easier for consumers to purchase Nokia Windows Phone services in countries where credit-card use is low.

• Microsoft development tools will be used to create applications to run on Nokia Windows Phones, allowing developers to easily leverage the ecosystem’s global reach.

• Microsoft will continue to invest in the development of Windows Phone and cloud services so customers can do more with their phone, across their work and personal lives.

• Nokia’s content and application store will be integrated with Microsoft Marketplace for a more compelling consumer experience.

The combination of these 800lb Gorillas will seemingly be impressive

Nokia’s history of innovation in the hardware space, global hardware scale, strong history of intellectual property creation and navigation assets are second to none. Microsoft is a leader in software and services; the company’s incredible expertise in platform creation forms the opportunity for its billions of customers and millions of partners to get more out of their devices.

So the war of ecosystems is upon us.

Stephen Elop made these comments yesterday:

  • There are other mobile ecosystems. We will disrupt them.
  • There will be challenges. We will overcome them.
  • Success requires speed. We will be swift.
  • Together, we see the opportunity, and we have the will, the resources and the drive to succeed.

Time will tell on this strategic partnership, it has a massive challenge to catch up and regain lost ground but it signals the ecosystem for innovation step change is upon us.

In my view innovation has just entered a new phase

The ecosystem becomes main stream for innovation delivery. Platforms, strategic partnerships, new business models all will be on the agenda of any serious global organization. Burning platforms are all around us, welcome to the new era of global innovation. Perhaps the bold new innovation frontier.