Building an innovation framework that has real capabilities at its heart.

SCA FormulaI’ve strongly believed when you begin to think through a framework for innovation, see my last article as an example, you also should equally need to recognize the capability framework that you will need to build into this.

Working through these as essential combinations can become the real enabler.

Here is my solution that I think is worth working through, to firstly absorb and then consider for applying to your own innovation building activity. Try it!

I have worked on a formula SCA = II + OC + EE + MLC + RNE for this. I have never published the make-up of this in the public domain before, although I had briefly outlined it in a past post here. In that post I outline my thinking and I do not think it needs repeating, does it?

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Figuring out a different strategic alignment with innovation being central.

Strategy as we have previously known it is officially dead. Strategy is stuck! Competitive advantages have become transient. We are facing situations where advantages are copied quickly, technology is just one constant change, and our customers seek other alternatives and things move on faster and faster.

In a new book written by Rita Gunther McGrath, a professor at Columbia Business School in New York and one of the world’s leading experts on strategy, she has been exploring the changes rapidly taking place called  “ The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business

 “Strategy (in the past) was all about finding a favourable position in a well-defined industry and then exploiting a long-term competitive advantage. Innovation was about creating new businesses and was seen as something separate from the business’s core set of activities.” “Sustainable competitive is not just ineffective, it’s actually counter productive” says Professor McGrath.

She rightly states:“Think about it: the presumption of stability creates all the wrong reflexes. It allows for inertia and power to build up along the lines of an existing business model. It allows people to fall into routines and habits of mind. It creates the conditions for turf wars and organizational rigidity. It inhibits innovation.

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Linking innovation context to the process

Time passes extremely quickly, particularly when you enjoy yourself, or so it seems for me. I was surprised, going through some of my past blogs, the time between related entries on the need for having in place a sustaining competitive advantage framework on innovation, has been longer than they it should have been. This blog is the third entry on this subject.

Always, always and always do I see organizations struggle to align themselves for their innovation activity, why is this? Either alignment of innovation into the strategy they are (assumedly) following or shaping innovation into the context of where and how innovation can fit.

I’ve written on this often enough actually, and argued the need for building a more sustaining innovation framework.  I have been working for some time within one of my formulas on this with its given framework of II + EE + MLC + OC + RNE build towards = SCA. I somehow suspect you need nudging on what this means

Required past reading possibly needed here.

Without duplicating more than necessary you need to go back and read two previous blogs on this

The first was written in August 2010 and entitled “A formula for Sustaining Competitive Advantage through Innovation”. The link is here:  http://bit.ly/95kCI1

The second was written in June 2011 and entitled “Sustaining is Pivotal to Making Innovation Progress”. The link is here: http://bit.ly/lPLssm

Both offer a helpful introduction to the framework and formula.

The next part of the equation

This blog ‘advances’ this framework by attempting to link the context of innovation into a process to think through. I say attempting because we need to accept each building process is different, and unique to the organization and the circumstances of what they want innovation to achieve, besides the standard reply “growth and profit”. Doesn’t this always sounds like the famous question asked at beauty pageants: “So what’s the most important issue for you?” asks the compare with the reply “world peace”. Oh, I wish it was so simple.

Those leaders that talk of “growth and profit” from innovation seem to reduce it to just a sound bite, I just wish it was so simple. I do wish the majority of our business leaders would get ‘into’ innovation understanding a lot more. Innovation breaks down always outside the CEO’s executive door and it really does need them to step outside and get more fully involved as it is a major area to succeed at if a longer tenure is in their minds.

Still, I digress. Here I outline how I see a typical linking through of a context to innovation in a ‘flow through’ process that is shaped along the II + EE + MLC + OC + RNE build towards = SCA, framework.

Innovation Alignment, Context & Process

Innovation Alignment to the Corporate Strategy does need working through. It needs linking to business goals and strategy, to the role innovation plays within this, the type of innovation portfolio you wish to design and work upon and the delivery and adoption needed so the organization ‘aligns’ itself. You need a thinking-through process to align context into activity.

This takes time, it needs sustaining effort but it needs leadership to understand the critical connecting parts to do this. It needs a defining framework that I see as separate to what I’m offering here. On my present rate of outlining this it does seems sometime next year for that – not good news for those interested.

Watch this space

Actually let me share a little secret between us,  I’m working on a more radical, visually appealing and exciting way to approach this now but within a joint collaboration around this critical issue. So, who knows this might be discussed earlier than my past track record of once a year to move from one aspect to another. It needs to be and I’m sure my collaborating partner on this will be pushing me a lot harder going forward.

Sustaining is Pivotal to Making Innovation Progress

The greater challenge today with innovation is to build a more sustaining framework for innovation to be consistent, like a beating heart, day in and day out.

The struggle is what constitutes the right areas to frame and build innovation capability upon? I argued last year in one of my previous blogs there was a formula. If you go to “A Formula for Sustaining Competitive Advantage through Innovation” at   http://bit.ly/95kCI1 it introduces this. Now we need to align this further.

The Formula for Sustaining Competitive Advantage

Taking this one step further and linking it.

I have repeatedly suggested innovation needs to be dynamic, where you need to understand your fitness landscape (see blog http://bit.ly/bxTeYO and http://bit.ly/e7M62A) that relate on this ground breaking concept.

A sustainable innovative organization needs to be extremely fluid and “organic” in the way it treats innovation to foster constant creativity that is vital for the success of its future growth and wealth creation. Some thoughts:

  1. It has to work out ways to creating value, Besides encouraging ideas that can come from anywhere, inside and outside the organization it has to invest in its cultivation process, as ideas have to add value, they have to connect to the strategic need of the business
  2. Innovation is a Dynamic process: Innovation for the company is as “oxygen”, it is the life blood and this has to be delivered constantly to all cells and bodies,  not just for survival but for obtaining fitness and then begins to achieve this sustaining itself as part of a natural routine.
  3. Innovation is part of the recognition that business is not as usual, or achieved by approaching challenges in the market place through past tried and tested ways. We need to think differently to thrive let alone survive. Perspectives have to be broadened out and challenged more. The organization needs to invest in its people constantly to ensure the possibilities of achieving a healthier future. We need improved capabilities.
  4. We need inclusive thinking both internally and connecting externally. Many are realizing the incredible benefits of moving more towards insight-driven innovation that promotes, stimulates and drives the innovation process. I’ve commented on a few of these previously.
  5. Insightful-driven innovation comes from opening up to diverse views, internally and externally, and we need to ‘push’ closer to the edge of possibilities. To do this we need our people to be confident to translate what they pick up as often a ‘faint signal’ and translate this into actions and opportunities to explore within the innovation process with increasing confidence and all the best possible support.
  6. To encourage this we need sustaining and clear leadership. People want to be inspired, to understand a vision and feel they are very much part of the future. We all seek identification. Executing through a framework of activities that promote learning, improve competencies, promote latent energies and provide intensity of purpose are all far more exciting to be part of than the many remote leadership models we often see today who lack responsiveness and empathy.
  7. To achieve this new sustaining point, we need to measure innovation, not as a ‘nice to have’ but as an ‘essential to have’, a core aspect of employment. To achieve this we need to build around a ‘given’ framework, one that multiplies and leads to sustaining competitive advantage by adding II + EE + MLC + OC + RNE to equal = SCA.

The suggested organizing SCA framework has a number of sub components that make up each of its parts. I am certainly happy to expand on this through my practice on innovation. You have the contact details if you are interested. We do need to move beyond the present, more static confines of innovation.

A Formula for Sustaining Competitive Advantage through Innovation

Sustainability is central to innovation’s future progress

Today’s challenge for me is not only to be building the innovation capacity but also to be establishing clear ways on how we should set about sustaining it. Increasingly it is necessary for organizations to have a capability and capacity to sustain Innovation so it can provide the stimulus for lasting growth. To get there though, it does seems this must be through continued learning so your capabilities become stronger, evolving and more unique, thus making them more difficult for competitors to understand and imitate.

Let me outline an innovation framework that builds capability through a sustained approach.

When you set out to build capability to be sustaining you need to consider there are two types of capabilities, distinctive, which are the characteristics of the organization which cannot be replicated by others and reproductive, which can be bought in by the competition but always need to need to be appropriate to any objectives you are trying to achieve.

Focusing on improving the capabilities of your people needs in my opinion five essential elements and applying these through consistent application and measurement and sustaining this within your activity leads to a greater potential to sustain innovation and will lead to sustainable competitive advantage.

To achieve greater sustainability I believe the five elements within this model can provide the path to this.

SCA = II + EE + MLC + OC + RNE

So what is within this framework?

Sustainable Competitive Advantage (SCA) comes from the combining effects of the following:

  • II Innovation Intensity- its degree of adoption, the investments made, the multiple level of activities and the focus of the intensity given to building capabilities to innovate.
  • EE Entrepreneurial Energies- this os more on how you set about, promote and generate the internal environment as entrepreneurial to enable innovation in all its different forms to take hold and be seen as a learning environment people want to get involved with as they can readily identify with.
  • MLC Market Learning Competence- these give a clearer awareness on what and where to acquire from and then take the market lessons from. The key need is to orientate always towards, and generally get to the heart of, where innovation takes place- in the market place and with your customers, knowing their real needs and also figuring out their unmet ones also!
  • OC Organizational Learning- knowing the differences in the different ways of learning by linking the different intellectual capitals and combining the complementary assets needed to make them more dynamic.
  • RNE- Relationship & Networking Effects- the supporting and enhancing aspects of making greater connections, collaborations and exchanges so as to speed up the process of innovation, reduce or contain costs and enhance your understanding through these external relationships and getting closer to knowing where latent knowledge lies, to assist and share this internally for greater impact and result for all.

The make-up of each of these five elements has a significant set of activities to structure around but can deliver a clear set of benefits. These provide the necessary intensity of purpose.

What is the result of adopting the SCA framework?

ROII = Investment x Activity x Change (learning environment)/over Results Impact

It is applying this ROII that can measure this investment. The sustaining impact can be measured as continued investment across this framework pays off over time. I would argue this organizing framework is a good starting point to build your SCA.

IP of Paul Hobcraft at  www.AgilityInnovation.com

Email to find out more: paul@agilityinnovation.com