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?

The formula is the combination of positive relationships between the following interrelated parts:

Seeking out a working Sustainable Competitive Advantage (SCA)
What do you want to achieve from selecting the expected SCA  outcome choices? What do you need to frame as the SCA by using the parts of the formula?

  • Extent of market advantage (posses distinctive advantage)
  • Competitor’s difficulties to duplicate this, where unique advantage is often found
  • Strategic leadership is prevalent and nurturing and valued
  • Understanding “superior” marketplace position (in revenue and cost advantage)
  • Creating it, capturing it and keeping it distinctive
  • Facilitating, accelerating and sustaining the diffusion process across the organization
  • How you seek relative advantage, achieve compatibility, reduce complexity, encourage trail-ability and ensuring observe-ability.
  • Advancing the clear “line-of-sight” new business always requires to execute upon.
  • Looking to achieve better visibility, flexibility, extending collaborations and advancing concepts through technology and structured approaches.
  • Other strategic objectives requiring distinct capabilities to be built into these 5 groups

Innovation Intensity (II) and the degree of adoption

  • Extent of product, process, managerial and business innovation
  • Mix of technological and non-technological innovation
  • Impact of innovation expected through strategic leadership
  • Magnitude of change capacity required through innovation
  • Scale of innovation impact desired
  • Plotting out the roadmap for innovations evolution
  • Exploring the different types of innovation and their potentials
  • The use of Business Model innovation to change the proposition
  • The essential linkage between strategy and innovation outputs and outcomes
  • Investment x activity x focus x disruption = return on innovation expectations

Organizational Capabilities (OC) in developing their distinct differences

  • New knowledge acquired and embedded, exploring new context and ways
  • Ability for value creating activities to be accumulated, integrated and transferred
  • Adaptive learning (leads more to incremental innovation)
  • Generative learning (willingness to question long-held assumptions)- favours radical
  • Relational learning (collaborative linkage, networking for open innovation)
  • Distinctive learning of new knowledge to create added value directly.
  • Experimental learning tolerance with new ways of doing things
  • Learning from both internal and external knowledge focused positions
  • Encouraging co-production of concepts (ideas, components, systems, R& D)
  • The ability to also unlearn (long held assumptions, group-think)
  • Structural evaluations into routines, procedures, systems, culture etc
  • Releasing latent capabilities- discovery and exploitation- as capital in waiting
  • Linking the three capitals- human, structural and relational- for interactive leverage
  • Combining complementary assets and dynamic capabilities to configure & reconfigure
  • Build the technology skill sets focusing on collaboration
  • Encourage techniques for formalization, exploitation and generation
  • The value of Absorptive Capacity in acquisition, assimilation, transformation and exploitation.
  • Seeking out the buy-in from the cross-functional business units

Entrepreneurial Energy (EE) promoting and generating

  • Entrepreneurship facilitates generative-learning activities as the focus
  • High tolerance of risk-taking, exploring the unproven, seeing patterns and shifts
  • Pro-activeness in new directions, new capabilities, dynamics and mindsets
  • Use of accumulated capabilities (coordinating, preserving and supervising)
  • Key decision makers’ traits to investigate and encourage change, risk-taking propensity
  • Positive outlook towards diversity & different behaviours, discovery and experimentation
  • Providing a learning environment through trials and pilots that can scale quickly

Market Learning Competence (MLC) for establishing a clear awareness

  • Through marketing capability and market understanding vigour
  • Market focused to acquire, disseminate and use knowledge acquired
  • Exploit through sensing & scanning conditions for diverse and unrelated opportunity
  • Possessing a close interaction with customers, users and suppliers
  • Ability and speed to react to the variability of the environment
  • Possess a high level of competitor awareness
  • High levels of customer orientation and “over-served”/ “undeserved” insights.
  • Always orientated towards innovation not just new product development
  • Building agility and responsiveness into constantly changing market conditions
  • Getting to the “heart of the customer” in outcome driven ways for their needs.

Relationship & Networking Effects (RNE) and its support to enhance

  • Building greater exchanges of knowledge through interactions
  • Encourage constant practice of sharing
  • Promote systems of relationships and the structures needed
  • Strengthen alignment and appreciation of value-adding activities
  • Connecting Knowledge Management with finding ongoing Business Value
  • Combing Knowledge with constant practice & sharing
  • Support to enhance the needs and guidance through good governance
  • Resolve actively the barriers and concerns
  • Build trust, connectedness and belonging
  • Build common purpose and share the vision
  • Build identity and offer difference to stop leakage of knowledge
  • Actively connect people to people, people to knowledge
  • Gain alignment, be transparent, build identity and encourage networking
  • Support the patterns of exchange, their impact on value,
  • Assess the dynamics and new value potentials in the different exchanges
  • Linking the collaborative efforts to define, align and stimulate innovation targets, strategies and initiatives to support ongoing and sustaining success
  • Measure robustness, diversity and renewal
  • Searching for defining and designing complementary platforms.

Brief background and some thoughts

On first take all this seems is a long list, actually this is offered on purpose. You add your own distinct needs within this formula but take care not to dismiss any suggestions offered here, without ‘good cause’.

The challenge is how you see it, how you value its ability to connect context and the content or aspects you want to focus upon. These structures or building blocks you can start individually adding your unique “flesh to the bone”.

Let this become an innovation capability formula that stays in your head and you constantly ‘walk around’ its parts to get increasing connection and momentum to build its value from others needing to relate to what is important to building sustaining capabilities.

I got the original idea of this framework a number of years back by reading through some different thoughts that Jay Weerawardena’s had put together in a number of assorted papers. These assorted ideas and concepts partly fuelled my idea that lead to this ‘combining’ concept of mine, finally published here.

I feel we need to provide a framework that can be worked in ways that build your own unique capabilities. By focusing on these key components that do tend to make-up innovation that leads to sustaining ongoing competitive advantage you can frame and measure activity.

The other formula to measure this against

The one other formula I use with this is measuring its return on investment. This is

ROI FormulaSo a framework and a formula to measure its impact against. Does this make sense to you? It has to me for years. I just thought I’d publish it a little wider than limiting it to a chosen few.

Really do think about it, experiment with it and see if it does not give you the increased intensity and focus you are needing for building greater capabilities. I think you will find it does give you a powerful framework to build those capabilities around, needed to deliver real advantage going forward.

 

Organizations are in a constant dilemma concerning innovation

Organization's innovation dilemma.The issue of “where does innovation fit?” is one of the most difficult ones to address in many organizations. It seems to fit uncomfortably for many.

At the top of our organizations they ‘require’ innovation but will often not want the potential disruption this might entail.

Yet the organization today is being challenged like never before, it has gone from managing the predictable business to responding to the unpredictable, more opportunistic and alert to change, a place innovation can fit within the need to respond to this different environment.

This is the final post in the series that has focused on the innovation work mat components

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Innovation failure starts at the top

So who do you think form the group that are the most likely candidates for innovations consistent failure? It may surprise you to know that most fingers point straight to the top of the organization as the main cause for its enduring failure.

I don’t think this is sour grapes of the people working away on innovation daily, that the ‘finger of failure’ is well and truly pointing upwards. There is more of an innovation knowledge gap at board room level or even just below this, than many can imagine, that is the plain reality. They often simply have no real clue on how innovation really works and what their essential role is in connecting all the different parts necessary to align this into the organizations overarching goals, objectives and strategies.

Let’s simply select the top common causes of innovation failure.

In a recent survey I was reading*, it provided a set of results about the common cause of innovation failure. The survey was asking participants to check all that applied and although there were 30-odd possible reasons the top ten that stand out as head and shoulders above all the others are nearly all down to the simple failure of innovation engagement in its leadership. Failure lies at the very top on why innovation fails.

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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.