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

Advertisements

2 thoughts on “A Formula for Sustaining Competitive Advantage through Innovation

  1. Hello sir
    I just need a questionnaire which may measure SCA based on the 5 constructs. Right now I am measuring SCA based on the distinctive capability framework but I think this framework is one step ahead for the volatile Environment. May I get any guidance in this regard

    Regards
    Shikha

    Like

  2. Pingback: Building an innovation framework that has real capabilities at its heart. | Paul4innovating's Blog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s