In the last week or so I took a step back to look at the emerging trends around innovation. It certainly seems to have a bright future but its management is growing in complexity. It now needs a deeper understanding than ever. Are we achieving that?
My viewpoint on observing different innovation dilemmas:
- Innovation used to be about product, technology and R&D but it is far more now about value and anything that carries value. It is about creativity and entrepreneurship and it is even more tied to a clear vision today than ever, so it does become a vital part of the culture of the company. Innovation and its potential value generation have certainly broadened out in options and needs even more to be tightly integrated with the strategy- how different types of innovation are aligned is really critical. I think many organizations are failing badly on this alignment recognition.
- The growing appreciation that richer opportunities are to be found across the entire value chain by how we manage and view this. Making the strategic choice of what should remain in house as a contributor to the core and which can be outsourced to specialists better equipped and more focused on that part. This is making innovation far more complex and will challenge everyone but it can be very liberating and more rewarding providing the value can be recognized and leveraged effectively …in faster and more relevant innovations that deliver from the core or adjacencies or through others better equipped to add their value. The key to outsourcing is resolving the questions of can this be effectively coordinated on who manages what, and who owns what, and how it is exploited, for the added value and impact this can offer each party.
- There is a clear recognition that defining real value lies more at the customer point and not within an organization in the R&D lab, as has been the past practice. Getting the customer involved as early as you can from discovery to delivery- the end to end of innovation- extracts greater potential value. There has been a growing shift for innovations to meet exact customer needs and also discover their unmet needs and then working back to developing the solutions. This increased customer focus will continue by making them more central in any web of co-creators and co-creation activities that needs to be undertaken around innovation discovery and its final delivery.
- External parties are seeking more involvement in a ‘joint’ innovation processes and the development process as early as they can. Partners are becoming increasingly reliant on each other to become a critical contributor or component provider to resolve more complex problems. Understanding these mutual dependencies is important to be recognized and actively managed in new collaborative ways.
- We have seen some really dramatic shifts in research techniques to know more of what ‘pulls’ and ‘connects’ with consumers. Customers are also looking to become more engaged and involved in their products and services, in what they expect and wish to be associated with. Managing these dynamics and often the emotional mix is hard and often frustratingly complex, to decipher and interpret. The new work is to be positioned as the ‘orchestrator’ of these dialogues across the organization and in drawing in through collaboration with the partners, by constructing the conduits and business platforms where the flow of exchanges takes place where new concepts evolve.
- The shift in emphasis to the customer makes a really compelling case for increased emphasis to be made on trend spotting, scouting, aligning and recognizing behavioural changes so as to make insights a real core of your business, more the source of those ideas than leaving ideas simply emerging from within an organization. Stringing together an often diverse set of signals calls for higher capability in pattern recognition and appreciating more about complex adaptive systems and the part they play. These are where dynamic networks of interactions and relationships merge and adapt differently, so individual and collective behaviour changes as a result of the experience, leading to emerging new opportunities to explore.
- There is an increasing need to manage a diverse group of collaborators across a common process. Often these parties might not want or need the same end-result but do need each other to ‘combine’ for a given result. This will benefit their individual businesses and add new dimensions in this collaboration space, to then deliver different outcomes than the existing solutions in place today fail to do. There is a real value of combining and working through a common business platform, to achieve individual and collective aims and equally, enhance the total delivery experience (Delivering Applications around Android are a good example here or Apples developer platform). Platforms bring together developers, providers and customers that can scale or contract accordingly and if well managed can drive business strategy in dramatically new ways.
- Building a more robust ‘activity system’ into managing innovation, beyond just simply pipelines and portfolio’s needs thinking through. It requires a more open logic model to be articulated and built around so as to allow for more early ‘open’ thinking, exploring and investigating multiple options. Far too often an idea is screened out far to early and not explored in a wider context of ‘seeing things differently’. Equally the lack of flexibility of concepts simply moving through the innovation system with a one dimensional end result of ‘just’ product without exploring the value of services, or even combining them, can miss huge growth opportunities .
- The value and growing appreciation about exploring different Business Models has increasing value. Providing the necessary space to explore emerging opportunities with new business models is becoming a must for accelerating growth through innovation and experimentation. Showing that increased willingness to separate and develop more ‘spin offs to encourage the concepts to flourish is more frequent from larger organizations that will increasingly challenge the young upstarts. By showing more commitment to separating off exciting new concepts to bear fruit quickly and to be allowed to more highly focused, so as to deliver the ‘seen’ result will allow larger organizations to be more nimble and responsive than in the past. This growing willingness is altering the competitive landscape even more.
- The constant ’quest for growth’ will need an even deeper connection between Marketing and Innovation as they will continue to be two ‘twins’ as the strongest drivers of margin and revenue growth. What is required is to re-equip marketing executives with new skills in design appreciation, research expertise, deeper customer engagements and an even stronger voice at the C-level to drive innovation through its different avenues of opportunity (service, product, social, business model generation). Innovation needs to be a core capability within Marketing, not just given a cursory understanding or working through a narrow view, it needs deep appreciation of what and where it can provide this growth.
- The recognition that adopting someone else’s best practice is not the ideal way to go, it has been the ‘lazy man’s’ solution for far too long and really does need even more rigorously challenging. Defining your specific emergent or good practices that fit your culture and context are clearly better, adopting blindly others is not, yet still far too many do this. Your context, your culture, your resources are uniquely different and other peoples ‘best practice’ is not the right starting point. Somehow best practice needs a radical overhaul in what it provides and what it can inhibit. Far too often adopting best practice can be a disaster. Emergent practice should be the watch world.
- The art of spending wisely today is even more vital. The choices between experimentation, trial and error internally and learning from external expertise for understanding innovation needs to be worked upon. There needs to be a better appreciate of each other’s contribution. It still seems not be well managed, far to ad hoc and not well thought through. Admittedly external expertise has often failed to provide innovation leadership and the deeper thinking that internal expertise on its own simply cannot deliver. External advisors simply took over and then left at the end of their consulting engagements, leaving much simply not embedded within the organization.
- Contracting hands-on consultants should be seen differently from using external knowledge providers-they offer a distinctly different service and for me, the difference between consulting and advising. With growing complexity innovation specialization has increasing value, often this is not sitting on the teams bench, it needs bringing in and being valued for what this can give in greater appreciation. Greater external expertise needs to be injected into the innovation equation of many organizations for deepening individuals, teams and organizational understanding of what innovation can provide in its different potential. There is today even more of a business case for a deep innovation dive with external facilitation to graps new understanding and latest developments from a party that is 100% focused on the subject. The internal executive is often left badly equipped to recognise innovation’s complexities as it seemingly doesn’t fit their lens of the world and due to this organizations can discount much to their peril in the longer term.
There is a lot evolving in the name of innovation, all very healthy but all very challenging. Innovation needs to be treated as a critical discipline, to be built up, to be called upon where necessary. It is often not as well understood as it should be, on how it often works but it needs establishing far more within the fabric of each organization. It should be treated no different than the IT specialist, the accounting specialist, the strategic advisor, PhD researcher or sales specialist, innovation has a critical place and needs clear representation at the top table.
Place more trust in the specialists that have innovation as their expertise, internally and externally but give this the necessary ‘head room’ to be understood. It is time innovation as a recognized discipline should be fully embraced, ambiguities and all! There is a new wave of emerging innovation practice going on.