Strike! Innovation is on strike!

Many years back to sell newspapers, sensational headlines were conceived to get immediate attention so people would buy the paper. It went like this “Strike! Innovation is on strike! Read all about it”  Today innovation is actually on strike! Just take a look at this:

We are in the middle of an Innovation Strike -source Nesta.org.uk

We are in the middle of an Innovation Strike – source Nesta.org.uk

A strike of declining investment, of a lack of confidence, of not sharing in the belief innovation offers a solution to our continued problems of wealth creation, of economic growth, of galvanizing society.

So for many, innovation is actually on strike, we are not investing as we should according to a series of reports and analysis, focusing specifically on the UK economy, sponsored by Nesta. Nesta is the UK’s innovation foundation and they help people and organisations bring great ideas to life. They do this by providing investments and grants and mobilising research, networks and skills. They operate independently but are very central in shaping innovation thinking.

Extra! Extra! Read All About It! Innovation is on Strike!

Extra! Extra! Read All About It! Innovation on Strike!

You can “read all about it” through these links offered, firstly an Executive Summary and the downloading the full report from their site.

I offer a fairly extensive set of ‘extracts’ below, so read on:

Already a lost decade of innovation has occurred

According to Nesta “The UK economy has experienced a ‘lost decade’ of innovation, with new evidence showing that businesses had a crisis of confidence in the 2000s, prioritising cash and concrete over investment in innovation”.

* Nesta’s latest Innovation Index released back in 2012 showed that investment in innovation by British businesses has fallen (or collapsed) by £24bn since the recession began and has not recovered. This is five times the amount the Government spends each year on science and technology research.

* Recently a further view on innovation was expressed by Nesta in mid-March 2013 on how to use the Government’s purchasing power to boost Britain’s most innovative businesses, arguing there is a continued and urgent concern on how to get Britain’s businesses investing in innovation again.

Some major points summarized here

I cannot provide proper justice to these extensive reports or to all the contributors that make up its worth but let me attempt to pull out of these reports some headlines that seem to me the real underlying issues of why the UK, and many others, are in this period of innovation stagnation.

Nesta produces a highly valued innovation index for the UK, this showed in its third review

  • Innovation investment fell by 7% or £7.4bn between 2008 and 2009, as the recession began
  • A further fall of 14%, or £17bn, from 2009 to 2011, according to a survey of 1,200 businesses
  • After rising steadily from 1990 to 2000, innovation stagnated from 2000-2008 at 12% of private sector output

With a decline of £24bn, since the credit crunch in 2008, it is interesting that even in the period between 2000 to 2007 businesses investment in innovation had levelled off. Investments in fixed assets fell and became increasingly dominated by bricks and mortar at the price of technology. Companies accumulated cash and concrete in the 2000s, far from the age of innovation.

There has been an increasing disconnect between the UK’s financial sector and investment in innovation and technology. The 2008 financial crisis has turned into the longest downturn in modern times.

We are seemingly caught between the two sides of an argument, Plan A for recovery based on austerity or Plan B based on stimulus. We see the continued consequences of the hardening push for austerity  in nearly all the Mediterranean Countries, let alone the severity of the austerity part has continued consequences in the UK and the USA . As we debate this two dimension view there are crucial ways everyone is losing ground, especially to the developing world and its significant focus on its innovation activities.

Nesta argue for Plan I to be the ‘missing part’ for the UK to thrive as a productive, dynamic economy.

The report lays out in significant detail the areas of potential focus and why and what they can be achieved to reverse this set of trends on innovation investment and regain economic growth within the UK.

Firstly dealing with the question of innovation

  • The ability to turn ideas into useful new products, services and ways of doing things is the wellspring of prosperity for any developed country
  • The companies that invest most in innovation tend to grow faster than ones that don’t; and the countries that invest most in innovation do as well
  • Nor is it a coincidence that many of the nation’s doing best today in innovation have articulated a clear vision of where they think their future wealth and jobs will come from
  • Countries as diverse as Korea and Finland, Israel and Singapore have sustained a mood of optimism and possibility through the crisis, and given business a sense of the future gains that make investment today worthwhile.

A growing reality or a self-preservation attitude still prevails.

  • Unfortunately the current economic debate in the UK has pushed innovation and questions of long–term growth to the margins
  • But if we want to take advantage of the opportunities on offer in the next decade from new technologies, new markets, and new ways of doing things, we have to face up to the gaps, the failings and the many ways in which institutions and markets aren’t well designed to make the most of new ideas. They stay stuck in the past.
  • It is hard to calculate precisely the size of the gap, but some of the analysis that follows suggests that in the UK, they may be under–investing in innovation to the tune of £38 billion a year.
  • Transformation from industrial decay shows that change for the better can happen relatively quickly where there is the will. Currently we leave to many as “walking dead” and badly under support those in finance and resources required that show the way forward to ‘regenerate’.

The prize according to Nesta’s report is what innovation still offers us

Innovation drives economic growth. source- Nesta.org.uk

Innovation drives economic growth. source- Nesta.org.uk

  • First, the continuing advance of information technology is showing no signs of slowing down. Moore’s, Metcalfe’s and Gilder’s ‘laws’, which predict that processing power, bandwidth and network connectivity will increase exponentially over time, still appear to be in full force and can open up a dizzying range of possibilities
  • The huge potential of ICT is just one aspect of innovation. Other technological developments, from new advances in life sciences to the emerging disciplines of nanotechnology could have just as large an effect.
  • During this phase it may be the ability to integrate different technologies that will be critical — from genomics and proteomics to bioengineering. New materials, including graphene and other carbon structures, may lead to dramatic breakthroughs in manufacturing.
  • Social innovations also offer great potential. The wastefulness, in both human and financial terms, of the way we run our healthcare systems, the way we care for old people, and the way we treat the most excluded in society, is huge
  • The right social innovations could unlock as much value as many great social innovations did in the nineteenth century. During past periods of rapid change, like the mid–to–late nineteenth century, radical social innovation and reform proved essential for the full deployment of technological innovations, from industrialisation to the railways. The same is very likely to be true as the world gropes for a new approach to growth.

Most of these innovations will create benefits not just for those who develop and commercialize them, but also for those that can effectively deploy them, and build new services and businesses around them.

The poor state of the UK innovation system needs rethinking

The interplay of resources, people, ideas and markets in which innovation happens — much isn’t working well according to the report. What can be improved?

There are three broad ways in which the innovative capacity of the UK can be improved:

  1. Investment: increasing how much the UK invests in innovation
  2. Systems: upgrading the system of innovation so that these investments go further, including greater demand
  3. People: changing the underlying cultures and skill sets to be more innovation– friendly

Making the innovation system work better

The second factor suggested, that holds back the UK’s ability to innovate, is the structure of their innovation system and is worth one additional comment — it is the combination of the involved organisations, their links and forms that determine how new ideas become reality. For over a hundred years, commentators have noticed a contrast in the UK between the world of ideas and the world of implementation– what a lovely observation that is!

Designing an innovation policy

So within the report there are many policy suggestions but the aspect that stands out for me come in the way the Nesta’s reports suggest four design principles for effective policy development

A design that involves arranging fundamental elements according to a few overarching rules or ‘design principles’, and then they suggest we all furiously set about adapting and improving them in the light of experience. Keep it simple, effective but well focused.

The four are summarized here:

  • Experimentation. Innovation is a risky business. Breakthroughs only come from a willingness to push at boundaries, to take risks, and, sometimes, to fail. What matters is not backing winning projects every time, but backing a good portfolio of projects. Experimentation is not easy, especially in an adversarial political system, that is often very risk adverse due to this. Risks need to be taken in the face of huge challenges like ageing or climate change, as well as in making the most of great new opportunities like the Internet of Things or synthetic biology.
  • Entrepreneurship. Entrepreneurs are essential to an innovative economy: they don’t usually come up with ideas, but they do work out how to put ideas into practice. Entrepreneurship is also important to good innovation policy-making. The flip–side of an experimental innovation policy is the need for entrepreneurial leadership and challenge within the system. Entrepreneurial leadership within the system can be valuable. These kinds of entrepreneurial figures provide a valuable antidote to consensual policy that works primarily with incumbents.
  • Openness. Good innovation policy cannot be made by government alone and certainly cannot be delivered solely through state bodies. Innovation flourishes when businesses, research organisations, and intermediaries such as standards bodies and trade bodies come together to identify and address major challenges. What is important though is government cannot rely simply on assembling interested groups – this risks capture by incumbents and vested interests, it needs a very open platforms where all can participate, working towards their goals but recognizing the essential need of all the diverse participates on the platforms.
  • Ambition. Finally, innovation policy needs ambition, with the right mix of challenge and focus. Government’s power as a leader, as a customer and as a regulator matters as much as it’s narrow role as a supporter of research and development. Finland, Korea and Israel are all countries that have managed to make this a reality. In all cases, leadership has come from the top but been broadly based.

Making policy needs to guard against certain common present barriers

The process of making innovation policy must be future–focused. The value of foresight exercises are recommended which are not great at predicting the future but better at making those who undertake them recognise the future when it manifests itself

Policy also needs to be aligned. A frequent complaint made by foreign businesses looking to make major R&D investments in the UK is that government policy is poorly aligned: helping to orchestrate such things as land, planning, training, supply chain development, and links to universities

It seems UK innovation policy lags behind that of Germany and Japan for example, both of which use grand challenges as a way of organising and focusing innovative activity.

The report finishes the discussion section with this before it moves into specific proposals.

The endless public debates over responses to the economic crisis needs to change if we are to put in place a sustainable alternative to stagnation. We need business leaders who are willing to prioritise the case for innovation over other issues such as top rates of tax or regulation. We need to use critical moments of choice, we need to restore faith and trust, we need to unlock this huge cash pile sitting on many organizations balance sheets.

And we need political leaders with a deeper understanding of innovation (at present only a tiny fraction have direct experience), and an appetite to advocate it. Innovation needs political and public advocacy and argument if it’s to be widely supported.

In summary

Nesta are a tireless champion of innovation. The whole understanding that if innovation stagnates so does the chance for recovery, for wealth creation and growth in jobs, and in our economic activity. We are not ‘stretching’ for a better future, we are sitting back waiting for the right ‘fundamentals’ to return. They will not unless we decide to open up and reinvest in ‘things’ that have perhaps higher risk but contribute to changing today’s lack of dynamics.

This report might focus upon the UK but much of what it argues applies to most of the developed nations in Europe and North America.

We are told our corporations are awash with cash; our governments are strapped for revenue generation activities. Plan A requires austerity, Plan B needs stimulus but their balance requires what a Plan I can offer. To regain growth but at the same time manage what we have more wisely.  We need to balance all three.

I can only recommend you spend some time on the Nesta web site and value, as I do, their focus on innovation in solutions, stimulating debates, conversations and well-structured reports. They are one of the best sources to go, for appreciating the complexity of innovation and being able to “see” where innovation lies, at the heart of all our futures.

Advertisements

Determining our culture governs the greatness within our innovation efforts.

Managing a fluid, rapidly changing culture that promotes innovation is complex. So often it is left to chance, left to individual experiment and interpretation, far too ad hoc in its design and progress.

We certainly need to find better ways to encourage and obtain a higher commit to our approaches into building ‘culture’ and all it covers into our thinking, if we want to really have innovation deliver on its potential. Unless the values, norms and beliefs are not clearly thought-through and consistently reinforced daily through a consistent flow of initiatives to change, to explore, to learn from, any movement can simply wither and die from this lack of ‘total’ dedication.

The question we need to ask of our management is this: “if you are wanting innovation then we all need to work through the determinants that encourage innovation together” and then set about communicating these that are highly valued and expected throughout the organization, so as to encourage them to support and make innovation happen.

A certain commitment and a lack of patience

The issue is this can take a lot of time and dedicated commitment and sadly, management lack both patience and often that commitment to “seeing it fully through”, they seem to get side tracked and move onto the next thing. I feel management is sometimes like grazing nomadic animals looking constantly for fresher grass, impatient for the green shoots that are appearing from their sporadic grazing. They have no patience for lasting cultivation.

Maybe we need an Innovation & Culture Officer, even just for a given time perhaps, or we mandate the human resource group to allocate clear dedicated resources for a significant time exclusively on understanding climates factors and then setting about creating the culture to innovate with the board’s complete backing.

Leaders have to set the style they want from an innovating culture

Leaders are in the best position to create the environment that determines the culture and from this comes innovations end result, the outcome they desire. Too little time is spent by leaders on thinking deeply about what type of environment they want, what type of culture they need, often it is left to chance, to others to evolve not by design but by chance and personal interpretation. How wrong.

Leaders who want innovation need to offer a positive, supportive environment where the attitudes, perspectives and beliefs are well articulated and communicated. Asking people to change is not a one-off event, it is a constant, daily ‘grind’ but if you provide the right environment and enablers that innovation requires, you can get a positive reaction and you then raise the cultural expectations. These raised expectations  eventually translate into making the change needed for creating a culture for innovation. Organization culture is either a barrier or the real enabler to innovation, for it to come to life and thrive.

Offering the sum total

Culture reflects the sum total of a way of life. It provides the patterns, the values, the traits and behaviours shared within an organization that can make or break innovation. It clarifies what is possible, tolerates and allows for experimentation, for trials, for learning to take place. It creates an environment where trust can grow and confidence is channelled more and more into innovation experimentation, engagement and exploration.

Culture has the most profound influence on innovation’s success, it can’t be left to chance, it needs carefully designing and nourishing and this can only come from the top allowing it to grow in well thought-through and designed ways. This climate being built often cannot be touched yet the actions can be felt in multiple ways to promote that environment where innovation flourishes.

Fostering the right climate is critical

The fostering of the environment, the building of the culture to pursue innovation means different things to different people. Changing the environment has a great chance of changing people’s behaviour. A systematic planting of  ‘new seeds’ will eventually ‘yield’ an innovation result that ‘feeds’ off of this new culture that can multiply and replicate. Yet it does take this concerted and dedicated time and effort to constantly explore, adapt and amend as it is actually a ‘living culture’ that needs constantly feeding and nurturing.

It means providing the space to stimulate; a place to promote fresh thinking so the generating of new ideas is managed in a place that fosters interaction and collaboration. An innovation environment is made up of creating the positive atmosphere to encourage and nurture, to reflect and learn from failures that will inevitably happen.

You need to link and communicate, to offer  a place  where it is the ‘norm’ to challenge, to explore multiple sources of ideas, to provide a process and guiding set of procedures to capture and translate different thinking. A place where multiple interactions and connections occur so as to make innovation real and effective by providing the right environment and conditions to explore and extract.

Connecting culture to innovation makes it potentially highly touchable.

Culture runs through everything we do when we engage. We can ‘feel’ culture yet we can’t touch ‘it’ yet it always touches us in so many ways. Innovation on the other hand we can touch, we can see, we can strongly relate too, it becomes tangible when it moves from an idea into the realm of reality as ‘new’ to the world. When you combine culture and innovation in the right ways it becomes a very powerful force that transforms and prevails, it mobilizes and can galvanize us to great things.

It is when culture offers us a more creative environment, one that gives us a greater security than one based on living in fear and insecurity we grow in confidence, we open up our minds to increasing possibilities, we want to learn and experience and these matter to innovations ultimate success.

Innovation takes on a powerful identity from its cultural roots that transform attitudes into actions that then become those eventual outcomes we look for in what we do – greatness in our innovation efforts – that can be seen, valued and held up for others to admire.

Why we often can’t self-disrupt

In the past few days I enjoyed listening to a webinar by Clayton Christensen and Max Wessel for the Forum for Growth and Innovation, a Harvard Business School research centre initiative.  The Forum for Growth and Innovation seeks to develop “breakthrough theories to help businesses become more successful innovators and create new, robust sources of growth”.  The webinar was all around surviving disruption but discussed also “looking beyond the horizons”.

The Theory of Disruptive Innovation

To offer a quote from the Forums own website (www.thefgi.net.):  “Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors”.

“An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill. Characteristics of disruptive businesses, at least in their initial stages, can include: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics”.

The webinar raised in my mind many unanswered questions.

Central to the thinking for disruptive innovation is to address the jobs-to-be-done. Another nice piece that describes Clayton Christensen’s work in this area of JTBD is here. This seemingly simple idea has profound implications for re-framing industries.

Well in many of my unanswered questions there are some JTBD aspects clearly to this as well. Still that is another story for another day.

One question I had was this:

“Why do we have internal difficulties to self-disrupt?”

In most cases organizations are not able to self-disrupt and this is largely covered by this veritable list of constraints. So I set about thinking what these could be, here is my rather ‘stark’ list, can you think of any more?

  • Organizations often are far too close to existing markets to recognize that they are actually shifting; they ignore or miss the signs in many ways.
  • They get so fixed on their own perceptions they don’t see change coming – often until it is too late and have lost that intuitive, entrepreneurial touch within the mix.
  • They have invested too much, they hang on, often reducing prices, pushing more volume into the markets, crank out even more “extras” to try and off set change.
  • Organizations are full of rigidities, rules, procedures, processes and personalities and often no one is prepared to put their hand up to challenge the present paradigm.
  • The reinforcing values are just plain tough to change, you need dynamite to shift these
  • The people within organizations love the comfort of the nest they have built around themselves, who wants to bail out and expose themselves?
  • The processes become over burdening, hard to change, far too complex to change without significant commitment and top management support
  • Cultures are wonderful things but the dark side is they can stifle and constrain far more than promote and let free.
  • Leadership is locked into the strategy, tied into compensation on delivery on the existing, not on the preferred, far more radical, risky alternatives
  • Organizations, especially large ones are less than nimble, they fail to adapt and respond quickly enough – they prefer to double-down’ with more of the same but faster, leaner and more determined than ever, missing the real dangers occurring under their noses
  • Today, we are putting more and more of our organizations into boxes, they are becoming highly structured and specialized to maximise effectiveness and efficiency.
  • Markets are more global, faster, fiercer to compete in, often organizations are reluctant to explore and experiment with new business models, or push into adjacencies for fear.
  • Lastly it does not matter how hard many organizations try, they lack real intelligence in market and customer needs, hence why the jobs-to-be-done is one essential component.

While all these stay in place, or not recognized as inhibitors to your own disruption capabilities, it is not surprising it is in the end those up and coming usurpers, the nimble and unencumbered, that thrive and begin to disrupt. You simply struggle when you leave it to late- your organization needs to resolve many of the above issues before it is ever capable of responding.

Look more in than out – that is where your danger often lies

Sometimes we are spending all those significant efforts scanning the horizon for the next big disruptive ‘thing’ but in the end it is the internal difficulties that ensure it is ignored until it is too little, too late. Work on the warning signs daily.

“Perpetuating history”, as Clayton Christensen would certainly say, “simply opens the doors to disruptive innovation”. We need to really recognize ALL the symptoms on why we can’t internally self-disrupt. Surviving disruption is something we all need to take the survival course on, so we all can recognize and deal with its introduction and constant threat to total disorder and multiple impact points upon our business. Watch out, disruption is all around us.

Reorganized, delayered and downsized – goodbye trust.

So who has not faced one of those moments when it is announced that there is a reorganization about to take place. It often has the habit of freezing what you are doing; you begin to put things on hold, waiting to understand what this latest reorganization has in store for you. The questions build up in your mind, it starts to block you. Creativity begins to be lost. Certainty suddenly gets replaced by growing degrees of uncertainty, as rumours begin to feed rumours.

Management have simply stopped innovation in its tracks, until they unfreeze it with the new organization, as long as it makes sense. If it is clear and logical then its effect is not as disruptional as it might have been initially feared, innovation can return quickly. If not and when it is badly described, planned for, executed then its a different story. Equally when reorganizations are allowed to extend over those sometimes intractable time periods, dreamed up to ease the pain, you can say goodbye to innovation for weeks, months, even years. You actually might even never get your ‘innovation mojo’ back again.

We suffer continuously from the effects of reorganizations, of new policies, of redefining a business that suddenly wakes up to a reality most within the organization spotted ages ago. It gets even tougher when it has a delayering or downsizing effect. Then innovation simply goes into the deep freezer.

Structured changes when they come ‘out of the blue’ or talked about in whispered conversations for months totally weaken the underlying structure of one of essential tenets of innovation, that of trust.

Trust is often built or destroyed in what we do

In order for innovation to flourish in any organization, a culture of trust and openness must be established. There’s a direct and strong relationship between organization trust and innovation. Trust is extraordinarily fragile, so is innovation for much of its life before it is born, ‘seen’ and valued in the world.

Trust may seem like a very vague and intangible notion, but it has such value in today’s world. When we trust, it is decidedly real and concrete when it is present, it often moves the needle from one position to another one, infinitely more preferred and wanted to be central in our needs.

Innovation has some similarities to trust,  it starts in a very uncertain fashion, the more it is worked upon, seen and valued, the more it grows and gains, it grows a broader community identity it moves into those real and concrete-valued new concepts, service or business model. Something new can move the needle to something ‘new and preferred’.

Trust is so emotional, it means different things to different people. New innovations stirs our emotions equally well. Trust and innovation both need consistency and being fair, each relies on delivery of its promise.

When we attempt to break our existing social contracts both innovation and trust can equally suffer.

Trust is based on a consistent experience of competence, integrity, honesty, transparency, commitment, and familiarity. Any change or challenge to this stops us often in our tracks. We become defensive; we tend to go into ourselves until ‘things’ become clearer.

Transparency and trust are at the heart of any innovation work that is worthwhile and transformational. Trust is a real driver of high performance. If we undermine it, we lose  momentum, and we lose our ability to allow creativity and innovation to flourish.

Innovation activity becomes stifled until trust comes back into the equation by not just only being part of our social contract but in how and why we personally work, as well as in our trust in each other. It gives us a mutual reinforcing, a bonding that is stronger than often just the separate parts. Trust is a foundational bedrock for us all. If we lose that, we lose ourselves and what we stand for.

Getting going again after any reorganization, delayering or downsizing has happened does take time. How should we go about it?

If it is well understood but in many cases often not, that trust is a real driver of high performance then we need to manage everything that is potentially endangering this ‘trust’ in very focused, determined and explicit ways. When organizations make the decision to reorganize they must manage this in a business-like, integrated way, across the enterprise and we can apply the same management rigor that is applied to managing for the bottom line they might recover faster.

They also need to think through all the connections, networks and collaborations that trust makes up such a high level of the ‘deal’. Making reorganizing moves that undermine essential relationships stirs up emotions that can equally silently damage any recovery for much longer than anticipated initially. Getting trust back into its essential place is crucial.

Keeping trust equals keeping innovation flowing.

We know we weaken innovation when we make these structural delayering or downsizing decisions until we have fully bedded in the new organization. It needs time to be ‘judged,’ to see if it will deliver on its new promise, to make up part of a newly defined social contract.

If any change is not seen and recognized as being potentially positive in the long run, innovation is within the first group of activities that leaves. People simply make innovation work and those highly motivated by innovation, need a trusting environment or simply switch off or walk!

The focus needs to be on repairing and re-establishing.

Firstly we need to repair all those vital internal and external points of contact within individual’s networks that were suddenly disrupted by the reorganization or the delayering effect. We need to re-establish individual and team trust so as to ‘fuel’ again collaboration that brings into the organization fresh innovation impetus.

We need to re-establish confidence within our networks and relationships fast. Innovation today is far too open and if you don’t understand what makes up the innovation value chain or more importantly “who” then some of the decisions to delayer, reorganize or suddenly asked to retire has a greater effect than you realised. You have a bigger hole than you thought and filling it becomes a significant consequence and sometimes organizations suffer a  major knock-on effect, not realizing this until far later.

We need to reach out and re-connect.

We need to understand what we can really lose in ‘experience’, in all the network effects, with the changes that can take place from re-organizations. Suddenly that past and well established “connect and develop” needs to be “re-connect to redevelop” as trust needs to come back into the innovation equation. In today’s more open innovation world we need to be more thoughtful of what can happen if trust is altered, as relationships change and it is not given its critical place within the innovation equation and the organizations evaluations.

We can rapidly undermine trust when we do reorganize, delayer and downsize and the risks of weakening the underlying source of innovation become real. When organizations are pushing for more breakthrough or transformational innovation, any reorganization needs to be well thought through. Innovation can be seriously undermined in more ways than initially recognized.

You manage this thinking through badly and you lose that essential connection into trust and the innovation engine simply stalls. No amount of ‘fiddling’ after the event gets it going again effectively until trust has come back into the central part it plays, within any new organizational equation and especially for innovation. Never underestimate the value of trust.

Exploring and amplifying innovation

In my innovation travels I’ve always liked to explore much of the less understood sides of innovation. I have set about to try to explain them. I’ve tried to relate them to the aspects of everyday innovation, give those novel and logical frameworks or some method and structures to approach them, so they can be integrated into this work.

Some have worked better than others. I believe we do need to constantly push the boundaries of innovation, experiment and explore to advance the management of innovation and its understanding.

Getting innovation into the organization mainstream

We do need innovation to enter the mainstream of our everyday thinking, to be something we all feel naturally comfortable undertaking, as part of our make-up for our growth or prosperity. Presently those that are not fully picking up on the value of innovation are happily assuming others are fully active and totally switched on to all that makes up innovation potential. We need to get them involved.

Those that have not fully realized they are as essential to contribute to a sustaining future, based on innovation solutions, so that we can collectively tackle growing societal problems. We need to move the ‘many’ from being the problem to being the ‘engaged’ in mapping out the innovating future so innovation can fulfil its latent potential.

Drawing in the vast majority so we all become innovation savvy

We do need our roadmaps, our blueprints of innovation, our common points of understanding. They are essential when we decide to undertake any journey in our lives. If you don’t have the essential of a compass, spare food and drink, warm clothing, good walking or mountain shoes then you should not venture out into the mountains, you give them a certain respect; I think innovation deserves that as well.

If we do not come together and gain a common language for innovation, not as a throw away buzz point, but as a unifying point, we will never be able to teach and transfer innovation to all the others that have not bothered to pick up on understanding the innovation language.

Why is a common language for innovation important?

Innovation has so many pockets of confusion and traps to fall into for adding to our inefficiencies. We still see so much fragmented energy, plenty of differences of approach and potential misunderstandings. It often saps the very juice of innovation. Organizations have plenty of unproductive capital, even when they hack away at all the undergrowth.

Resource allocation required for good innovation remains patchy, under-served and often starved. We all become increasing busy at fixing what we have, trying to understand those hidden costs, spent energies and lost opportunities.

Until we arrive at a more uniformed approach to innovation, improve the management of innovation and its development within our systems, structures and processes, we will stay stuck in constant re-invention and duplication.

Seeking a common language allows us to form ‘stickiness’ in value, it becomes the glue to align the parts that make up innovation and forms the whole we seek. It can offer a different viewpoint on our future, one that challenges us to evolve and explore. It helps provide a sense of community, a common sharing, a common purpose.

New report: Improving returns on your innovation investment

I highly value the studies that are undertaken by the larger consulting firms. They have the C-level access and geographical reach to give us some critical insights into the progress of innovation.

Recently Arthur D Little provided their latest innovation excellence study, its 8th Global Innovation Excellence Study, into what companies can do to achieve a better return on their investment in innovation management. The report can be downloaded or viewed here and outlines in their opinion what really works in terms of managing the innovation process.

They offer some good pointers and understanding of what differentiates top innovators within and across industries. It also suggests that it provides new insights into what companies can do to achieve a better return on their investment in innovation management. I think it does fall a little short on a depth to support and validate these claims in my opinion, but it does still provides sound insight.

They specifically attempt to focus on understanding what differentiates top innovators from other companies in different industries. Drawing on over 650 responses, the study sheds new light on the basic key question: what innovation management techniques are most important in achieving a better return on innovation investment? The results they suggest are important for any company that wishes to stay competitive.

Overall the report highlights six key insights:

1. There is strong evidence that excellence in innovation management based on Arthur D. Little’s model leads to higher innovation performance.

It is such a pity they lead off with this ‘claim’ adopting their best practices helps to achieve innovation success. I would strongly argue adopting any good, coherent framework will contribute to improving performance, providing you give this the dedicated focus, resources and top management commitment. I think they have put the “cart before the horse” by leading with this.

2. Top quartile innovation performers obtain on average 13% points more profit from new products and services than average performers, and 30% shorter time-to-break-even, although the gap is narrowing.

They argue the gap in best and worst performers has narrowed in recent years and past under-performers can and do catch up and maintaining a lead in innovation performance is getting harder. I’d have liked to have this observation explained or validated some more.

3. Innovation performance achieved has decreased on average since 2010, yet satisfaction with this level of performance has nearly doubled

This is the really  interesting point for me.

Comparing 2010 and 2012 results, they found a significant overall decrease of up to 25% in innovation performance across a range of industries and suggest this may be driven by the tough market conditions of recent years which have forced companies to focus on short term performance, as well as issues specific to certain industries.

In contrast, they found that overall satisfaction with innovation performance increased significantly from 25% to 42%, although the majority of respondents are still dissatisfied. They conclude on this point that this might also reflect recognition that innovation success is getting harder to achieve.

4. There is a clear correlation between capability in innovation measurement and innovation success, yet less than 20% of companies believe they have a good innovation measurement capability.

What they found as more surprising is that less than 20% of companies believe they are better than average in innovation measurement capabilities and indicates the level of dissatisfaction with their efforts to measure innovation performance.

They offer the view this underlines both the inherent difficulty of effective measurement of innovation, and the significant potential for companies to improve their capabilities in this area.

5. Certain innovation management practices have a particularly strong impact on innovation performance

Top innovation performers invest relatively more in radical improvements to products, services and business models, as opposed to incremental improvements. They suggest there are four basic practices but the key, for me, is the one of mobilizing the whole organization to develop new ideas. I would argue mobilization across all that innovation covers is critical, not just new ideas but ideas to commercialization.

6. Top innovators do much better in adopting best practices in accelerating growth

The study found that top innovators are better at identifying unmet needs, fostering an entrepreneurial culture and leveraging existing key competencies.

Another really important point for me that is often understated.

They pick up on it is the organizations ability to overcome important internal challenges such as getting top-management support, enabling fast decision-making and establishing productive cross-functional relationships that gives them innovation leadership.

The conclusion of the study.

The study concludes with the two important insights: there is a strong correlation between adoption of new business growth practices and achieving innovation success and top innovators are more effective at dealing with internal barriers.

I think the study gives encouragement that having a focused, disciplined approach to innovation does make a difference. By tackling the internal barriers successfully will change innovation performance. It is not a ground breaking study but it does offer some helpful focal points to improve organizations performance.

The real disappointment for me?

I still feel disappointed they started off with promoting their own model as blatantly as the reference point to success. I am not a lover of  generalizing around “best practice”. I’m of the school arguing for “emerging practice or novel practice”.

I also wonder if they have not fallen into this old trap of perhaps practice leader’s self-justification for this study, hard as it might seem as a comment. This tends to be for me the older consulting practice approach of self-promotion that I believe actually constrains your perceived value to clients. Today a more detached view seems to offer greater consulting judgement even in best practice observations.

I quote from www.sourceforconsulting.com in a recent article “Consulting firms need to re-think their approach to thought leadership from scratch.  Less money should be frittered away by people writing whatever they want and more invested in centrally co-ordinated thought leadership.  Some seriously innovative thinking needs to go into developing a game-changing approach to content or publication”

I would apply this observation also to this Arthur D Little study. To quote again from the above www.sourceforconsulting.com article “Research is a good example: liberally distributing the results of an expensive survey in your publications used to be a differentiator but even the smallest firms do this now; primary research has to be either very clever or very big to stand out”

My final thoughts

I think the Arthur D Little innovation practice does make a really sound contribution to innovation practices without doubt. I think they can do a whole lot more actually.  I really do think translating their observations from benchmarking and best practice observations can be significantly lifted up in being real value differentiators by extending their existing toolkit at www.adl.com/InnovationExcellence into something more dynamic as a “must go to” source.

They need this deeper thinking through of thought leadership, aligning their innovation practice and the growing knowledge coming into them to provide a distinctive set of offerings . There are surely,  far more imaginative ways to offer us all more value from their studies, from their engagement and practice involvement than simply leading with “strong evidence suggests our model leads to higher innovation performance” and you read on with that growing feeling they are simply working backwards to this opening validation, as you read more of the report.

I think they can do better, they have the capability but not yet the right application and end goal. Innovation and its management needs broader engagement by the larger consultants.

There is a real leading innovation practice space to fill and this goes way beyond existing approaches made by the bigger consultancy firms or the ones exclusively focusing on innovation. A large diverse innovation practice can fill this space but it needs so much more. Will anyone step up to the plate I wonder, it needs it.

Thinking about scalable engagement

I wrote a piece sometime back on “people don’t buy product they buy meaning” and was prompted on this again fairly recently. See http://tinyurl.com/chvu2la for this. It is funny how this triggered a series of different thoughts which I’m going to try to explain here as I struggle with some disconnects on where we are going on engagement.

I first start out with engagement

There is an awful lot of disruption occurring all around us. Old behaviours, many well established ones that we were somehow seemingly comfortable with, are being suddenly replaced. We are being pushed far more today to search for achieving a greater personal meaning through a different set of connections, more remote, arguably more empowering and get offered in this deal the technology to make this happen, with ease and convenience in its place. What are we losing in this grand deal?

These shifts are changing our behaviours, they  are seriously challenging many of our (past) accepted practices, because as we suddenly feel more in charge, to do the things we want to do, simply when we want to do them, we depend less on others. We suddenly adopt new habits because they are better for us as individuals; they fit within our changing lifestyle. They “enable us to do”- they actually transform the way we work, think and interact. Old habits don’t die hard any more, they seem are replaced fairly quickly once you see the change in the value, and technology simply keeps prodding us down this changing road faster and faster.

Clearly it is technology that has given us this ability but understanding what is needed in scaling these engagements in sociable ways has not been as well thought-through, we are still experimenting and exploring the alternatives. We are becoming far less sociable yet more social in how we communicate. We need to bring the art of face to face conversation back into our lives, not one way monologs.

We don’t travel down to the bank branch any more, we don’t go and browse for books in a library or book shop like we used too, and we stay rooted in front of our screen for more hours than ideal, be this on a mobile, tablet or screen to complete the tasks that seem to grow not decrease. We reach out remotely when we need to, by simply asking a question or searching the data base. We stop making phone calls as these are often non-productive and we get really steamed up waiting in some queue only to find you are talking to someone in the Philippines or India waiting to go through countless security questions or simply not understanding the simplicity behind your question. Often as they have not shared in “what makes up your experiences.” We are making less time for physical interactions.

Then we go to scalable

Scalable has been rather painted into a corner in recent years. It is the way we can scale a business is dangled out in front of us like a carrot, it is implied it is material to success, as with scalability comes profit, as the tantalizing reason to buy into those projects that scale . I wish it was that simple. Does scalability alone mean achieving success?

No, scalability allows for greater engagement that has growing (social) impact and for countless millions that is important. Scale in the more developed world, through greater technology reliance and increased complexity required to deliver this into our lives is carrying higher risks associated with this. We are less dependent on people around us, more dependent on the technology and structures.

As we benefit from scale, there is this risk we are becoming more self-sufficient, more disconnected, opposite to what you might expect. We are missing the value of different avenues of possible productive engagement as we increasingly scale reliant only on technology. We need more depth in connecting into others, to regain real association and identification, not more of the ‘superficial’ stuff we undertake today stilting conversations, cutting off deeper evaluation or contribution.

So I come to the question are we improving our lives?

Technology is certainly changing our behaviours. It is offering us greater “utility and convenience” but it is shifting us from being sociable (the face-to-face part) to just using ‘social’ as our media, as our source and outlet. It is not lightly that those that are embracing technology or simply growing up with it, who know nothing else, are being called the “digital natives”.  A native indicates where or what we were born into, being part of a ‘certain’ race or tribe but is the digital world such a good place to reside, to inhabit? Will it really provide richer engagements? Eventually it can alter us all and how we interact.

We are at a sort of cross roads to what we mean by engagement.

If we stay ‘remote’ and increasingly hid behind our screens we loss the art of engagement as we have known it; in all our human existence – humans are or should be sociable animals. If we withdraw from the physical communities increasingly into virtual ones, we are radically altering our behaviours and until our heads get completely rewired we are in for more inexplicable moments of sudden confrontation, we are witnessing more and more. Hostile reactions increase, unreasonable behaviours surface but increasingly as the new norm, society begins to accept this as a price to pay,  should we?

We see this in small ways. For example you see this increasingly in sending over an email to the person sitting in the next cubical, or the student texting someone sitting yards away with a question instead of walking up to them and engaging.

I saw one recent comment: “It’s sad to know that we can’t have a decent conversation with each other anymore.” Or another one: “I went to text you just now and decided against it. Probably a better thing if we didn’t talk ever again unless we’re in a social situation where we need to. No big deal, really. I’m not going to make a big deal out of this”. A social situation where we need to? Are these the new norm, if so, we are seriously changing our social behaviours.

This is simply because it is deemed as becoming inefficient, to time consuming, not necessary but is this really the case? We are cutting of huge chunks of experience, of interactions, of humour, fun, and serendipity. We are actually becoming increasingly anti-social. Can technology and its entire array of amazing “apps” make up for this? I’m not laying blame at technologies door but we are being pushed in a direction of a very different social engagement. We need to concern ourselves on this and its longer term consequences.

Living in increasingly complex times

Our lives are certainly more complex, we seem to have increasing “friction” points, we can multitask better than the past generations or so we (mistakenly) believe. The issue is technology is ‘fragmenting’ more and more before our eyes, the more it offers new solutions, the more we get deeper into complexity and using all of our ‘spare’ time in learning anew and managing this.

We are actually becoming more ‘ubiquitous’ in ourselves not just “living in the cloud,” where all our information is increasingly sitting, but we are seemingly needing to be everywhere at once. This is a different form of engagement and one we are all learning to understand and scale too. We are constantly being challenged, to be engaged but in radically different ways than the past. Innovation is struggling to catch up with this in new helpful ways to keep us all sociable, not just social.

The issue for innovation is how to scale engagement?

As we engage in different ways, far more remotely, far more instantaneously for “all” to see, to prompt reaction, to gain instant feedback, we are shifting the way we engage with the world and others on an personal level. We are working hard at personalizing the message, the experience, the connection but it often is leaving a very hollow place, a space that engagement of the face-to-face type can fill.

I believe we need to have greater affinity, a great sense of kinship in our daily relationships otherwise our ‘interactions’ will be utterly dependent on technology and that alone is not sociable engagement. It still needs to be sociable, full of relationships that give that deeper, lasting meaning.

We need to learn to scale engagement that gives us “meaning not just products and apps”. We do need to buy more meaning that enriches.

Authentic, distributed, involved and scalable

Professor Katie Truss, at the Kent Business School, University of Kent has spent an awful lot of her time on engagement in her research. Check out some of what she has focused upon, it is important. She has mostly focused on engagement within organizations bit I do feel much of what she has researched also applies to all our lives and how we need to treat engagement.

Engagement should be a feeling, a mindset and a way of behaving where there is connection between the tasks we undertake, our role, our interactions but where we value the opinions of people and communities.

We do need to be insightful, to be better informed and raise our engagement not just in activity in the new ways we are all working and engaging today. It is not just for the sake of it, to be seen and active, but it is to be more being affective in gaining both our personal satisfaction of jobs being done better (and faster) but having as well that feeling we are being valued far more. We need to achieve far more positive emotional outcomes and deeper connections, we need to seek out being sociable.

As Professor Truss suggests it is in valuing performance, valuing opinions, valuing people and valuing (our) communities and we do need to scale these up in how we are engaging today. Innovation needs to work on this part of the engagement process before we lose the art of socializing. Engaging insights allow us to share and build more.

amended