Building Innovation Capability | Innovating in the Age of Ecosystems

The Age of Large Business Model Reinvention

Most of our existing organizations are searching for the mechanisms to reinvent their business models, through identifying, designing and executing differently from the existing ones, where they tend to simply be ‘locking themselves into’ repeating patterns, possibly opening themselves up to new forces of disruption.

There is a sense of urgency that is growing at the corporate level, to master this ability to design different business models and then set about executing them, to combat the multiple ‘disruptive forces’ swirling around in the present and near-term business environment.

Reinventing the Business model is such a big ask in the complexities to overcome, the legacies, the vested interests, the distribution of created wealth (dividends, bonuses, performance) are all ‘locked into’ the existing business. Many of those necessary bolder decisions get caught up in horrible compromise. Parallel managing is both an art and a science but it always needs clarity.

Addressing the current dilemma within business models

So we have a classic dilemma, we need to manage and extract as much as we can from the existing business but simultaneously begin to reinvent, to design something different. Continue reading “The Age of Large Business Model Reinvention”

The Understated Back-End of the Business Model Canvas.

So we all know a standard company balance sheet has three parts: assets, liabilities and ownership equity. The accounting equation states assets and liabilities are known as equity or net worth and this net worth must equal assets minus liabilities. The balance sheet summarises the present position or last audited position.

Well in the Business model canvas we have the cost side, the back-end, made up of the activities, resources and partnership aspects and a revenue side, the front end, made up of customer segments, channels and customer relationships. It is the ‘net worth’ of all these blocks that makes up their contribution to the Value Proposition.

It is the nine building blocks when we put them together, tells the complete story, a little like a business model balance sheet. Balancing this out thoughtfully does need that bringing it all together, so as to give others the compelling story and begin to mobilise around and attract the necessary resources.

My question though is this: “is the BMC understated at the back-end today and should we strike a different balance for more established organizations?”

Balancing the BMC BMC model is by Osterwalder & Pigneur. Visual source: Steve Blank — Balancing the BMC
BMC model is by Osterwalder & Pigneur. Visual source: Steve Blank

What happens when one side perhaps gets over emphasised?

Very much the orientation of the business model canvas is presently skewed towards the front end – the market facing part and rightly so. You are in search of a new business model, you will never find it in the building. As Steve Blank rightly stated “you have to get out of the building” to validate your assumptions or hypothesis, to search for the value in the real marketplace.

Continue reading “The Understated Back-End of the Business Model Canvas.”

Breaking out of the current economic dilemma needs radical innovation

I gaze through unbelieving eyes at the continued rise of unemployed in Europe. Unemployment in the Eurozone has reached another record high with the seasonally-adjusted rate for April 2013 going to 12.2%, up from 12.1% the month before according to the European Commission’s statistics office, Eurostat:An extra 95,000 people were out of work in the 17 countries that use the Euro, taking the total to 19.38 million. Both Greece and Spain have jobless rates above 25%. The lowest unemployment rate is in Austria at 4.9%.

It seems never-ending.

Youth unemployment remains a particular concern; you simply have to wonder what we are storing up in the longer term with this situation. Can the youth ever catch up, can our society as it is positioned give them the opportunities to turn today’s grim world into a world of optimism and contentment, or is it a lost generation? In April, 3.6 million people under the age of 25 were out of work in the Eurozone, which translated to an unemployment rate of 24.4%.

Why does this issue of growing unemployment seem to be drowned out by events that seem important on the day but realistically pale in their significance against something as damaging as this present crisis?

Examples of persistent economic and social challenges

We are facing significant society challenges. These include declining Economic competitiveness, deepening Social inequalities, rising Mental ill-health, increasing Crime and social disorder and we see growing Alcohol and drug abuse, to name some of the issues being increasingly tackled as part of the consequences of these tough economic and social times.

We must increasingly recognise that the cost of deferring concerted action to confront these growing set of social challenges is beginning to rise – and could easily outpace our ability to respond.

Can we afford to wait? There are so many pressing questions. Continue reading “Breaking out of the current economic dilemma needs radical innovation”

Casting-around with a wider innovation net.

When we ‘cast around’ we are looking for something; to try it out, to think about it, to search for connecting a vague idea with something more tangible. So let’s go innovation fishing.

The word ‘cast’ is around us in so many ways – anglers cast their line, we are cast adrift, we cast or drop anchor, we cast to put about, to tack, we cast our eyes upon the speaker, we cast light, we cast aspersions, we cast someone in a play, we cast a plan, we cast into a certain mould, are all just some of the many examples of how ‘cast’ is part of our everyday thinking.

In innovation, cast can become a fairly dominating action – we can cast about or around for ideas, to devise a plan, we can equally cast off those ideas or concepts we reject or simply cast out, or finally, we can agree to cast one’s lot into a plan or concept to take forward as a united team.

For me casting around is a most important part of how I work through innovation coaching. Continue reading “Casting-around with a wider innovation net.”

The Innovation Bunker – Avoiding Cognitive Traps Part Three

Often we forget to look back as we constantly get into that habit of always wanting to simply keep moving forward in our innovation activity. So, sometimes I would recommend we stop and reflect. I, for myself, keep returning to great thinkers in innovation to remind me and these can often bring me back on track in avoiding certain traps.

Part Three of the Cognitive Traps we find ourselves in. Go here for Part One and Part Two

I’ve always valued one terrific observation of Professor Clayton Christensen (of many thoughts) where he talks of the core theories of innovation. One small part:
He states “theory helps to block out the noise and to amplify the signal”

So I looked back at a theory to go forward to reduce our cognitive traps

If we link back into Everett Rogers Diffusion of Innovation for much, it is not a bad place to go. He firstly offers us his five stages of adoption or the decision stages of the innovation-process of Knowledge, Persuasion, Decision, Implementation and Confirmation. Continue reading “The Innovation Bunker – Avoiding Cognitive Traps Part Three”

Navigating the future landscape by developing adaptive innovation skills

So where are we focusing upon to make sure we are developing the right proficiencies and abilities we will need to manage our innovations of the future?

For me innovation capabilities and competencies needs to be far more adaptive and aligned to the different emerging skills we should be bringing to bear, so we are able to find better innovating solutions for our collective futures.

The issue is this: if we do want to reshape much of what we are struggling with today – poor growth, diminishing futures, disconnected communities, stagnating economies or ones struggling to emerge from devastated and austerity measures inflicted upon them.

We do need to change our skill sets to reflect a more realistic and up to date need to navigate and transform knowledge to tackle these. Often our present skills are not equipped to manage in these more “disruptive” environments. Continue reading “Navigating the future landscape by developing adaptive innovation skills”

The Business Model, a Canvas for Innovation Convergence

So where were you when this Business Design Summit was happening for innovation convergence? Did you miss it? Well kick yourself if you are remotely interested in where innovation is evolving too. I missed going as it was a sell out fast but I watched the live streaming.

So I had a more detached view but let me give you the flavor of what is bubbling up around the Business Model and its Canvas where a new (and older) generation of innovation ‘tool-smiths’ are all converging in a growing community.

In Berlin, held at the Classic Remise Berlin on 19^th & 20^th April 2013, around 250 people gathered around the Business Model and started to bring together the converging aspects required in any Business Models design in tools, concepts, and methodologies.

Lucky for many that were unable to attend, the wonderful thing was that the summit also was live-streamed and had a dedicated hashtag of #bdsummit. I watched it and got very caught up in the event. They plan to release the presentations and I think a whole lot more from this summit in outcomes through most probably the toolbox center to build better Business Models.

This summit became the place of the innovation ‘tool-smiths’ to meet and exchange so as to begin the forging and crafting of the new tools needed for innovation. These are aimed to help us in todays and tomorrow’s world where innovation is more central within business strategic thinking. Continue reading “The Business Model, a Canvas for Innovation Convergence”

Innovation is like a Rainbow

Last week I was driving home after a round trip of 700 kilometres and as I got caught up in some evening traffic, the sun and the rain played that magical trick of offering up a rainbow to the ones in that right position to see it.

There was the actual end of a rainbow for us to see and it triggered two thoughts – the mythical pot of gold if you actually get at the rainbows end, and then my later thought “innovation is actually like a rainbow in so many ways”

The Rainbow Effect

They tell us you can never reach the end of the rainbow because the rainbow is a little like an optical illusion. The rainbow is formed because the actual raindrops act like thousands of little prisms that refract and reflect the sunlight towards you. So when the sun combines and those millions of raindrops have this light hitting them and split the colours for your eyes to see the effect.

Even when you change your position, the angles change and you see the rainbow at new angles of these little prisms. The ability to see the rainbow is that you have to be always be that certain distance away, even as you try to move towards the rainbow, it stays that distance away from you, so you can never get to the end of that rainbow.

I just think for many of us, that innovation is often just like that! So it got me thinking. Continue reading “Innovation is like a Rainbow”

The Present Jobless Innovation Era We Face

Over the last few months I have kept going back and forth on Professor Clayton Christensen’s paradox he has named “The Capitalist’s Dilemma” and been relating it to this jobless era we seem to be at present.

This idea ‘hit the world’ when he wrote a piece in the New York Times last November, 2012. I gather this has been one of his best, if not his best read article ever.

As I’m sure you are aware Professor Christensen must be regarded as if not the top, then one of the top experts, on innovation. For me he sits at the top, so when he explores a theory, you stop to think about what he is trying to explain. It takes some of us mere mortal awhile to grasp and relate to these ideas and theories.

Theories into solutions sometimes is a long wait for wrong reasons

Firstly an aside, I need to get this off my chest. Although I suspect a book will eventually emerge, perhaps only next year 2014, far too often this is a little later than preferred or when really needed. The ‘currency’ or present day relevance often suffers from this parallel world of academics, moving on a much slower level.

They are still working within the publishing strictures and structures where a book has to be firstly written, reworked, proofed by editors, printed, bounded and distributed.

As you might guess here, I just wish some of these breaking theories that emerge from the academics could be sped up, they are seemingly just caught up in the dogma of rigour, validation and peer review. Weighed down in this legacy they often fail to provide the valuable insights that can alter the present day where the theory or dilemma has arisen.

That valuable thinking to address the very problem we need a solution too is today not having even further debate after a book comes out, sometime in the future. We need to begin to travel the road, not just survey it! Continue reading “The Present Jobless Innovation Era We Face”

The Cascading Effect Needed for Innovation Success

Getting innovation through any process of understanding is hard. Knowing what is required to generate innovation throughout an entire organization is even more so.

We need to deploy the cascading effect on innovation

Often we fail to understand our role in contributing to innovation, we need a cascading effect. For me the “cascading effect” for innovation is “a sequence of events in which each produces the circumstances necessary for the initiation of the next”.

It is the presenting of an idea, a concept, prototype, a piece of knowledge that provides the catalyst to be exploited in a broader community as the next step and so on. It cascades. It is where we fit within the innovation web.

Innovation often has to go through a set of stage gates, or cross thresholds, set by others or judged to be the essential cross over points. When you achieve these cross over points you induce more resources, more attention and momentum.

The more it successfully progresses, it eventually gains a higher resilience and then the innovation picks up more for this “cascading effect”.
Continue reading “The Cascading Effect Needed for Innovation Success”