Shifting dynamics in innovation

The sharks that prey are arriving a lot earlier now

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The Sharks are CirclingChange is all around us, it is accelerating not abating. Do you feel you are trapped, encircled and just a little concerned.

You often hear of volatile trading conditions, a more complex market and situations changing constantly and moving faster than ever. ‘Much’ seems to be closing in on us.

We do know we need to re-equip ourselves for constant disruption; we are really beginning to see a shift from the classic bell curve into more of a shark fin for adopting change.

One that is characterized by sudden, even violent success or an event, some moments of brilliant dominance, followed by a dramatic change in conditions as others have spotted the same opportunity and you hit a rapid decline, the race to the bottom of competition constantly negating one another.

Market are segmenting, the life cycle is shortening or having an even longer tail of dealing with slow decline and constant erosion of any competitive position. The sharks are arriving even earlier and in a greater need to show their dominance.

market_segments
It does seem “creative destruction” is a central force in many of our activities. Activities where innovation is continually replacing not just in products and new services but in designing radically different business models, searching to replace less adaptive competitors in the marketplace at faster rates.
Adoption is far earlier, the pace of change is quickening and from this, the competition is responding in new ways, often surrounding the new innovation with their version, built on often a really ‘fast follower’ principle to keep in step, and throttle off any different adoption, knowing what it costs to have to win this back over time if it can at all when it switches.
The life cycle is becoming even more important to manage in all of its stages, as its traditional shape I feel, is radically altering. It is coming faster and fading away quicker unless you manage its parts very specifically.

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Our inabilities to adapt needs changing.

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TransformationErosion is everywhere, it just seems inevitable, we somehow get caught up in the process of time and our organizations seem to ‘freeze’ before our eyes, then simply age.

They become fixed, rigid and locked into their established ways, not adapting to the changes occurring around them. We often give up and leave, moving on to better places and challenges.

We seemingly are reluctant to undergo any transformation, experimentation or adjustment in our organizations until it becomes a matter of survival, then its often far too late.

Then it becomes a mad scramble to transform ourselves, often with damaging consequences of deteriorating performance, battling more competition that are sensing our weakness, never capable of returning to those previous highs.

We simply  hate adapting or adjusting, certainly on a constant basis, we resist any form of ‘greater’ transformation – why?

If we can’t adapt to changing times, we simply struggle to survive, that is the growing reality operating in today’s environment. Simply put companies ‘die’ due to their inability to adapt to change and transformation projects fail because the message somehow fails to register and never gets completed to the original objectives.

According to a survey by McKinsey in 2011, 72% of our transformation programs fail to deliver on their original targets. Also one out of every two of our top organizations in the Fortune 500 will be gone, history, dust, taken over in ten years, according to the OECD.

Unless we create a strategy to transform, how can we re-imagine our innovation processes?

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The innovating power of ecosystems and platforms

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Ecosystem 1Our whole understanding of innovation is changing; there are numerous shifts occurring.

We are moving towards a new management of innovation where ‘greater’ collaboration is fueling new business models built on platforms, formed around ecosystems of communities with vested interest, contributing and extracting value.

Today and in the future, the value is created outside the individual company and not within. It is far more working as a constellation, drawing from an evolving network effect seeking out combined solutions from this design.

This third post of an extended series on my thoughts on “moving towards a new way of managing innovation” that explores the potential for changing the management of innovation, this looks at the significant value of platforms and ecosystems.

We need to find a new way of doing things differently around innovation and its management.

This is based on a relationship-based, networked designed concept built for collective activities. Relationships where shared value leads to a value creation that no one single organization can provide.

This requires open collaboration and an environment seeking mutual promise from individual input, contribution and extraction, delivering an integrated set of services and solutions being constructed on the platform from a sharing of knowledge, for delivering into evolving value propositions, all benefiting from, both collectively and individually

I am proposing in this series a view that innovation management needs to radically adjust and will be based on the thinking around the shift from products to solutions, from transactions to growing far more value-adding ongoing relationships, from a supplier of product services into highly valued network partnerships, exploring innovation across all options, instead of delivering on discrete elements; this requires managing the whole ecosystem of the innovation design differently through technology where platforms dominate.

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Shifting Radically the Innovation Business Model

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Changing the innovation business model
Shifting Radically the Innovation Business Model

I have been spending some significant time questioning the current innovation business model, from both the customer’s (clients) perspective and the innovation consultants’ one.

Now we all know not all things are equal, many companies have invested significantly in improving their innovation capabilities.

Many of these have been heavily reliant on outside help in achieving this position yet all the effort has led to limited returns for many and still a work-in-progress.

Yet far more of our business organizations are continuing to really struggle on their innovation activity for a whole host of reasons that seem never-ending, disappointing in end result and stuck in management quicksand to ever really change.

For me, the process and management of innovation really does need to be definitely questioned.

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The Compelling Value of the 3H for Innovation Management

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The Value of the Three Horizons of Seeing Beyond
The Value of the Three Horizons of Seeing Beyond

Following on from my suggested Common Language approach to the Three Horizons, I would like to outline here its significant value, within any innovation management thinking.

Clarifying our options requires multiple thinking horizons – seeing beyond for all possibilities by listening to the different voices

For me, the three horizons have great value to bring together and  map all the different thinking and possible innovation options over changing horizons.

You can frame innovation in alternative ways by using this approach. Innovation has multiple evolution points and working with this framework allows you to significantly improve all of your innovation contributions.

It goes well beyond the present value of ‘just’ fitting your existing innovation portfolio and directional management into a typical one-dimensional view of just working in the present.

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The Three Horizons – Providing a Common Language in its Innovation Use

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Forming a common view of 3H
Forming a common view of the Three Horizon for Innovation

As you may know, I have been writing significantly around the Three Horizons in relationship to innovation.

Initially drawing on the foundation within the McKinsey initial papers, updated here under their enduring ideas, and in particular based on by its original authors of the book “The Alchemy of Growth” by Mehrdad Baghai, Steve Coley, David White and Stephen ColeyThen I discovered the work of the International Futures Forum, based in Scotland, where a group of members have extended the 3H significantly, well beyond McK’s initial work from my perspective, into a broader, more robust methodology tackling complex problems.

It was this IFF work that excited me, it opened up my thinking to find better ways to deepen the innovation connections and framing that could be suggested in the use of this three horizon frame in exploring and expanding different techniques and approaches.

Connecting the innovation thinking dots

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Most Innovation is Becoming Business Model Innovation

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As we consider the interplay between innovation, business models and change, it becomes clear that many companies have a definition of innovation that’s far too narrow.

Increasingly we need to rethink the scope, depth and breadth of innovation possibilities, as well as the secondary implications of innovation.

Ignoring this broader definition of innovation means we can never achieve all of the possible benefits innovation has in store.

We believe ignoring the breadth and depth of innovation can also allow competitors and new entrants to disrupt your position or industry.

Fortunately, some of these definitions have been created for us.

Our responsibility is to understand the definitions and their implications, not stay constrained but seek and explore the broader options this can provide.

The Interplay in 3 Essential Change Points for Innovation

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The Critical Interplay 2There is always a certain impact that innovation brings, it should change habits, alter perceptions, improve our lives or alter the way we work and think.

Each change brought about by innovation does have different impact effects upon three important market constituents: customers, the markets and the industries themselves but also and often totally under-appreciated, internally on the innovator driving the change.

We need to understand the broader scope of our innovation

Until we understand the scope and impact of innovation we can’t fully grasp the nature and amount of change that innovation can unleash. It can alter businesses, shift markets and challenge customers to move away from their existing thinking into adopt this new product or service.

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The Interplay Surrounding Innovation

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The Interplay Surrounding InnovationInnovation should be the primary source of real change. Often when exciting new innovations occur they have the power to significantly change our habits, and choice of product, preferences and ways we set about our daily lives.

Yet why is it we often ignore the power of change when we design innovation?

We often fail to fully appreciate the changes that are occurring from the innovation we produce, it often seems an afterthought, there is this lead and lag effect and needs, firstly recognition and then addressing in how we manage innovation going forward.

In a recent series introduced initially and given a feature of the week prime spot on www.innovationexcellence.com on June 7, 2015, we discussed the importance of the emerging interplays.

This series will be re-produced here as it is an important concept to consider all the aspects within any innovation interplay.

The emerging concept of “interplays”

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The "C" change within innovation

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Change and InnovationWe all want innovation but often we take a ‘selected’ focus on the changes we are bringing about.

It is either in the external market place in new products, services and even new business models, yet we often ignore the amount of change we should be considering within our own organization.

As we ‘learn’ to innovate we ourselves change but often we are poor at recognizing these changes and the greater impact this might have on on all that is around us.

We miss opportunities to alter our processes, systems, structures or methods. We often fail to ‘advance’ in all the positive change innovation can bring.

We tend to ignore the change part of innovation
I believe we need to rethink this and evaluate the significant changes that should be taking place within our internal organizations as we expand our innovation activities.

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