Recognizing it is all about Value Creation

I am reading a lot about the concept of value creation recently, it answers everything but tells us so often nothing about how it is made up or it is truly present. It seems to have that same ‘heady vaulted position’ as innovation in that we all talk far more about the ‘promise’ of it, we want it but still are not prepared to put the real effort into it to make it happen.

So let me try and explain my thoughts on value creation. So what is behind value creation? What drives it? What will tell us this is an organization where value creation seems to well invest in, nurtured, built and protected?

So what is value creation?

Value creation is highly dynamic, it is going on all the time and can increase, decrease or transform, in different ways, when you exploit your different capitals that will be in constant change and adjusting to reflect your organization’s business activities and eventual outputs. This is when you can begin to see the value created by the use of deploying all the capitals to build new growth and what I call “stock” that along with “flow”. I loved this explaination of the two.

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Building the Coordinates into your Innovation World

Most of us are very aware that Innovation can be fairly complex in what needs to be pulled together to take an idea or concept into a finished product.. We are also aware innovation often ‘flies’ in contradiction to the normal organization’s ways and wishes, especially the emphasis on working in structured, efficient and productive ways. Innovation can often be rather chaotic and discovery driven, it often is seen as counter-productive to the orderly state our organizations wish to achieve.

Yet it is that randomness, that serendipity, that sudden discovery that needs a different way of thinking and organizing innovation. It can still be well-structured and effective but it needs the opportunity to allow in accidental discovery, by-chance conversation, fortuitous moments that just seem to happen and occur as you are “open” to them. You need to have both structure and unstructured aspects to allow innovation to happen, evolve and eventually shape towards an outcome that changes the current status quo. Innovation should always challenge and question this status quo.

One of the useful ideas of using an external resource is to put additional coordinates into your innovation world, they see contradictions in a different way. They can assist in working through the conflicting signals, so as to help align innovation in helpful and thoughtful ways. Certainly, the innovator’s role is not an easy one inside the structured world of larger business entities.

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Eight possible pitfalls or sinkholes around innovation

Sinkholes or potholesWhy is it we always seem to fail back into the same traps or pitfalls? Bad habits seem to always reoccur even when we work on trying to eradicate them. Or we ignore the warning signs that were ‘signaling’ the problem until it is too late?

For me, innovation has eight possible pitfalls or sink holes that we need to consciously try to avoid. Some are in our hands, others are clearly out of our hands but all we can do is try to be aware of them so we can avoid them the as best we can. We sometimes need to be more prepared for these traps based on our judgement and experience.

1. Failing to make innovation explicit

If we don’t set the appropriate context, provide the background understanding or provide what we know up to now, we leave our ideas, innovation or intents far too open. We end up with thousands of ideas, with 95% useless as the context was not explained. Meeting agenda’s that have no structure do the same thing, we end up rambling and in a worse outcome than when we started. Making innovation explicit and aligned to the organizations vision, its objectives, its strategy and knowing what is core and what is not, makes innovators activities far more explicit.

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Tuning out, a need for simplification and better value

tuning out 2I have been totally struck by the overwhelming number of webinars being offered to me on a daily basis, all related to innovation and all free. Am I the only one getting overwhelmed in choice, underwhelmed in content value?

This is a bit of a long rant, so turn away now those who love all the free choices you currently have, don’t waste your time reading on.

Those a little more curious, as my friend Michael Fruhling always says in his useful blog “then read on, dear friends….”

What do you get of real value when it is offered free?

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