The New Game Or Is It? Asset Orchestration

asset-management-for-innovationIn a recent post over on a dedicated website for discussing ecosystems and platforms, I was discussing the differences between Amazon and Alibaba. I quote “I’d say Amazon are “asset heavy” whereas Alibaba remains “asset light”.

They might be operating at the two ends of the current internet trading spectrum and are coming from different market maturity positions but it is the asset management that is becoming critical for delivering the profit or dragging performance.

Now Amazon is far from “asset heavy” when you compare them to the Industrial companies like GE but asset orchestration is seemingly getting far greater management time for all companies it seems. The lighter you are, the more likely you are to be more flexible and adaptive to respond to more disruptive challenges being faced by industries that are undergoing the shift to being more “digitally enabled”. Alibaba is very much a good asset orchestrator.

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The role Human Resources can play in Innovation and its needed Design

HR No innovation designThe management of human resource (HRM) needs to be replaced with the management of human creativity and ingenuity, as this is the triggering point to innovation success and delivering longer-term sustaining success.

The critical role of innovation is without question needed for the future growth, wealth creation and organisations potential survival.

Who is to drive the human change required here within our business organisations?

I believe within our human resource groups they must provide the people solution to building innovation capacity, they should contribute to providing lasting design impact and central engagement role in building innovation into the core fabric of the organisation. They become central to helping deliver, distinctive, radical, even game-changing innovation and that needs clear, distinct capabilities, capacities and competencies to be design into and innovation management system.

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Are we playing snakes and ladders with innovation?

Snakes and Ladders 1Have you ever played snakes and ladders? Called chutes and ladders in the US. A number of “ladders” and “snakes” are pictured on the board, each connecting two specific board squares.

The object of the game is to navigate one’s game piece, according to dice rolls, from the start (bottom square) to the finish (top square), helped or hindered by ladders and snakes respectively.

Originally from India the game is a simple race contest based on sheer luck and I am beginning to wonder if we are playing a new version of this with innovation? This is called “bust or boom” or “success or failure” or even “maybe or maybe not,” or even “will we, won’t we.” It just all depends on our luck in rolling the dice, a serendipity with a darker twist that many companies seem to be playing with their innovation capability building.

The game came to mind as I read through a recent survey on Innovation

I have just been reading an Innovation report / survey from Accenture called “Clear Vision, Cloudy Execution” and I really do think we are playing with innovation as a game, it has some really serious implications within it that need more drawing out than possibly offered in my view. We should be getting worried that many bigger companies are losing the innovation game.

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Achieving Innovations Capability Coherence

Coherence 1Innovation often fails to align to the strategic needs. This is often not the fault of the innovator, happily working away with no specific guidelines, apart from the general remit of “we need to be more innovative”, it lies in the boardroom that is not communicating the board’s needs clearly enough down the organization.

Building up our capacity to innovation does need to understand and reflect the organization’s business activities, as innovators need to grasp the value creation aspects that will deliver the necessary capital-efficient and profitable growth, and then ‘go in pursuit’ to achieve their contribution into these goals.

Even the basic questions often remain unclear, those of how are we looking to grow revenue, save costs, reduce working capital or improve our fixed capital? Managing our innovation activities can help in all of these. Actually if you ask I expect the CFO would say “all of them” but each does have implications on understanding of the fit and eventual role of innovation’s contribution.

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Developing talent to drive innovation

Talent for innovation visual 1I recently participated in a survey for APQC that was looking to identify the hot topics within product development and innovation. One or two hot spots surprised me, others less so.

In the round-up of results almost two-thirds of survey respondents have placed refining the identification of customer needs and remaining competitive in terms of profit at the top of their product development agendas. I like the increasing emphasis on identifying customer needs

Among the potential research areas respondents were asked about, they felt that developing talent to drive innovation was the most important. The second one was around rapid product development: How to Move Products to Market Faster.

The one that really caught my eye was organizations have allocated the most funds to improvement in developing talent to drive innovation. This is heartening but also a worry.

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A new raison d’être for HRM through Innovation

Innovation is in need of a significant transformation on how it is designed, developed and executed in most organizations. Traditional approaches to managing this simply need ripping up and redesigning to allow innovation to become more the central core.

In most organizations the Human Resource Management (HRM) function seems to have been far too often side-lined on shaping and influencing how innovation should be designed as a critical part of the future for the company. Many of the existing traditional HRM solutions might actually be in conflict and working against innovation actually.

If we look at the broad areas that HRM has to cover and master in organizational development today, it can, perhaps, leave little time for adding in innovation into this array of demands. You can understand that HRM has little time to master a ‘decent’ understanding of what makes up innovation, when they are grappling with so much already but they should. It might simplify or promote a rationalizing of some of the existing practices built up over considerable time as the expedient option but this is still creating a ‘lagging’ set of effects and not offering the ‘leading’ ones that innovation demands.

Today’s HRM role is demanding and complex, no question.

Let’s firstly remind ourselves what does make up a current HRM role in leading or participating in many crucial areas needing constant attention. These include planning and designing and the executing of change management, seeking out potential leaders, participating in career development and recruitment, managing organization capability and effectiveness in all its different demands called for across a diverse demanding organization.

This goes along with seeking out different designs to team building, organization transformation, building knowledge and talent capacity, let alone the classic payroll, reviews and turnover questions brought on by volatile markets, change of directions or global expansion.

I could add more but organizational development is an extremely tough, challenging and pivotal role, often under-appreciated and struggling to gain their rightful seat at the top table.

Adding innovation as a simple add-on will not work

So adding onto this veritable list of tasks we are appealing for a different approach and more focus on innovation, maybe a little unfair because it is unlikely to work.  I believe HRM should have a new raison d’être making innovation the central, repeating theme running through of all the activities currently being undertaken and mentioned above.

Presently HRM is little involved in the current innovation process where innovation is focused on developing and designing new products, services and often even excluded from the design of new innovation business models to find the best ways to break these out from existing organization design so they thrive and not just survive due to patronage alone.

The management of human resource needs to be replaced with the management of human creativity and ingenuity, as this is the triggering point to innovation success. The critical role of innovation is without question needed for the future growth, wealth creation and organizations potential survival. Who is to drive the human change required here?  I believe HRM should have a lasting design impact and central engagement role in this.

HRM has a crucial role to play in the needs to facilitate and underpin top-line growth through innovation design and bottom-line impact through risk balance and control as people are the essence of innovation. Individuals gain (new) insights, they offer idea generation and the capabilities to implement these through the designed innovation process as new introductions into the world that improve on the existing. HRM needs to make sure this is well supports and happens by ensuring the people factor is well designed into the organization, in every activity for making innovation the ‘way of life’ and well understood as corporately vital to be well support and consistently enhance in capabilities and capacities.

Reversing the current organization design

Over the past few decades, even the past century it has been the organization ‘knows best’ and decides and passes down, the teams are then resourced and empowered and the structure is put in place for the individual to deliver. Today that is not working well.

Going forward this top down approach will simply not work. In the case of innovation the reverse actually applies. The germ of an idea or insight starts with the individual connecting different strands of knowledge and combining these in new and often novel ways. Then they must go and convince others of its value, so they will support this and turn it into a project. This then needs to move up the organization for others to come on board to offer the necessary means, resources and support to achieve the eventual outcome.

Failure to move potentially exciting but ‘raw’ ideas into projects, then into reality by attracting required resource is becoming crucial to be managed. Recognizing this essential shift of bottom up is crucial in organizational design for skill development and approaches throughout the organization.

If we take just one example, the failure to take ideas forward as one area that needs to be treated differently than the current traditional judgement or measurement metric of valuing only ideas just going through the pipeline. If we value experimentation, prototyping and piloting of innovation ideas that did not fully work out or got combined or re-scoped, we can begin to see experiences gained, challenges resolved, obstacles overcome as learning points. This gives a different measuring approach that can reverse current design and reward and show the increasing value of exposure, practice and understanding as accomplishments that build deepening capabilities and highly valued in experiences.

We should be looking for the knowledge and insights gained as part of the robustness of the pipeline. This is one area where HRM can design innovation differently and intervene so as establish the impact of learning as one of the factors to enhance innovation capability. There are many of these intervention points that have a catalytic effect.

Those that attempt innovation gain valuable experience

If HR took innovation into the core of organizational design, the mandate for each person is to get involved in innovation activity to gain valuable experience that enhances the desired capabilities for the future. If innovation is seen as core, you begin to break down the present barriers and mindsets that restrict innovation today by current behaviours, blocking innovating activity or placing constraints in allocating the required resources to ‘allow’ innovation to flourish.

HRM plays the critical role in breaking down the existing barriers (cultural, environmental, structural) and determines the need for information and knowledge sharing to actively lower one of innovations greatest barriers today, the not invented here, that existing within organizations both in themselves and in opening up to external new sources of stimulus. HRM can find clear ways to foster innovation in more open ways.

Moving beyond today’s traditional competencies

In many organisations HRM are adapt at, or certainly working hard at the assembling, managing and deploying of resources to support the work-to-be-done. They pride themselves on managing labour costs, evaluating workforce performance, enhancing productivity and focusing on retaining valued talent. These are well within themselves but are simply not enough in such changing market conditions. They are reinforcing effectiveness and efficiency and these alone are simply not enough for securing the future, it is through innovation and creativity that is urgently needed to be added.

Future leaders need to emerge not from managing existing assets well but in managing in increased uncertainties, being more adaptive, agile and responsive to changing needs. CEO’s are demanding creativity, flexibility and speed to size up, quickly seize and grab breaking opportunity. These newer demanded skills come from knowing how and where to go, to be well-connected across platforms of knowledge, having close client connectivity and being able to extract all the essentials, resources and commitments to enable execution. Adaptability to constant change has a very different mindset to be developed in our future leaders.

The changing role of organization design

There is a consistent need to sustain and secure a steady top-line and bottom-line growth, CEO’s tenure is mostly based on this. What is increasingly needed is to go beyond this expected ‘state’ and deliver the ‘wow’ factor, which comes mostly through innovation. Here top managers have to seek out speed, flexibility and adaptability as outlined earlier in this article but they also need to go beyond this.

Managers need to find the right ways to stimulate innovation in creative and systematic ways and encourage entrepreneurship, more reciprocating in the transfer of knowledge, ideas and practices for pushing across boundaries for value creation opportunities. We come back to the ability to extract new value is in the individuals identifying, assimilating and exploiting knowledge and it is in recognizing this reverse flow, is where the HRM role needs to focus on a different organizational design.

For me building absorptive capacity is crucial and HRM needs to focus far more on understanding the value of this. I loved one suggested description on the absorptive capacity model.  Absorptive capacity is like the alternating current, whereas development capacity is the direct current. Combining this into a AC/DC innovation model then Innovation becomes the ‘power provider’ to growth requiring both currents, with one, a direct current flowing one constant way, whereas alternative current flows one way, then the other, continually reversing direction for knowledge generation that acquires, assimilates, transforms through exploitative learning. HRM needs to leverage ‘exploitation learning’ as a real need for building the power into innovation capability.

HRM needs to be on the cutting edge of innovation

HRM does need to step up and define a new mandate for innovation. If innovation is ever going to achieve a core place within organizations it has to be deliberately designed in for skill definitions, leadership development and knowledge and experiences gained. HRM needs to cultivate, mobilize and capitalize innovation.

To do this it needs to redesign its existing practices and approaches so at least four critical aspects become established as the starting point and way forward while a deeper understanding of innovation is gained:

  1. Recruiting always people for the potential to innovate and knowing what this means in inputs, outputs and expected organizational outcomes.
  2. Nurturing individuals and teams constantly in innovation capabilities and skills and setting about designing a comprehensive programme for this to take hold and stick.
  3. Recognizing and discussing in formal ‘learning ways’ the critical factors needed for success and equally acknowledging and recognizing the learning value of the failures. Valuing both in experiences and organization outcomes.
  4. Build on going diversity into teams, resourced across the organization, augmented with external resources as and when needed, so the teams are varied, distinctive and constantly changing and exchanging experience and are delivering innovation that makes a real difference to the future of the organization.

If this means employing external mentors, coaches and innovation expertise to bring HRM up to speed, then it is well worth it. Having a dedicated external resource to work with you in HRM has the same ‘outsourced value’  as many other activities deemed to be handled by specialists, receiving the support and inputs to your needs that makes sound economical and knowledge intensive sense.

Care of course, is in finding those that have the depth and breadth of required experience to work alongside you, to build up and transfer the appropriate understanding of those innovation needs, until it has been ‘embedded’ within HRM so it becomes fully absorbed and part of the daily fabric of the organization as a new core, well supported and constructed to deliver sustaining innovation.

HRM has a stark choice

HRM needs to take on a more pivotal role for innovation. They can become central for a lasting place to plan and significantly contribute to building innovation capability and capacity or stay more passive and operate always in the outer periphery of today’s and the future corporate relevance that innovation needs to play.

I believe HRM needs a new raison d’être, one that comes from grabbing hold of innovation and making this core to the organizations future design. Building capabilities and capacities for innovation are essential to our organizations future well-being and HRM needs to step up and become far more engaged.

The Real Need Is Achieving Innovation Fitness

So how do we become innovation fit?

www.innovationfitnessdynamics.com is new and perhaps your possible innovation work-out gym.

Firstly stop and survey our world from a new advantage point

Can you imagine standing on top of a mountain, looking out across a vast expanse of nothing but mountains and valleys stretching out before you. If you squint hard enough you can just make out that somewhere in the hazy distance, the end point of your travels. The distance you have to travel towards that much needed innovation understanding, that are made up of so many different dynamics that make you and your organization that much fitter to compete in today’s challenging world seems really far off, or actually is it?

Exhilaration can quickly turn to reality.

Clearly while you are on top of this mountain you feel exhilarated to have even got up to this point. To even get to there you have already made a decision that you and your organization needs to become a more innovation one and needs to look beyond what you have, to what is possible, you are curious to explore this further, you have to, innovation is a strategic imperitive for, adding value, growth and improved wealth creation.

You have innovation choices

You had some vague ideas on what that might mean when you set out on that first climb to achieve this first advantage point. What you never expected once you had got to this particular mountain top was just what the vista that had so suddenly opened up in front of you, would actually mean. The sudden shock of what might be in front of you suddenly became overwhelming; it stopped you in your tracks. You felt suddenly confronted on what all this might actually mean. Do you go on or go back down?

Starting any journey always needs a first step.

While you had lived fairly comfortably down in the valley below, you simply kept looking up wondering what it would be like to become a more innovative organization. What was beyond that one mountain you constantly looked up too? You had survived, sometimes you even thrived but much of that ‘success’ was actually outside your own hands, it was often determined by some luck, often those abilities to react to something quickly enough on what went on around you. You followed others, you adapted and adjusted to changes going on and kept simply going but you felt this was not a really sustaining position. You wanted to change this, you felt you just wanted to be more in charge of your own innovation destiny. The question was how?

The big idea, a decision to walk a new path with a journey’s end in mind.

Then the big idea came to you. The way  to change was to make a critical decision, to move on by following a new path, a path towards innovation fitness. Why innovation, why the need to get fit? What was the journey end you had in mind?

To help on your journey I believe we need to raise our game and provide a greater fitness to the way we manage innovation. The dynamics of innovation need to be understood

A new web site dedicated to Making Your Organization Fit.

Innovation Fitness Dynamics is a structured approach, you might want to find out about. There is a fair amount of information already ‘posted’ but in any journey you need to get prepared, to be equipped. Jog on over:

www.innovationfitnessdynamics.com

This blog is about offering you a pathway towards achieving your own innovation fitness dynamics

The journey has many peaks and troughs, mountains and valleys to forge. Firstly you have to understand your present fitness to travel on any ‘change’  journey and in this particular case, to achieve any innovation fitness is highly dynamic and challenging. There are lots of fitness points needed to transform your innovation potential from a simple follower to a leader, recognized and respected for your ability to consistently deliver innovation in a sustaining way.

The end goal of your journey is simply “the greater fitness you can achieve in innovation capability the more it can equate to a new value creation“.  The exploring of the terrain that suddenly is opening up in front of you as you look over the mountains and valleys is in need of exploring, of travelling, of searching out those different combinations you require to get you to your own dynamics of innovation fitness understanding.

Welcome.  You will find here your guide, your companion, to be available to walk alongside you on your innovation journey.

The first step towards achieving any innovation fitness is to decide that you are are not going to stay where you are and so you become aware, the second step is a clear acceptance that you have to take a journey. The first step leads one to the second.

“One’s first step in wisdom is to question everything – and one’s last is to come to terms with everything”

–  George Christoph Lichten- physics professor and scientist 1742- 1799.

We begin our journey, a journey full of innovation fitness dynamics.Visit:

www.innovationfitnessdynamics.com