Building Differentiating Capabilities for Innovation

pulling-the-levers-on-all-the-innovation-variablesWe so often get caught up in the building of our capabilities. In some ways, I keep attempting to “peel the innovation onion” in explaining the need to focus on building the capabilities in different ways but to be honest, it needs these various approaches to an ever-changing environment.

A different intensity of innovation onion perhaps? Why, well we have the business of today, the emerging business of tomorrow and the future business that will provide a radically different set of capability building needs?

The struggle to date is that innovation remains hard to manage well; we strive to systematize it and then attempt to replicate any success we then have, so as to achieve more, yet more often than not. we do not take into account all the variables that came together for that particular winning outcome. Often this does not work on a repetitive basis as the variables that make up innovation can be different for each innovation event or activity but we can learn under a growing ‘range of’ differentiating capabilities.

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Building the Core Competencies for Innovation

Building capabilities 4For my final post of the year, I went back to some of my thinking through, those around the building blocks needed in developing the core competencies for innovation that we need to have in place for realizing its true potential.

For me, the bedrock of innovation is built upon competencies, capabilities, and capacities and all these involve people as well as technology. They go hand in hand in our connected world.

Building these is the core of my own innovation offering in consulting, in advising, mentoring and coaching. My work constantly “maps” back to this essential three “C” of competencies, capabilities, and capacities.

Let me offer some thoughts that build around a framework I work through.

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Delivering the innovation core: building capability, capacity and competency.

Building capabilities 4Each organization needs to understand its strategic resources to build continuously, so as to sustain and grow the organization; otherwise it will eventually die, starved of what is vital to sustain itself.

The resources provide the lungs that give oxygen; they need to constantly be nurtured, too breathe and pump new life into the existing.

For innovation the same applies, we need to consistently build our innovating resources, they give delivery of the healthy living cells to promote and sustain us in new value potential.

The problem is we often are not very good at maintaining our resources and innovation activity. We just simply do not sustain our efforts, we tend to allow them to drift along or become lopsided from one individual teams efforts, while the others simply ‘wallow’ Continue reading

Making those increasing connections

I am always looking for innovations connections. This last week I’ve been working around some different themes that grew in interest the more I investigated them, both in their importance and messages.

I’m undertaking a rather exciting approach to describing innovation, within a collaboration venture, that gets more exhilarating and inspiring as we explore, clarify and document. Regretfully I can’t share this here at present but I certainly will when it gets to that point of ‘release’.

Some of the different areas or themes I’ve been investigating have flowed from one set of enquiries that have taken me into another and then yet another. These simply get my innovation juices flowing and really are allowing me to make so many new connections. Here is just a few of these in this last week that have emerged from some of my researching that provide a host of thoughts:

Leaders & Laggards

In this group of investigations I started in trying to gain a better perspective of the discussion of leaders and laggards and what differentiates them. Timely to these investigations has been some recent studies by Capgemini Consulting and IESE Business School with a recent leadership study “Managing Innovation: An Insider’s Perspective”

I’d suggest the slideshare presentation is well worth taking some time out to view and understand as it covers views from those leading and managing innovation in their organizations and how they think about the innovation function http://tinyurl.com/c9o7cuw

Then I have been reminded of the continued great work of Chris Zook and James Allen, both partners at the consulting firm, Bain & Company, in their article “The Great Repeatable Business Model” http://tinyurl.com/d483eqq

The message of differentiation and the level of focus on clear specific areas of innovation and its management makes a real difference for separating leaders and laggards.

Those that endure and adapt

In the article by Chris Zook and James Allen they speak of differentiation that tends to wear with age and often the real problem is internal. It is complexity and in this a complex organization forgets what it is good at, it proliferates, it losses key people, it moves away from its core business, it losses focus and it begins to have that ‘great disconnect’ between upper management and the front-line employees. It seems to me the organization just simply begins to break down and lags even more in performance and returns.

They go on and suggest a lack of consistency begins to kill the economies of scale and equally retards the organizations ability to learn that adds up to them struggling with increasing complexity and fading differentiation.

I was looking for some of the enduring points of what needs to be put into place. This was offered “When a company internalizes a set of principles, the message no longer gets garbled. A shared point of view, core beliefs, and a common vocabulary improve everyone’s ability to communicate and foster self-organization.” They go on and suggest “this increases the speed of business, you capture more growth opportunities ahead of competitors and accomplish more per unit of time.”

I also liked one comment they made that “up and down the organization, information slows and grows distorted.” I would suggest without a clear knowledge capturing and dispersing structure for information this is not the only thing that gets distorted, often it is the real values of the innovation activities themselves. Those products or concepts that emerge eventually as completely out of shape from what was intended initially, due to this complexity within the decision and approval process, become totally different before something eventually gets ‘out of the door’ in finished design. So much gets lost or ‘distorted’ along the way and the end result becomes far too compromised on the customer need it was intended to resolve.

Innovation effort may not be worth it

Equally I always enjoy the thinking of Vijay Govindarajan and in a recent article along with Manish Tangri entitled “Why that innovation effort may not be worth it” http://tinyurl.com/847ah4c they discuss two key factors of motivation and competence and how you can put your organization and its leaders to the test.

They ask two great questions “How hungry are you for innovation?” and “Is the initiative set up for success”. I did like the point made of “a leader provides direction under ambiguity” and how many of our leaders would be truly comfortable in doing this?

Looping back we need to ask  how far are you from your core?

We come back to increasing complexity, straying from our core, communicating mixed messages, showing a clear lack of decisiveness.  If your innovation message is not sharp and convincing up and down your organization, or even understood by your customers you eventually lose out, you become even more of a laggard and allow others to slip away into clear leaders.

Part of our need in organizations is to stop breaking down the parts, layering on that increased complexity. We should be designing the innovation framework and system to clarify and inspire more. We need to reinforce more on where the key differentiation points are. We need to be sharper in our understanding of true differentiation and stick to this.

The key here is the real need to simplify and focus down within organizations.  Also we need to seek consistency wherever we can, in communications, in our strategic intent and in our dialogues to clarify. We tend to do the opposite, we make it too complex and this is killing innovation, killing growth, killing organizations. Above all we need to work up and down the organization with some clear, compelling messages that give clarity, allows for the necessary linkages and make sure the parts reinforce one another.

The last part of my walkabout in my research was “Creative Destruction”.

I recently wrote a blog “The Innovating Era: Creative Destruction or Destructive Creation?” http://tinyurl.com/dyy964s and in particular the destructive creation part and how this was destroying more than what was coming in its place. I finished with this comment: “All I hope is it will let us make sure we put the emphasis back far more on the “creative” innovation part and not the ‘destructive’ nature we have moved towards recently”.

Chris Zook has just written on this “When Creative Destruction Destroys More than it Creates” in the last week in an HBR blog http://tinyurl.com/7pe8qvf and makes an important point (in my mind) that “the extinction of once-great innovators is less often caused by technological or market evolution, and more often by self-inflicted wounds and slow cycles of decision and adaptation.”

He brings us back to the point “it is internal complexity that turns companies into lumbering dinosaurs.” The suggestion is, if we can’t keep ourselves clear on simplicity and focus and really tackle complexity as this is the “silent killer of profitable growth,” and “the greatest inhibitor of adaptability”.

Leading the way does falls to leaders.

My last extraction was from another lead and laggard viewpoint:  “A leader doesn’t tell people what to do. A leader helps people understand what needs to be done and brings the people and resources together to make it happen”

We need to focus on our greatest strengths but to do this we do need to understand them. It seems to me, so many leaders surprisingly don’t have a clue on how and where innovation can contribute in lasting differentiation, where the growth should be coming from or how to galvanise the organization to be simply on the same page to make sure it can happen.

We need some consistency in how we set about innovation.  Sometimes what simply scares me is that this basic task is often missed off the leaders agenda to actually make sure it is happening, often because they has not been fully involved or understood their role in this.