I was delighted to be invited onto a panel with GE at their R&D centre in Munich this week. Dubbed “Innovation Breakthroughs – Igniting Europe’s Growth” They were celebrating 10 years of theopening of the centre and as you arrived, you saw the cranes at work to double the facility as well as further deepen their commitments within the surrounding community even further.
I always look forward to the GE Global Barometer and the 2014 report is no exception, actually it really has moved the needle on what is presently holding innovation back. The Barometer has explored the actions or constraints that senior business executives are worrying over in their pursuit of innovation.
The fieldwork was undertaken in April and May, 2014 and covered 3,200 phone interviews to people directly involved in the innovation strategy or process. It covered 26 countries and was conducted by Edelman Berland on GE’s behalf.
The supporting website provides the GE view of how this report reflects and provides an overview, an interactive, resources and key point headings sections to explore.
I personally think GE have actually been a little too low-key on this report and frankly far too conservative on the potential takeaways in reading their ‘take’ in the overview. It has significant implications for our organizations to grapple with but each is certainly not alone, it is a collective need to move innovation forward or you place much at risk if you don’t find solutions to the issues raised in this report.
This year the Barometer broke out of its past and steamed ahead.
GE have just released their latest Global Innovation Barometer survey and they are strongly detecting “Innovation Vertigo” from the survey conducted through more than 3,000 senior business executives in 25 countries.
This ‘dizziness’ for many is being caused by a growing unease with the continuing changing dynamics of today’s business landscape and uncertainty over the path forward. This is forcing leaders to think differently about how they will achieve growth. The good news though is it does seems that many are beginning to embrace this complexity by exploring new and sometimes unexpected opportunities to innovate.
According to Beth Comstock, the senior vice president and chief marketing officer of GE, “leaders are betting big on more unconventional approaches to innovation to unlock growth”. It seems GE are trying to stay ahead of the pack in unlocking innovation by exploring different markets, partnership structures and business models. Big data is accelerating up the inside as we have seen both GE and P&G, placing increasing emphasis on this, as a potential source of innovation insight they feel is presently missing.
The most important point comes back to these tensions or vertigo being felt, that is showing through in this report, between the desire for globalization and protectionist temptations that organizations sometimes tend to favor. It seems as our leaders are being pushed outside their comfort zones they are having this uneasiness with the pace of change and confusion over the best path forward.
I’d hazard a guess on what they feel as ‘vertigo’ does go beyond the usual symptoms of light-headedness and dizziness and is possibly far more: that of a chronic lack of solutions beginning to creep into their psyche as their worlds are spinning out of their control, to stay managing in the ways they have been. Perhaps welcome to our world Mr Leader.
As many of them will be gathering in Davos, Switzerland between 23rd to 27th January 2013 (http://tinyurl.com/afde4w5) I think the higher than usual altitude, will not help their brains or nervous systems as the whole economic system is still out of balance, so having “Innovation Vertigo” is part of a bigger malaise I would expect.
Still, here are the top line summary points of the report
The protectionist debate
There seems a growing undercurrent of wanting protectionism but making sure it works in their favour. This could be trying to get Governments to prioritize promotion of domestic innovation rather than imported but many others continue to feel markets need to be opened even more to promote the imported innovation and attract the (domestic) investment that goes with this, or should.
A growing number of leaders see growing challenges for innovation within local economies, believing that the increased competition and accelerated pace of technological advancement has a negative impact. So this is a growing set of policy paradoxes, leaders want clearer decisions through local governments to determine this and bring it under control.
The wish to go beyond just product innovation
There is also a growing recognition that incremental innovation is simply just not enough as organizations are suffering from this lack of growth momentum, causing much of the “vertigo”. Business model innovation is becoming more and more the solution with a growing view that a new business model may offer businesses a less risky and resource-intense path to reach customers over the current ‘traditional’ methods.
I read an awful lot into this but top of mind does come the word ‘naivety’ and a chose this word due to its definition: “being naive is often lacking developed powers of reasoning and criticism.” They might look far more at the “within” and come down from their often lofty heights and recognize they are the ones that inhibit and constrain the existing structures to perform in so many ways, far too many to start to outline here.
I welcome new business models of course, I teach the methodologies associated with them, so they are needed but are these organizations equipped to design, construct and execute new business models? Also what happens to all the resource-intense ones, do they continue, only to wither and die as new ones are pushed by their own leaders? No, this might be fanciful but it needs a far more robust debate and thinking through. Of course focusing on the right forces for growth mentioned to master innovation is the real need for innovating successfully, business needs to master customer and market insights, talent and technology development.
Grasping new business models alone does not change that inherent weakness seen today in existing organizations. Theory and desire might be one thing, reality and sunken investment might be another – maybe more vertigo then?
Collaborations continue to feature
According to the report, it is the belief that collaboration between businesses is emerging as a means to surpass competitors, enabling faster access to new technologies and markets particularly in emerging markets. Yet despite global acknowledgement of partnership’s power, concerns over revenue sharing, IP protection, trust and talent poaching pose barriers to action. Germany, China, Brazil and Sweden seem to have the most experience at partnerships.
It does seem collaborative innovation has plenty of global appeal as a key to business success, and momentum are accelerating in developing markets and seemingly slowing down in developed ones. The reasons for collaborations are given as access to new technologies, access to new markets; improve existing product and service and speed up time to market. The downsides are a lack of trust and policy protection underpins much of the anxiety over business collaboration and the continuing “old chestnut” of IP protection, which all fit with developing country lag issues on legislation protection.
Government as stewards of the innovation environment
This one also gets me intrigued – stewards – umm. We are in such a “fog” from lack of dynamic leadership at government level, partly due to the complexity and tangled knots we have got ourselves into but also the underwhelming mandate delivered at the ballot box leaves the politics of politics in stalemate. I always get the sneaky feeling business leaders keep pushing government to lead and make policy and then scream and shout, another vertigo moment, if they don’t like the decisions that go with this.
Of course policy environments affecting innovation are caught up in this and the usual call to safeguard business interests adds to the tensions. Business worries over the lack of talent, of loss of knowledge, in IP issues and fear bureaucracy (besides their own) and over regulation (beside their own again) but often we can’t see our business leaders heading the charge to hang onto talent already in place, reduce the knowledge we all have by insisting on many brain-numbing daily activities, called specialisation and filling in information called for by the “system” etc.
Our business leaders want to see “a stronger entrepreneurial culture in the education system through stronger linkages between students and business savvy individuals” but sitting on their hands and wallets until this comes through any changed education system does not solve our immediate and next ten years of problems – does it? I suspect more vertigo moments for them.
Lastly, guess what, talent is not in the right place
Leaders want to have access to the creativity and technical prowess within their workforce but the lack of preparedness and access to this ‘talent’ is holding them back in “unlocking innovation”. I find it hard here to not become a little cynical on this. Matching jobs and people is hard, no doubt and lining up the right skills to meet the economic needs required today is correct but if all the millions of messages of caution in the past about investing in people, in nurturing what you have, holding onto what you have in experienced people, instead of simply letting them go, many on early retirement packages or just leaving out of continued frustration, I do have a hard time on their concerns. They made the bed……..
Perhaps another symptom of “Innovation Vertigo” is “Innovation knee-jerking”, turning it off and on for the short-term needs and abandoning the notion of continuous, sustained investment in the skills, along with developing the experience base through challenging environments and leading edge investments. Well at least if new business models come into serious ‘play’ then the skills, experience base and challenging environments will all equally be in ‘play’ but not in the controlled ways they would want to see but at the edges of much discomfort for some white knuckle rides.
Thanks GE for providing this, it is certainly helpful to see inside leaders minds.
I enjoy the GE Global Innovation Barometers they often do raise the blood pressure and that of course is a certain tell, tell sign that I might be suffering “Innovation Vertigo” as well. Can I go to Davos as well, please? I do live in the country but more at solid ground(ed) level, I’d like to be a little light-headed above the clouds.
The report is at http://www.ge.com/sites/default/files/Innovation_Overview.pdf
or with different views here: http://www.ideaslaboratory.com/projects/innovation-barometer-2013/
Jim turned from staring through his microscope, rubbing his eyes, and looked out the window. It was dark and the snow was really coming down. The lamppost had turned that funny yellow colour, as more and more snow was falling in the car park and building those little domes of snow on top of everything. It was the Friday before Christmas, the last day in the office for three days.
Jim was looking forward to getting home tonight, so he could share some time with the family after having been on a frantic trip to four different cities, on three continents, in seven days, to meet with his different team members. This was quickly put together to coordinate the project they were all working upon, comparing notes, setting some goals for the coming weeks.
He was tired but also troubled, apart from all those delays at airports, different hotels and long days and growing jet lag this was not the main reason for his headache. He had been working on finding a solution for a molecule that would make a significant contribution to his company’s product pipeline, and they certainly needed this ‘breakthrough’ as 2012 will be a ‘watershed’ year in his industry.
Jim, like many others in research and across his company were worried, really worried. According to what he reads billions of dollars and many of the larger blockbuster were falling over the “patent cliff” as it has been dubbed and he was wonders what they means for him. He has heard rumours, swirling around, a little like the snow outside, that yet another re-organization is in the works. More uncertainly to face and it will do his case no good if he can’t crack this particular problem, the reason he went ‘racing’ around the world to visit the other research centres in Rio, Brazil, Shanghai in China, Jurong in Singapore and Basel in Switzerland.
Stars in the Universe always twinkle.
Jin loves his work, he tells many of his friends willing to listen to his same old story: “molecules are so small that there are more molecules in your body than there are stars in the universe!” His kids love that one as he then grabs them and tickles them so they ‘squeal’ with delight. Also he never tires to tell anyone who cares to listen or ask what he does. Those that knows Jim always expect him to make this comment or a similar one when the extended family gathers around the Christmas table, to keep everyone aware of his contribution on this world. He often gets ‘ribbed’ on the number of molecules he seems to be adding himself and Jim shakes his head, dismissing them all as “ignorant peasants” or something more specific and then laughs out loud along with everyone else.
What’s so special in Jim’s mind about molecules is always their unique shape that allows it to interact with other molecules. The interactions between molecules made up of black carbon atoms, white hydrogen, red oxygen and nitrogen atoms are always buzzing around in his head when he peers into that microscope. Jim enjoys his work, even he would happily stand up and state he is proud of his contribution but at this moment of time he certainly needs to find this solution to his current vexing problem, as the deadline set to solve this has been ‘laid down’ from on high and that always has some darker sides to any ‘edict’ like that. Hence this was partly why he went on this last minute dash around the team, to find a solution to their problem.
The darker side of acceleration taps on his shoulder
The bigger problem is, it is simply getting tougher, is the constant message he is getting down from the top within his company, not only to come up with new drugs, as he well knows, but also to convince insurers and the government to pay for them — unless they make meaningfulimprovements in health, at a reasonablecost. Everyone has to lift up their game, accelerate the work and offset some of those worrying times ahead if possible, well at least try to make a contribution that is acknowledged and hopefully appreciated by others.
Santa comes early
Suddenly he hears that familiar sound of an incoming email, he turns around to take a look as it gives him a chance for some distraction. Normally he would not be feeling this about any last minute emails before he heads off home for the Christmas break.
The email was from Lo Ping, in the research centre in Shanghai. Quickly reading it he suddenly brightens up. Lo has found a possible breakthrough to the problem. It seems after Jim’s visit and explanation, Lo Ping decided to reach out to their collaborators around the Asian region and pose the question to them. One of the research institutes in Thailand they work with, thinks they might have an answer, something they were working on for another company but in another unrelated industry, so they can find a way to explore this in some form of open innovation collaboration. Jim knew Lo Ping would not bother him unless she was fairly sure this would likely be the answer he and his team have been working hard to solve. Open innovation has been a great help for him to bring other ‘like minded’ people into the discovery process.
A world that never sleeps, even at Christmas
Lo Ping with her usual humour writes “here’s the deal Jim, knowing you will be sitting with your feet up over the next few days while some of the rest of us work, I will fly to Thailand, investigate, work on the testing to see if this does make the breakthroughs and then do some more work in my labs before you get back in three days- how about that?” Jim smiled, knowing Lo Ping and her team they will deliver as promised. The Shanghai lab is a twenty four times seven one, meaning it is working 24 hours a day, every day. Comparing that with the one here that Jim works in, in the US it only works, at a pinch, 9 to 10 hours, five days a week and that often causes at head office many comments on productivity, cost efficiencies etc, etc. These constant global comparisons just add more pressure.
He quickly emails back to Lo Ping- “sure, go for it and thanks, I owe you one”. Within seconds a further email comes back from Lo Ping suggesting: “well just remember Chinese New Year is on 23rd & 24th January this year and if you could shift that review meeting to a little later as a return favour, it will allow me to release some of my team to have time with their families- agreed?” Jim laughs, he knows Lo Ping and her way of conveying the needs of her team, also means her. He emails back “sure, providing you have those results on my desk in three days”. Only a ‘smiley’ is the reply.
Let the collaborative process work- “let it flow, let it flow, let it flow”
Wow, that is a great relief thinks Jim, if we can find the breakthrough, make a collaborative deal with the Thai lab to share in the benefits we might quickly get back on track. Some quick emails off to the team, then to legal in Singapore to be on the alert to join in the negotiations, a copy to the central open innovation legal person in New York so that it will get the legal wheels grinding along as well. He thinks he needs to pull in that favour following his buying of the meal in Singapore last week for the team, including the lawyer. Sometimes those face to face, social meetings pay incredible dividends and he knows Satvinder Sirajay is very dependable and wants to help especially after they found out over dinner they had daughters playing football for their schools. Knowing each other in this connected world does help.
Reminders and recognition
He recalls listening to Don Tapscott a few weeks ago, talking of the Age of Network Intelligence where the five principles now apply. These are ‘collaboration, transparency, sharing, interdependency and integrity’ and Jim just felt he had ‘touched’ each of these within this set of events. So these guru’s do know what they are talking about after all, he thinks.
That suddenly prompts him to remember to pick up those two books he had ordered from Amazon to read over this Christmas break. One he needed to read to prepare for his innovation session to his research colleagues straight after Christmas- “Best Practices Are Stupid- 40 ways to out-innovate the competition” by Steve Shapiro and the other to help him find ways around one or two rather stubborn middle managers that seem to be blocking his initiatives from ‘seeing the light of day’ at the senior level. Yes he even liked the title on that one “Relentless Innovation- what works, what doesn’t” by Jeffrey Phillips.
He certainly was thinking to himself where he works, it is “relentless innovation” with the worldwide research centres working 365 days of the year. As he closed up on his working day he came up with his title for his next (fantasy) book “restless innovators.”
Back to earth and chores for the evening
Suddenly the blackberry beeped, a SMS from his wife gently reminding him to “not forget to pass by the local butcher for the turkey and pick up the Christmas tree next door, the one she had already ‘marked out’ and paid for and don’t forget you promised to decorate it with the kids.”
His smile suddenly changes though as he hits that cold blast of air, quickly pulling up his coat collar to stop the snow from trickling down his neck but it didn’t matter he was happy. Happy to share Christmas with his family, happy his problem seemingly was about to be solved somewhere else in the world while he took some time off and happy about that decision to go around the different research centres to lay out the problems. He felt this gave them all a personal identification and shared understanding of what was needed from them as a global research team, working on innovating the next breakthrough for their company.
A little cold shudder but that was for another day
The only shudder he felt was the need to face up to the merger issues that were announced. Still that was for after Christmas when he arrives back to hopefully find the team working away in Asia has found the solution and that positive message he could then gives the ‘powers that be’ the good news. Hopefully it will remind them of the many reasons why they were such a powerful collaborative team, essential to the future of sustaining their position in the market.
Crazy, connected but collaborative
“Yep”, thought Jim- this is certainly a crazy, connected world but today it was simply a great collaborative feeling one gets on working on solving a problem. One, that in his mind, would lead to a potential innovating product that will save lives. Not bad as a great feeling as Jim heads home to the family and celebrating Christmas and all of what it means in our lives.
Enjoy your Christmas and happy innovating in 2012! Stay optimistic.