Over the past few weeks, or is it months or is it even years, I have been constantly thinking through how we are learning in our innovation understanding. I have been struggling over this for a long time, looking to create a more compelling narrative and have only realized part of my ongoing difficulties was that I was coming at this the wrong way.
Firstly a narrative should be open-ended, there is no finite resolution yet to innovation understanding and secondly, it is for the intended audience to determine and relate, not the person presenting the narrative. For me, one light bulb went on.
Following on from my last post of “Place your future bets- invest in Innovation Capital” which outlined the significant contribution innovation capital plays in our economic growth, let me offer some further thoughts on its value to really capture and understand, so we can measure it within our organizations.
We have the three components; of physical capital, knowledge capital and human capital that are the innovation-related assets, these make-up Innovation Capital.
I have been arguing that innovation capital draws from the core of intellectual capital and its suggested (and broadly recognized) components of human, structural and relational capitals or social capital. I have previously discussed this converging up, as the ‘nesting effect’
Innovation capital needs assessing and measuring so we can understand the relationship between this innovation capitals (and its present and future potential) and organization performance. We need to know the innovation capital ‘stock’.
Why, well ‘stock’ can be ‘static’ and we need to make this more ‘dynamic’ so innovation can ‘flow’ from this constant renewing of our capitals and be transformed into new value.
Recognizing the value of our innovation-related assets is where the ‘smart money’ should go. To gain growth and to improve productivity is through innovation. We need to translate knowledge into new values.
When you pause and consider the make-up of Innovation Capital you realize it makes such an economic contribution and in a report from McKinsey & Co, they have set about identifying this to produce the above summary, covering 16 countries, to understand the real value of this Innovation Capital.
These numbers are big and still don’t fully capture everything associated with innovation as much remains ‘hidden’ or ‘attached’ to other activities as well.
We need to shift our thinking on what makes up Innovation Capital
Two years can feel like a long time. Exactly two years ago I wrote a post called “Making the appropriate impact” discussing my nine different impact points for innovation.
I wrote at the time we can have surprisingly strong influence on impact, as we are in a highly connected world. It is through our organizing and influencing abilities we can all partly determine our innovation future.
I suggested we have nine impact points to consider:
The challenges we are facing today seem to be coming faster at us, more complex to decipher and then re-evaluate how we should respond. To achieve faster response we certainly need to educate the organization more than ever.
We need to absorb more, we need to encourage learning more especially to pursue innovation. We need to actively set up learning ways within our organizations to establish their abilities to recognize the value of new, external information (knowledge), to assimilate it, and apply it to commercial ends.
Innovation within the organization needs not just greater recognition of its vital parts, but also of its status as a value enhancing and organizational life-changing event that we need to move towards increasingly in more organized ways. Innovation needs to be recognized as a clear discipline, a new expertise that is as powerful as Marketing became some decades ago. Continue reading →
We have all got used to the statement it is all about “location, location, location” for real-estate. So what should the mantra be for innovation? I think “context, context and context”. Context is a king.
Innovation happens all around us, same as with our places where we live- it is determined by many factors but given a choice we want to live somewhere nice, safe and hopefully going up in value! The same with innovation we want it to be good, attractive, useful and valued by many, hopefully willing to part with their money because it fulfils their need.
Innovation should always start of by being placed in its appropriate context otherwise it will lose its initial connection, dilute in the eventual value and arrive as less desirable because we somehow and somewhere went off track We lost the context because we never really established the real ‘sense of purpose’ for that specific innovation or given direction to explore.
Why do I believe context is the king when it comes to innovation?