Our longer term winner is clearly open digital innovation

Open digital innovationIn my last post I was discussing the effect digital would be having on our innovation activities, be these presently opened or closed. The impact of digital innovation changes the innovation paradigm significantly.

Organizations can stay digitally closed in their innovation activities, moving beyond simply developing innovation solutions themselves into a connected (closed) network, where the platform becomes the enabling force and those that join share common ground or purpose but are pursuing separate value propositions that required this ‘extended’ collaboration to achieve this position.

These ‘closed systems’ can give a level of competitive advantage but these are increasingly transitory depending on the complexity and uniqueness of the eventual value proposition. Collaborative platforms are clearly the way to go to open-up innovation that allows more radical and complex solutions to be provided.

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Are you going all digital on me?

Going all digital on meWell then, are you going all digital on me from your innovation activities?

So there we all were, getting really very comfortable in our open innovation activities, learning to collaborate and co-create outside our organizations. Even our management has got “open innovation”.

We are encouraged and allowed to collaborate outside our four walls of the organization as the penny has finally dropped that “not all knowledge resides within the company”.

We had worked through some of the cultural stuff, shifted around the team who like to collaborate, pushing others less collaborative to the back; the conflict points, we had established the process, practice and tools.

We even have our legal teams on board helping sort out all the conflicting positions that open innovation can mean when it comes to dividing up the IP spoils and even had our leadership tuned in, singing our praises and even (heavens forbid) getting engaged in the process.

When the world shifts, we all need too.

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Where are the new feeding grounds of innovation?

Credit Wildebeest migration, Kenya, by Bonnie Cheung

Wildebeest migration, Kenya by Bonnie Cheung

I am presently reading an early release draft of a book written by Mike Docherty of Venture2, on innovation, and I would certainly recommend the read when it comes out. The book Collective Disruption will be available as of February 2015.

The book as Mike wrote to me, is aimed at corporate leaders, both in large and small companies, charged with new sources of transformative growth and makes the case for co-creating new businesses with entrepreneurial partners. It builds on a foundation of open innovation, but is focused specifically on new business creation (vs core business support).

I know that Mike is passionate about the intersection of corporate innovation and entrepreneurship for co-creating new businesses and business models. As CEO of Venture2, a consulting and new ventures firm, he works with leading brand companies and start-ups to commercialize breakthrough new products and businesses.

Mike has experienced disruption many times.

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Achieving a higher collaborative gear

Collaborative GearsFor a big majority of us, open innovation is now well established, it is part of our innovation furniture. The quest for many, today, is the search for richer engagements, possibilities and exchanges. We need to move beyond the existing boundaries and go deeper into the collaborative space.

I regard collaboration as the active ingredient, the yeast that allows our ‘daily innovation bread’ to rise. Getting all the parties ‘gathered around’ puts increased vitality, energy and commitment into working together over a project or idea.

As we learn to reach out and collaborate, exchanging perspectives and our different thoughts, it is in these interactions, in the many exchanges on-line and off-line that we move towards a real sense of achievement.

Allowing outside ideas through our doors

Open innovation has literally thrown open the doors, many of our research and development activities are increasingly relying on the input from outside. Open innovation is changing our behaviours.

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Exploring the criteria for collaborative innovation

Collaboration discussionsThe shape of our collaboration activities has been radically changing in recent years. The combination of technology, the internet, resource constraints and opening up of innovation to the outside world has changed the shape and content of conversations.

Shaping conversations can be either intentional or through serendipity. Ideas are usually never fully formed but emerge over these conversations, from fragments that need nurturing, encouraging, aligning and developing through ongoing conversations. Often the fragments need a wider network to come together and form around.

sharpen-ideas-quicklyThe push today is the ability to sharpen the ideas quickly and move into some early testing and validation, ideally with the final customer somehow engaged and then from this ‘interaction’ the idea shapes and its final understanding deepens onto a concrete delivery. There is a growing need for more radical, out of the existing box innovation to tap into. Collaborators help here.

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A call for a more open collaborative innovation consulting framework

We are coming up to nearly 10 years since Dr Henry Chesbrough wrote his first book on open innovation as the necessary business imperative.  There has certainly been considerable progress in many business organizations to embrace this open collaborative principle.

“Open innovation is a paradigm that assumes that firms can and should use external ideas as well as their own internal ideas, and explore both internal and external paths to market. Firms need to look to advance their technology, resources, their knowledge and understanding through innovating with partners by sharing risk and sharing reward”.

Isn’t it strange that the very consultants expounding ‘open’ for innovation are as closed as ever? Why is this?

I would argue that the consulting industry specializing in providing innovation services is its own worst enemy today, by not being more open themselves. It is actually failing to recognize that this is inhibiting their own long-term prospects. Nearly all within the innovation consulting industry seem to be resolutely staying very internally driven, self- promoting, still trying to convey the story of their mastery, when clearly this is so painfully lacking from the results in growth by many of their clients from their existing innovation activities.

Due to this lack of openness they are failing their clients by not offering them leading and emerging practice advice. Yet the client is increasingly requiring more complete or holistic solutions, not from a ‘piecemeal of innovation offerings’ they are presently receiving. These separate pieces currently being offered by one group of consultants often don’t dovetail into a complete innovation system because they are supplemented by a variety of different service providers, all having their own ‘pet’ approaches, methodologies, techniques and tools.

Why is it when many clients who are actively working on increasingly open complex innovation challenges and working through a more diverse range of collaborative platform solutions, that the innovation consultants working alongside them, are still such a different story of being closed up? Consultants seem so reluctant to open themselves up and embrace this more open collaborative culture and gain from embracing that essential more divergent thinking that innovation often calls for by the use of external collaboration.

Innovation consulting is a fragmented consulting industry unable to achieve scale to match client needs.

Today innovation management advisory firms are mostly small, loosely organized, some highly specialised, that have a flourishing complexity of activity but often spend inordinate time reinventing many aspects of innovation management that are not necessary and serve little value for the client.

While client’s requirements for structuring innovation are often claimed as unique and distinctive, they are in many cases, actually not. What they really want is to acquire is a common, repeatable, scalable innovation structure that allows them to manage their distinct innovations on a consistent basis. The understanding of the innovation process is basically common or should be. Until this point of difference between what a client’s wants is a common, scalable process and yet the providers want to offer, their own versions, innovation in general will face many disadvantages in not advancing, as it is not formed around a basic set of common standards.

Consultants are ignoring the richer places of competitive advantage or doing a poorer job of exploring variability, diversity and within the organizations building capability as it is people who offer the real value within innovation. Managing the intangibles is certainly far harder and messy but it is the ‘sweet spot’ of innovation, where the multiplying of the degrees of connectivity, interactivity and sharing, offers the new innovation equation point.

Consultants are far too cautious for their own good

Consulting firms on the other hand are moving far too cautiously to any form of collaborative engagement; it is far too ad hoc. Wherever possible consultants want to manage as much as possible internally to ‘keep’ the fees generated inside. This is not a recipe for building lasting relationships that have mutual value in growing understanding. They stay’ in-breed’ and are not reflecting the commonly held view today, “that all knowledge does not reside within your own walls”; they still reluctantly hang on to the closed system of  ‘invented only inside here’.

How do we resolve this? Should we? Are Disruptive Forces Around?

Combining all these islands of innovation knowledge into some form of combined force would be a healthy step. Innovation is consistently ranked among the top three strategic imperatives by business leaders yet it is not recognized by consultants with the same strategic commitment.

Of course there are some big challenges facing innovation consultants today:

  1. How do you break out and resolve this fragmenting industry of many niche consulting players certainly not matching the clients’ ideal profile of global span and support?
  2. The inability to offer broad innovation experience or depth in capabilities is another negative working against many consulting firms.
  3. Forward thinking innovation centres within consulting are rare so there is little fresh ‘knowledge stock’ being added to tackle increasing complex issues around innovation.
  4. Sophistication & specialization is highly sought after but expensive to keep around. And having this expertise sitting on the bench within one consulting company as it is regarded more as a cost liability and not as a valuable asset to leverage.
  5. Strategic understanding in fast changing, complex markets and organizations is extremely hard for outsiders (consultants) to grasp in the detail required to be able to contribute into clients with the impact often justified by the fees demanded.
  6. Limited experiments are currently being undertaken in the innovation consulting practices, yet clients are actually crying out for this, it is a massive unmet need or job-to-be-done.
  7. Lastly consultant partners should change their remuneration models that drive their consulting business to actively seek more ‘win-win’ solutions in collaborative partnerships.

A bolder, more open collaborative model is required.

  1. Consultant companies should become the host and potential ‘orchestrator’ of platforms for the ‘best’ to gather and collaborate and offer this to clients as a real value benefit.
  2. Clients are learning how to collaborate and to openly network.  So shouldn’t consultants embrace this and seek out the places of complimentary knowledge by recognizing they can only, as they stand today, make a limited contribution and cannot claim ‘total solution expertise’ without active collaborations themselves.
  3. There are growing sources of advice alternative– clients are recognizing this and seeking it out so why not the consultant through being the platform provider for this ‘clearing house’ in diversity, thinking and understanding.
  4. The appeal of bringing together experts that can come together and work on specific complex problems and then disperse has great value for all concerned providing it has a retaining clause and gives all involved their own specific returns on their business model.
  5. The need today is to have real access to great quality thinking and this does not reside within the walls of one consulting firm. However large a practice of consultants they are repeating the same solution set, mindlessly pulling down their ‘best’ practice from their internal knowledge and then, attempting to apply this to someone else’s unique circumstances, failing to evaluate this sufficiently and eventually failing the client.
  6. Consulting practices need to address rework. Much of the profit comes in reworking what has previously been delivered, selling it time and again. This would need changing but is not so radical a change as first thought. It is extracting the repeatable parts intelligently, evaluating the points of difference in a more forensic way from ‘available’ expertise.

A revolution for innovation consulting comes from opening up.

The resolution or (salvation) of innovation consulting is to build transparent networks of expertise, brought together on platforms provided by the nominated host or consultant, so clients see and value the access to broader, best available expertise that is working through their own, often unique challenges, not being felt as ‘cookie cutting’ recipients.

Complexity, uniqueness and expertise need to be addressed in more customized ways and that challenges the existing global consulting model of maximizing repeatability. Applying the best in knowledge application for innovation consulting services offers the client a real value for accelerating growth and job creation based on more radical and breakthrough thinking.

So what I propose requires us to think through a new model that can combine the best available expertise on a given client platform, hosted and orchestrated by the innovation consulting firm, pulling together the best advisory and thought leadership around to solve unique client challenges. We need to alter our ways to achieve this.

What will it take to shift the existing practices? Possibly clients demands better support or simply keep voting with their feet by investing in their own experimental learning themselves, as they don’t feel the consulting advice available gives them much they don’t or can’t find out themselves.

The alternative is someone sensing the opportunity to disrupt the existing consulting model and bold enough to make that fist mover advantage and take innovation consulting up a level or two of engagement. Actively working on finding ways in their value offer, so as to position themselves with clients as a critical ‘must have’ for working alongside them on their current and future problems in richer collaborative ways. They share the joint objective of achieving a higher level of innovation growth and return that the client can’t achieve in their current approaches to innovation management.

Are we reflecting enough on the choice of the drivers of innovation?

There are many different places to go and ‘look’ for innovation but often we need to think through a little more of what is driving the changes before we ‘run off’ into finding solutions that are simply immediate to grow our organizations. Sometimes they are, of course in ‘plain sight’, but when you alter your thinking lens you might see innovation opportunities in different ways.

We might miss sizable opportunities in not exploring all the different drivers that are around to drive innovation and provide us opportunities. So why not take the time to ‘reflect’ a little bit more on all the different potential drivers of innovation available to you?

So what can and does drive innovation?

I’ve been recently looking at the different drivers that can be explored for innovation. They seem to be many and it can be confusing. I feel there are eight that merit thinking through in a more structured way. Working through these can significantly improve the agility and options of the organization to generate new opportunities and give you a ‘rich’ potential to explore.

My identified eight drivers of innovation

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