sustaining competitive advantage

The Cascading Innovation Effect.

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Visual source; http://www.adaptivecircularcities.com/

We need to think about a choice-cascade integrative model for innovation. Often we fail to understand our role in contributing to innovation; we need a cascading effect. Here I want to explain my thinking behind this and provide the visual cascading steps I feel help us succeed in innovation.

For me, the “cascading effect” for innovation is “a sequence of events in which each produces the circumstances necessary for the initiation of the next”.

It presents an idea, a concept, a prototype, a piece of knowledge that provides the catalyst to be exploited in a broader community as the next step and so on. It cascades. It is where we fit understanding and fresh knowledge within the innovation web.

Getting innovation through any process of understanding is hard. Knowing what is required to generate innovation throughout an entire organization is even more so.

We need to deploy the cascading effect on innovation to support this supporting “effect.”

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Our innovation era: creative destruction or destructive creation- which?

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I keep coming back to the dilemma often faced in innovation- do we practice “creative destruction” or “destructive creation?

We are entering some perilous times in climate change and what this will mean in destruction in what we know, what we value and what we are used to.

I can’t imagine when Joseph Schumpeter outlined his groundbreaking efforts for explaining “creative destruction” he or anyone else could imagine this being flipped around to what we are facing more of today, that of “destructive creation”. We live in a throwaway society, and simply this is not sustainable.

Schumpeter saw “creative destruction” as the renewing, through innovation, society’s dynamics that would lead to higher economic development and welfare levels. At the same time, recognizing that this destroyed a few of the incumbents to benefit many more newcomers and increase value creation for broader society.

Today we are in a destructive creations world.

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Sustainability is central to innovation’s future progress

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Sustainability is central to innovation’s future progress

Building a sustainable competitive advantage

Today’s challenge for me is not only to be building the innovation capacity but also to be establishing clear ways on how we should set about sustaining it. Increasingly, organizations must have the capability and capacity to sustain innovation to provide the stimulus for lasting growth and resolve the complex challenges we face today and in the future.

To get there, though, it does seem this must be through continued learning. Hence, your capabilities become stronger, evolving and more unique, thus making them more difficult for competitors to understand and imitate.

Let me outline an innovation framework that builds capability through a sustained approach.

When you set out to build capability to be sustaining, you need to consider there are two types of capabilities, distinctive, which are the characteristics of the organization which others cannot replicate and reproductive, which can be bought in by the competition but always need to need to be appropriate to any objectives you are trying to achieve.

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Building an innovation framework that has real capabilities as its formula as its heart.

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SCA FormulaI’ve strongly believed when you begin to think through a framework for innovation, see my last article as an example, you also should equally need to recognize the capability framework that you will need to build into this.

Working through these as essential combinations can become the real enabler.

Here is my solution that I think is worth working through, to firstly absorb and then consider for applying to your own innovation building activity. Try it!

I have worked on a formula SCA = II + OC + EE + MLC + RNE for this. I have never published the make-up of this in the public domain before, although I had briefly outlined it in a past post here.

In that post I outlined my thinking and I do not think it needs repeating, does it? So onward…….

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Figuring out a different strategic alignment with innovation being central.

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Strategy as we have previously known it is officially dead. Strategy is stuck! Competitive advantages have become transient. We are facing situations where advantages are copied quickly, technology is just one constant change, and our customers seek other alternatives and things move on faster and faster.

In a new book written by Rita Gunther McGrath, a professor at Columbia Business School in New York and one of the world’s leading experts on strategy, she has been exploring the changes rapidly taking place called  “ The End of Competitive Advantage: How to Keep Your Strategy Moving as Fast as Your Business”

 “Strategy (in the past) was all about finding a favourable position in a well-defined industry and then exploiting a long-term competitive advantage. Innovation was about creating new businesses and was seen as something separate from the business’s core set of activities.” “Sustainable competitive is not just ineffective, it’s actually counterproductive” says Professor McGrath.

She rightly states:“Think about it: the presumption of stability creates all the wrong reflexes. It allows for inertia and power to build up along the lines of an existing business model. It allows people to fall into routines and habits of mind. It creates the conditions for turf wars and organizational rigidity. It inhibits innovation.

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Linking innovation context to the process

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Time passes extremely quickly, particularly when you enjoy yourself, or so it seems for me.

I was surprised, going through some of my past blogs, that the time between related entries on the need for having in place a sustainable competitive advantage framework on innovation has been longer than they it should have been.

This blog is the third entry on this subject.

Always, always and always do I see organizations struggle to align themselves for their innovation activity, why is this? Either alignment of innovation into the strategy they are (assumedly) following or shaping innovation into the context of where and how innovation can fit.

I’ve written on this often enough actually, and argued the need for building a more sustaining innovation framework.  I have been working for some time within one of my formulas on this with its given framework of II + EE + MLC + OC + RNE build towards = SCA. I somehow suspect you need nudging on what this means.

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Sustaining is Pivotal to Making Innovation Progress

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The greater challenge today with innovation is to build a more sustainable framework for innovation to be consistent, like a beating heart, day in and day out and pivotal to that is having a strong innovating driving framework.

The struggle is what constitutes the right areas to frame and build innovation capability upon? I argued last year in one of my previous blogs there was a formula. If you go to “A Formula for Sustaining Competitive Advantage through Innovation” at   http://bit.ly/95kCI1 it introduces this.

Now we need to align this further.

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Sustaining Competitive Advantage through Innovation

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Sustainability is central to innovation’s future progress

Today’s challenge for me is not only to be building the innovation capacity but also to be establishing clear ways on how we should set about sustaining it.

Increasingly it is necessary for organizations to have the capability and capacity to sustain Innovation so it can provide the stimulus for lasting growth. To get there though, it does seem this must be through continued learning so your capabilities become stronger, evolving and more unique, thus making them more difficult for competitors to understand and imitate.

Let me outline an innovation framework that builds capability through a sustained approach.

When you set out to build capability to be sustaining you need to consider there are two types of capabilities, distinctive, which are the characteristics of the organization which cannot be replicated by others and reproductive, which can be bought in by the competition but always need to need to be appropriate to any objectives you are trying to achieve.

Read more