Opening up the Stage Gates to let the new innovating world in?

Stage Gate hurdlesThere is no question the Stage-Gate process has had a significant impact on the conception, development and launch of new products. Yet there have been consistent criticisms of it, as the world of innovation has moved on. Today it is faster-paced, far more competitive and global and become less predictable.

The cries of the Stage-Gate process as being too linear, too rigid and far too planned, bordering on prescriptive have often been heard. The gates are too structured and the constant ‘creep’ of the controlling bureaucracy surrounding it in paperwork, checklists and justification has simply led to so much non-value-added work add to the moans and groans.

Surprisingly, the Stage-Gate concept was created in the 1980’s and led to Robert G Cooper’s different evolutions of this evolving and absorbing many new practices and experiences gained by different organizations across this time.

I’ve written previously on this blog site about the concerns within this Stage Gate system if organizations allow the ‘controllers’ to dominate over the ‘creators’ of innovation what can happen. We end up with “self-inflicted wounds caused by jumping hurdles and closing gates on innovation”.

The idea-to-launch gating system is under more threat today than ever before.

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Navigating the future landscape by developing adaptive innovation skills

So where are we focusing upon to make sure we are developing the right proficiencies and abilities we will need to manage our innovations of the future?  For me innovation capabilities and competencies needs to be far more adaptive and aligned to the different emerging skills we should be bringing to bear, so we are able to find better innovating solutions for our collective futures.

The issue is this: if we do want to reshape much of what we are struggling with today – poor growth, diminishing futures, disconnected communities, stagnating economies or ones struggling to emerge from devastated and austerity measures inflicted upon them – we do need to change our skill sets to reflect a more realistic and up to date need to navigate and transform knowledge to tackle these. Often our present skills are not equipped to manage in these more “disruptive” environments.

I wrote in a past post about “Learning to absorb new Knowledge for Innovation and the ability to understand Absorptive Capacity and how it works. Recently I followed that up with two recent posts about our pressing need that Jobs can be created but our skills do need very much adapting and refining, from where we are at present. One post was “Innovation Job Chasing- A Race Needed to Win” and the other was its precursor “The Present Innovation Jobless Era We Face.”

Our real need is to put in place those stronger adaptive skills  as our foundations so we can be better equipped to compete in the growing innovation race we all facing at personal, community and national levels. We need to equipped differently to meet the tougher global conditions that will be with us for our lifetimes, irrespective of our present age.

Competition won’t go away; it will only increase in its intensity.  To meet this we need to be far better equipped to be ‘innovation-ready’ in our skills. What forms a better ‘innovation ready’ skill set?

So what are those future skills we should be working towards to group around?

There was a report published in 2011 by the Institute for the Future (IFTF) and sponsored by the University Of Phoenix Research Institute to understand the skills workers will need over the next decade in our changing world, based far more on technology and its continued advance.

The report “Future Work Skills 2020” looks initially at what it feels are the six drivers that are shaping our landscape and then the ten skills they see as emerging that need to be where we place our future focus upon. These are:

Future Skills Set

  • Sense-making: the ability to determine the deeper meaning or significance of what is being expressed
  • Social intelligence: ability to connect to others in a deep and direct way, to sense and stimulate reactions and desired interactions
  • Novel & adaptive thinking: proficiency at thinking and coming up with solutions and responses beyond that which is rote or rule-based
  • Cross -cultural competency: ability to operate in different cultural settings
  • Computational thinking: ability to translate vast amounts of data into abstract concepts and to understand data-based reasoning
  • New-media literacy: ability to critically assess and develop content that uses new media forms, and to leverage these media for persuasive communication
  • Transdisciplinarity : literacy in and ability to understand concepts across multiple disciplines
  • Design mindset:  the ability to represent and develop tasks and work processes for desired outcomes.
  • Cognitive load management: ability to discriminate and filter information for importance, and to understand how to maximize cognitive functioning using a variety of tools and techniques
  • Virtual collaboration: ability to work productively, drive engagement, and demonstrate presence as a member of a virtual team.

A call to action

As the report authors of Anna Davies, Devin Fidler, and Marina Gorbis suggest, the results have clear implications for individuals needing to learn these skills. They will be asking from where will these come? From the educational institutions that need to grapple with changes that are occurring fast. Also it is the actions both  in business and at government level on how they will encourage and develop the strategies and policies fast enough, so as to offer the incentives to drive the changes needed. It is how quickly we move towards any organized ‘grouped’ learning of new skills can we begin to build within these new groupings.

All institutions certainly do need to provide the leadership to embrace the shifts needed in a constantly changing set of lifelong learning. It is recognized increasingly that skill renewal is constant to meet tomorrow’s ever changing global challenges.  A place where skills are far more heavily reliant on technology and we are able to manage these constant changes effectively. So as the knowledge that is emerging gets translated into new values offering new opportunity, learning and growth. We discover, absorb and translate.

Teaching both hard and soft skills that reflect tomorrows needs

The underlying need is to teach skills that promote quickly in response to changing conditions that will include a higher emphasis on critical thinking, depth of insight and the analysis capabilities to ‘translate’ the information or data emerging from multiple sources.

Equally the soft skills, so often ignored as crucial become increasingly relevant. The ability to collaborate and network, to read social cues, not ignore them as not important to me and respond with this much higher level of adaptability. I wrote about “Recognition of better soft skill taxonomy for Innovation some time back that has a useful way of grouping soft skills.

My summary

Predictions can always be difficult but the impression I gained from looking at the suggested ten future skills suggested by IFTF is that they do seem to make for a solid basis for us to gather around.

What of course we need to do is to develop what ‘lies underneath these ten skills ‘to allow us all to become more ‘innovation ready’ in our skills needed to survive. These might give us that better chance to thrive in the future and find fresh innovating opportunities because we are better equipped in relevant skills.

The burning issue is that our window of time to change and incorporate these into our organized learning is shrinking at ever faster rates. We need to move from recognition of these skills into the setting about of building them far more systematically.

We need to build our future innovation capacities on more relevant skills that are based more on what we need to have within our ‘natural’ skill base based on today at least, and not ones still based on 20th century practices.

Innovation Job Chasing – A Race Needed To Win

There are times when we all have to “up our game”. We are entering one of those periods where we have to relearn how to compete, how to win. The world is in the throes of some dramatic changes and the innovation gloves have to come off. Innovation capacity in many countries needs a new, more robust solution.

I wrote about “The present jobless innovation era we face” raising up the theory that Professor Christensen points towards, that we are working on the wrong types of innovation to create jobs. We are measuring our businesses in financial metrics that were more designed for periods of scarce money supply and not what most of our companies have today, cash in abundance, sitting on their books and a world ‘awash’ of cheap money. Professor Christensen calls this theory of his “the Capitalists Dilemma.”

Risk-aversion is dominating our Western thinking

The present situation is that we are in a period of risk-aversion where the innovation ‘bets’ are more incremental, more short-term pushing for greater utilization of existing assets that are designated by Professor Christensen as “sustaining or efficiency” innovations. He believes we need more “empowering innovation” – those that create jobs and invest capital across longer-term horizons than today.

In Professor Christensen’s original article he had published in the New York Times in November 2012 he believe the solutions are complicated and he has looked to “seed the discussion”. Firstly he rightly points out that the “challenge is not framed properly” as he suggests “even if there is robust growth there won’t be (necessary) job creation”. He argues Governments can’t dictate. I believe there is continued risk of even more exit of the migratory capital to lower cost countries and projects where the conditions seem more attractive unless the ‘dynamics’ surrounding the need for innovation plus jobs can change significantly.

We certainly need “innovation + jobs” and not exported!

In my view and to a large view until we focus on all the factors that need to promote innovation plus jobs, our economies in the West will never recover that sustaining ability. A place where capital is deeply invested again, so  it provides growth ‘within our borders’  that can, over time, allow us to return to prosperity.

We need these “sustaining and efficiency innovations” as they liberate capital but it is in providing the right conditions for this capital ,plus all the idle cash today that is simply sitting on businesses books, to be moved towards this “empowering innovation” we need for job creation.

Professor Christensen ‘floats’ three places to start in making changes within our economic  systems to allow innovation activity to break free and become job creators. To change the types of metrics we use, to move these into more people orientated ones. Secondly, to change the capital regimes that shift the thinking on investment incentives, where longer term productive investments held can make that horizon shift due to these tax incentives put into place for investing in longer term, bigger budget innovation. Thirdly is changing the politics where consumption has dominated into different “empowering” decisions. I’ll come back to this another time. My feeling is, as these stand they are little too “apple pie” for me – sweet, initially satisfying but not enough.

Getting your jacket off

Let’s firstly go where the jackets have already come off with a far more substantial set of proposals to “win” this innovation race. Rob Atkinson of the Information Technology and Innovation Foundation (ITIF), a Washington DC-based technology policy think tank along with Stephen Ezell have explored this innovation dilemma in their book “Innovation Economics- the race for global advantage” (released in September 2012) and offer a web site on this whole area www.globalinnovationrace.com

Within the book, the web site and ITIF they outline the arguments for significant innovation change and provide many sensible solutions to win the innovation race. They have put these under the eight “Is” needed and cover each one in a chapter. These are under the following (organizing) headings:

  1. Inspiration. Setting Ambitious Goals
  2. Intention: Make innovation-based competitiveness a National Priority
  3. Insight: Improving understanding of innovation performance
  4. Incentives: Encouraging innovation, production and jobs IN the United States
  5. Investment: More public funding for Innovation and Productivity
  6. Institutional Innovation: Doing new things in new ways
  7. Information Technology Transformation: broaden the IT transformation base
  8. International Framework for Innovation: Everyone plays by the same rules.

Key digital platform technologies are places for real job creation also

They (ITIF) also suggest there are at least six key digital platform technologies today that need significant longer-term capital investment. These are broadband- the critical enabler, next-generation wireless communications that speeds it all up, health IT for easier access to a comprehensive view of patients, intelligent transportation systems for real-time intelligence, a smart electric grid to ‘sense’ location of power, contactless mobile payments to use their cell (or mobile) to pay across society. They quiet rightly suggest without Government help to catalyse deployment of these platforms progress will be slow.

Then we have “Innovation Economics” as a growing doctrine

The book and Wikipedia I would think have the same source but the Wikipedia source does provide a terrific outline of this growing doctrine that is suggested should reformulate conventional economics theory so that knowledge, technology, entrepreneurship and innovation become positioned at the centre of a model, and not independent forces trying to influence it.

This Wikipedia source goes through historical origins, offers the innovation doctrine as a more advanced theory, provides evidence and the geography associated with many successful innovation efforts, that are deliberate concerted efforts by combining markets, institution and policy-makers and use the geographical space. This then finishes up with worldwide examples and countless references.

Competitiveness and Innovative Capacity

In January 2012 a report came out from the U.S Department of Commerce in association with the National Economic Council entitled “U.S. Competitiveness and Innovative Capacity. This report may be a long read of 160 pages but lays out many ways of “Moving Forward” across a well laid out set of the parts that make up the innovation context

These steps suggested include 1) rising to the challenge, 2) the keys to innovation, competitiveness and jobs, 3) Federal support for research and development, 4)Educating our work force, 5) Infrastructure for the 21st Century, 6) Revitalizing Manufacturing, 7) The Private Sector as the Engine of Innovation to offer a fairy comprehensive evaluation of the issues, challenges and investment opportunities to bring about a more “empowering innovation”.

Again within this report in their “Moving Forward” suggestion lies ten recommendations or factors that are suggested as ways for the United States (or even Europe) to regain a pre-eminent capacity within innovation.

It is a race each country engaged in innovation activity will want to win as this building of innovation capacity is the bedrock of economic growth and future prosperity. Otherwise, if we fail to grab this fully, we will face continued decline, short-term disruption and long-term stagnation.

Jobs can be created; our skills need adapting and refining

Of course everyone will continue to need a basic education or knowledge but they will need sharpening the skills and their motivation more. When we lack motivation, we lack that curiosity that becomes so important to innovation. The intrinsic parts of being curious, persistent and willing to take risks needs to be instilled far more into our education and thinking.

The call for education reform is gathering but we need to be careful in the rush to ‘reform’ we don’t “throw the baby out with the bath water” in our haste.

I was reading and storing away for future reference an article “What 100 experts think about the future of learning” that again places learning into its multiple parts: of using technology, sharing education openly and differently, where creativity and innovation fit to foster a new spirit, the internet and new media and its potential impact on teaching and learning, leadership, educational technology , the brain and psychology, technology education, different teaching methods and our institutions. The list does provide a fairly comprehensive view for the impact of learning in the new ways we need to move towards.

Need a job? Invent It.

Thomas L Friedman offered a view in a New York article piece “Need a job? Invent it” suggesting these are dangerous times where high-wage, middle-skilled jobs – those sustaining our past economies – are in the past. These have become only high-wage, high-skilled to recalibrate this middle-class and their dependency.

The article further explores the view of Tony Wagner, a Harvard education specialist, that we need to send out every child as “innovation ready”, ready to add value to whatever they do. Wagner argues “the capacity to innovate – the ability to solve problems creatively, or bring new possibilities to life – needs these skills of critical thinking, communication and collaboration and are far more important to meet today’s challenges than academic knowledge”.

So who is doing this right out there in the world? “Finland is one of the most innovative economies in the world,” Wagner said, “and it is the only country where students leave high school ‘innovation-ready.’  They learn concepts and creativity more than facts, and have a choice of many electives.

Who is putting in place those stronger foundations within this innovation race?

I finish here on the competition and it is everywhere. Not just in a region of one country, or on one continent but across the world. The race is truly on, on who organises the relevant conditions to allow innovation to thrive, to offer the place where “empowering innovation” and where jobs are part of the equation.

There are examples in Europe- not just in Finland, Norway, Sweden but in Switzerland, parts of Germany, regions of Italy, Spain, France, Ireland and the UK. They benefit but equally suffer from centrally driven policies ‘handed down from Brussels at the EU level or constrained in “restrictive” thinking at National level. Many of these “selected” places are simply “pockets of innovation” and lack this cohesiveness and coordination to really accelerate innovation into far more “empowering”to benefit society as a whole.

The BRICS of Brazil, Russia, India, China and South Africa are the emerging group are all developing or newly industrialised countries, distinguished by their large, fast-growing economies. These are the emerging new superpowers where they are experimenting but laying in the necessary building blocks to support and accelerate innovation. They are sucking in the capital and provide the horsepower in people, both those that have gained from a focus in high skilled areas and those with basic education. These combine in that drive to move up the social scale. Ambition is a highly motivating force and those within the BRICS have it. They are searching for advancing their global innovation advantage and know what it means to them personally and collectively.

Coming back to Professor Christensen he suggests the Chinese and Taiwanese in one interview. “Because they measured return on invested capital, every semiconductor company in the U.S. except Intel decided to outsource their microchip production. All that production went to Taiwan. Morris Chang [who pioneered the $28 billion semiconductor foundry industry] now owns half the chip production in the world”. When Professor Christensen asked him why he wanted chips on his balance sheet, he said, “Because I measure profitability in cash, not ratios.” I don’t see why American companies can’t think that way.”

Technology Convergence – What’s your plan?

Lastly in our lightening round-up of emerging innovation power spots, one that we all really need to take seriously, South Korea. This came from Rohit Talwar, CEO of Fast Future under Technology Convergence – What’s your Plan?

I leave it in its entirety, as it states so clearly the organizing power of a country that is determined to win a larger part of the innovation race and is intent to achieve it:

I have just returned from South Korea where I was delivering a keynote speech to a cross-industry forum on how to prepare for and benefit from the opportunities arising from industry convergence. South Korea has made a major strategic commitment starting with government and running through the economy to be a leader in exploiting the potential opportunities arising from the convergence of industries made possible by advances in a range of disciplines.

These include information and communications technology, biological and genetic sciences, energy and environmental sciences, cognitive science, materials science and nanotechnology.  From environmental monitoring, smart cars, and intelligent grids through to adaptive bio-engineered materials and clothing-embedded wearable sensor device that monitor our health on a continuous basis – the potential is vast.

What struck me about the situation in Korea was how the opportunity is being viewed as a central component of the long-term future of Korea’s economy and how this is manifested in practice. Alongside a national plan, a government sponsored association has been established to drive and facilitate cross-industry collaboration to achieve convergence. In addition to various government-led support initiatives, a range of conferences are being created to help every major sector of the economy understand, explore, act on and realise the potential arising out of convergence.

I am fortunate to get the opportunity to visit 20-25 countries a year across all six continents and get to study and see a lot of what is happening to create tomorrow’s economy. Whilst my perspective is by no means complete, I am not aware of any country where such a systematic and rigorous approach is being taken to driving industry convergence.

Those who study Korea know that this approach is nothing new for them – long term research and strategic planning are acknowledged to have played a major role in the evolution of its knowledge economy and rise of Korea and its technology brands on the global stage. Coming from the UK, where it seems that long-term thinking and national policy are now long-lost relatives, I wonder why it is that so few countries are willing to consider – or capable of taking – such a strategic approach.”

To sum up our need for Innovation Job Chasing

Until we see a change that indicate a longer-term view of profitability and start measuring innovation differently we are stuck far more in the present jobless innovation era I outlined in my last article

Yes, we do have a “Capitalist Dilemma” but it runs deep in its fault lines and its many weaknesses nicely highlighted by Professor Christensen but for me, any current dilemma needs deeper evaluation today, not in 12 or 18 months’ time.  We need to look far more boldly at the Innovation Solutions and the economics and knowledge creation within this. In all real honesty, it  is urgent and vital for each countries race for global advantage and future prosperity we become organized and see that “empowering innovation” and job-creation become more central in our thoughts and future decisions.

Can we really overcome the barriers to innovation we have, as each of our developed countries are so mired in old style legacies. We need ones that can still take making profit into the equation but in different ways to ‘release’ capital funding that does bring jobs fair and square back into the innovation solution we actually need, to solve growing societal challenges? Ones that seek collaboration across all sectors of society, who recognize much needs real change.

These need long-term investments and all  the relevant parties working on solutions. At present far too many are playing the waiting game and that has to change. It does seem many are also simply “re-arranging the deck chairs on the Titanic” who will be overtaken by events and not providing real solutions of a current problem.

Graham and Cathryn Quote

The Present Jobless Innovation Era We Face

Over the last few months I have kept going back and forth on Professor Clayton Christensen’s paradox he has named “The Capitalist’s Dilemma.” This ‘hit the world’ when he wrote a piece in the New York Times last November, 2012. I gather this has been one of his best, if not his best read article ever.

As I’m sure you are aware Professor Christensen must be regarded as if not the top, then one of the top experts, on innovation. For me he sits at the top, so when he explores a theory, you stop to think about what he is trying to explain. It takes some of us mere mortal awhile to grasp and relate to these ideas and theories.

Theories into solutions sometimes is a long wait for wrong reasons

Firstly an aside, I need to get this off my chest. Although I suspect a book will eventually emerge, perhaps only next year 2014, far too often this is a little later than preferred or when really needed. The ‘currency’ or present day relevance often suffers from this parallel world of academics, moving on a much slower level. They are still working within the publishing strictures and structures where a book has to be firstly written, reworked, proofed by editors, printed, bounded and distributed.

As you might guess here, I just wish some of these breaking theories that emerge from the academics could be sped up, they are seemingly just caught up in the dogma of rigour, validation and peer review. Weighed down in this legacy they often fail to provide the valuable insights that can alter the present day where the theory or dilemma has arisen. That valuable thinking to address the very problem we need a solution too is today not having even further debate after a book comes out, sometime in the future. We need to begin to travel the road, not just survey it!

Actually it is rather ironic in one of Professor Christensen’s own theories, the disruption theory, that this is one of the real challenges within the publishing industry,  of being “disrupted,” as they fail to deliver in this faster world in the new alternative mediums many are looking for,  that he of all people chooses the old slower avenue of a printed book. Still he chooses to use this medium, such a shame when he expands on the very theories that explain much of what is presently going on today.

The world has sped up and I would urge Professor Christensen to get out of one of the very traps he has previously identified, and explains so well to others, for himself.  I would suggest his insights and suggested solutions are applicable to today’s problems and need exploring now. Can we afford to wait?

So what makes “the Capitalists Dilemma” so relevant today?

The basic concern today in most developed economies is the lack of real growth and the worrying concerns that each capital stimulus round seemingly does not offer that number of new jobs you would expect.  Old ones are being constantly being stripped away at a much faster rate. We are seemingly caught in a broad jobless economic recovery.

At the heart of this dilemma seems to lay the issues of the type of innovation being employed, the way we measure profitability, where this capital is being invested to offer increased returns and the lack of political and leadership will, or understanding, to change this.

Again when you read the article Professor Christensen talks of a doctrine of New Finance, taught over recent years by him and countless others in Academia, of failing to catch up with the new realities and teaching theories we need to operate in a changing world. One of those is the need is to ‘account’ more in creating new jobs and people (gainfully) employed do not seem to be as much within any capital equation. Our new norm is certainly bringing increasing financial returns but without this job creation.

We seem to be faced with focusing on jobless innovation outcomes that are measured by magnifying each dollar invested by the classic ratios of RONA (return on net assets), ROCE (return on capital employed) and I.R.R (internal rate of return), used more when capital was scarce and costly so you husband resources.

Today capital is abundant and cheap – no, really!

Today capital is abundant and cheap, new skills are becoming scarcer, education is lagging the new knowledge economy need and we are applying these old rules of measuring outcomes in the wrong way in our changed world. Professor Christensen argues that successful companies are making the right economic decisions within the wrong situation or economic needed times. Capital is not scarce, it is abundant, yet it seems we are investing in the wrong types of innovation. We still are measuring capital as though it was scarce when it is not.

Companies continue to drive assets off their books, they choose innovations that provide fast returns, they continue to outsource and they consistently keep the time horizons deliberately short for improving the rates of return and constantly higher dividends in focusing on the quick wins.

The politicians have not grasped the need to change the thinking to invest in longer term innovation that makes for more breakthrough and radical innovation activity. Those that employ more people, kick starts new economic activity with fresh investment, new equipping to supply these new activities, and finally also attempt to reposition dividends in their longer-term value for the recipients.

Awash with money

In the Economist there was a recent article “A world of cheap money”  stating: “The message from the rich world’s central banks is clear: the era of ultra-loose monetary policy is here to stay.”

The Economist goes on to state: “Unfortunately, the effect on output has been more muted. America’s GDP is showing signs of accelerating. But Europe’s economies are flat or shrinking. Overall, rich-world growth is likely to be barely over 1% in 2013, little better than in 2012″

“Given the gap between financial froth and feeble growth, are central bankers doing the right thing? Supporters argue that cheap money is essential for economic recovery, particularly when (as in Europe and America) austerity-minded governments are tightening fiscal policy. Critics counter that low rates simply pump up asset bubbles, distort financial markets and risk inflation”

Clearly “monetary policy should not just operate in a vacuum” and it is Professor Christensen’s insight on where innovation is playing it part, or not in most cases, that can hold one of the real keys for rethinking how we measure success. Let me explain if you have not read his thoughts on this.

There are three types of innovation in his view where jobs occur or are lost.

These are summarized by Professor Christensen as:

Empowering innovations: these create jobs, because they require more and more people who can build, distribute, sell and service these products. Empowering investments also use capital — to expand capacity and to finance receivables and inventory. Empowering innovations are essential for growth because they create new consumption.

The second type is “sustaining” innovations: these replace old products with new models. They replace yesterday’s products with today’s products and create few jobs. They keep our economy vibrant — and, in dollars, they account for the most innovation. But they have a neutral effect on economic activity and on capital.

The third type is “efficiency” innovations: these reduce the cost of making and distributing existing products and services. Taken together in an industry, such innovations almost always offset the net number of new jobs, because they streamline processes. But they also preserve many of the remaining jobs — because without those, entire companies and industries would disappear in competition against companies abroad that have innovated more efficiently.

Efficiency innovations also emancipates capital. Without them, much of an economy’s capital is held captive on balance sheets, with no way to redeploy it as fuel for new, empowering innovations until it is released.

His view here is: “as long as empowering innovations create more jobs than efficiency innovations eliminate, and as long as the capital that efficiency innovations liberate is invested back into empowering innovations, we keep recessions at bay” and suggests we are today not doing that.

The innovation machine is out of balance today

Today, our innovation activities are out of balance. I can strongly relate to this on where organizations are spending their innovation dollars: in short-term fixes, incremental thinking and efficiency relating projects, not on deepening innovation capacity.

We are presently encouraging our managers to measure profitability based on a return on net assets, or return on capital employed. That encourages companies to liberate their capital, so they invest in efficiency innovations, which means they can make even more money with fewer resources, so why would they invest in those more-longer term capital-intensive innovation projects under “empowering innovation?”

Professor Christensen offers this thought “what the economy ultimately needs are empowering innovations—like the Model T, the transistor radio. Empowering innovations require long-term investments, which tie up capital for years and years. So companies are using capital to create more capital, and the world is awash in the result, more capital but the innovations we need to advance aren’t there”- this accumulating capital is remaining idle.

Today’s growth sustaining challenges are not framed properly

The need is to “unlock” the right type of innovation that creates a renewed, sustaining wealth for economic and industry revitalisation. There needs to be a shift from investing in efficiency innovation that tend to cut out jobs, where the focus is constantly on focusing on less capital in use and fewer people so that the extra release of capital is re-invested in more efficiency, not in disruptive or empowering innovation. The present day realities within business are how success is measures and if that is on RONA, ROCE and I.R.R then that is where the focus will remain.

Changing the existing paradigms takes time and convergence.

Empowering innovation takes time – anything from six to twenty years depending on many of the necessary long-term wealth creation factors required based on research and vision.

Two factors are well in place. We have capital, almost at zero borrowing rates, that the future net present value of any future stream of growth is identical to one that yields a return in weeks. We have a growing and compelling set of social needs to resolve many grand societal challenges that come more from empowering innovation.

Offsetting this we have a powerful set of factors to change if we see job creation as part of any economic recovery. We first have this current risk-aversion prevailing and we spend public capital on propping up ailing industries but do not pursue the alternatives with a grander vision and plan.

We are holding renovation back in some of these politically motivated decisions yet the young in most countries cannot find any jobs. We prop up banks with their bad loans yet the defaults by small and medium-sized enterprises will continue to rise. In Spain, Italy, Portugal, Greece, Ireland, and many parts of the UK, along with others all have growing at alarming rates, bad debts. So many smaller businesses are close to the ‘tipping point’ of going bust here in Europe.

A bolder innovative framing is necessary

We need bolder re-framing of our challenges, a clear recalibration of our measuring success and a set of cohesive strategies, policies and political judgements. What will eventually bring this to the boil is the unrest, unemployed, stagnating economies, risks of growing debt and loss of property and capital achieved from the past unless those in policy decision don’t ‘face up’ and make bolder, imaginative steps. Our markets need stimulating and this will either be from importing the type of goods that meet our declining economic needs as those are produced more efficiently elsewhere. Not a good prospect to face.

Lastly the very company that needs financing does not get the financing it needs. Capital is presently hoarded in the billions on pristine balance sheets of the biggest corporations; billions are inert and uninvested in private equity funds and sitting in countless private bank accounts offshore. According to one report $1.8 trillion just sits in American listed firms alone.

The missing link is between cheap money and finding ways to achieve new corporate investments in the developed  economies that need this, otherwise there continues to be growing issues of dealing in the latest crisis or further kicking the can down the road in future pay off from continuous mounting debts and a lack of addressing bad loans and all the structural problems we are not facing today except in applying ‘selective’ austerity..

So why has this caught my attention?

Simply incremental innovation (sustaining, efficiency innovation) is getting us no-where fast. You see so many people within many of our organizations, big and small, working longer hours, feeling reduced identification with what they are doing and lacking that sustaining satisfaction. There are millions out of work that could offer positive economic activity contribution.  We could have innovation that is exciting, that is empowering and this does come from working on challenging that are game changing concepts that we often suggest today as distinctive, disruptive, breakthrough, radical and certainly are empowering.

We are failing to translate today’s set of challenges because the metrics applied are inappropriate to our needs today and in the future. We are applying solutions often in their vacuum, they boost sufficiently in small ways but lack boldness, changing the dynamics and policies, the way we should be measuring and valuing success. We reflect where we are in the West – far too timid, applying often just a real hard dose of harsh austerity, minimal structural reform that have a constraint on growth as we don’t people in their rightful place within the equation, they are being progressively written out of the capital model we seem to be locked into.  We apply “selective” innovation solutions to meet mostly short-term gains.

There are different solutions that need discussion

There are different innovative solutions, those I will attempt to outline in my next article, more to stimulate and trigger awareness of alternatives for today’s more jobless innovation outcomes.

In the meantime watch Professor Clayton Christensen’s talk at the World economic forum under “an insight, an idea with Clayton Christensen”. Worth watching, believe me, and then you might be reflecting on why we do need to change that does bring that real, fresh growth from innovation that has people and jobs as part of the lasting equation, that fits more in today’s world, needing innovation to begin a stronger recovery than we have seen in a number of years.

Self-inflicted wounds caused by jumping hurdles and closing gates on innovation

Many organizations have made Stage-Gate or a mutation of it, their ‘go-to’ innovation process that all innovation must ‘somehow’ pass through. Squeezing all types of innovation through this, for whatever people claim is a linear process, is simply wrong.

You can simply say: “we destroyed much to get sometimes so little out as the final outcome, when initially it was seen to be so promising.

The difficulty is that we are still struggling to find a real alternative, although there have been some recent noteworthy attempts, firstly by Jose A Briones and his Spiro-Level 3D approach and then by Paul R Williams, of the American Institute for Innovation Excellence, to move the discussions beyond the Stage-Gate process from this linear into more spiral concepts and beyond.

There has been an awful lot written on Stage-Gate, some people attacking it and suggesting it “guarantees mediocrity for your business”. Clayton Christensen has suggested “the Stage-gate system is not suited to the task of assessing innovation whose purpose is to build new growth businesses, but most companies continue to follow it simply because they see no alternative”

Stage-Gate has certainly earned its place for product management.

Stage-Gate is an ideas-to-launch process that encompasses a solid body of knowledge built up over the years and has for many become the blueprint for managing the NPD process, reinforcing effectiveness and efficiency as its core discipline. I would argue that’s it! It reinforces but at what cost? Innovation can actually miss out! Often it can also extract out much of the very process that we need from great innovation to leap forward and grow our businesses today. More on this later.

Employing this Stage-Gate methodology you can feel safe that there is behind it a body of knowledge on the best practice gleaned from studies of thousands of new product developments. The process takes you through stages or hurdles, passing through gates where ‘go/ kill’ decisions should be made. Organizations that thrive on having a ‘regime’ hold ‘fast’ to the Stage-Gate as their way to manage innovation. This rigidity of a given mindset is one of the real concerns about being totally reliant on the Stage-Gate. It works for product development that is more incremental in nature –the bread and butter of most businesses.

A really short history of the Stage-Gate first.              

Stage-Gate was developed, is registered as a trademark and certainly popularized by Robert Cooper. His first edition was published in 1986 in the early days of understanding the management of the innovation process. He has since updated with a second edition in 1993 and from this it gained its real traction as the recognized process, and established the term “Stage-Gate” clearly to manage within any product development process. His third edition in 2001 shifted the focus and became more taking the concept further on accelerating idea-to-launch. In 2011 he gave us a completely revised and updated fourth edition.  Robert Cooper reminds us that his Stage-Gate process has become the most widely used method for managing new products in industry today.

It has been suggested that this Stage-Gate process is a conceptual and operational map. Well, yes for NPD only maybe it is but today with all the other types of innovation needed to be considered by organizations it is NOT really capable of living up to this claim. I grant you can think through the process conceptually on how to manage this but I feel this grants Stage-Gate more than it really can offer. It is a stage-gate decision process for product development.

Do linear processes manage all the different types of innovation?

Organizations have become so use to thinking only product innovation they are attempting to drive ‘any’ innovation through the same system. This approach is placing so many self-inflicted wounds on the organization, often in the most painful way possible; through lost opportunities on achieving more significant growth, lost chances to fundamentally change the competitive game and ill-fitting attempts to fit innovation through this one process system.

Original fresh ideas get morphed into completely different end products that seem to become more incremental the further they have to accommodate all the jumping over these hurdles and passing through the stages and gates. It becomes the skill in trying to avoid being ‘killed off’ for often a lack of validation (often obscure)  and that famous cry of “give me proof” often of the unknown- how can you?

Stage-Gate ‘plays’ right into the hands of the bean counter, the risk reducer, the keeper of maximizing productivity, efficiency and effectiveness. Each gate, each hurdle forces the denominator down, mistakenly thinking this is reducing cost risk (often of the only true innovative part) and effective management of time will serve the organization well. This fuels the short-term protectionism we all cry about today, as well as it adds even more to the long-term detriment of mediocre innovation entering the market. We are still failing to ignite growth and continuing to disappoint customers with underwhelming offerings that still doesn’t meet their needs.

The Stage-Gate is not the panacea for managing innovation

I would argue we should stop regarding the Stage-Gate as the panacea for managing all of your innovation needs. Stage-Gate handles the incremental product cycle fairly well, but when you are on a more open innovation platform collaboration it struggles to be flexible, agile and fit the different challenges presented by the collaborating parties.

True innovation goes through such an iterative process; processes like Stage-Gate are simply not equipped to manage all of what this entails. Nor does it really pick up well on the growing impact any potential new business model innovation might signify, as it constantly wants to refer back to excepted existing practices and the structures in place and not novel or radically altering ones that can challenge the existing business model. Can you imagine something completely breakthrough or totally disruptive being forced through a Stage-Gate NPD process?

What also does happen when you have to work through separately the potential of the service innovation dimension or the myriad of other types of innovation? Too often we retrofit service instead of running this in parallel.

We have arrived, it seems to me, at a certain point where innovation is often being projected forward to a given solution and then worked back, so it can pass through the Stage-Gate system. Sometimes this is right if you spot a unique opportunity for a job-to-be-done need but we have to be more than careful of this ‘forming’ habit, it can exclude even greater insights and discoveries even here.

Recognizing limitations AND managing in new and different ways.

So we can recognize that Stage-Gate can work well for incremental and well planned out innovation but it ‘stutters’ and can ‘die’ when you need radical, new-to-the-world breakthroughs as you enter those far too many unknowns to try to run them through a system.

Whichever way you ‘wrap’ Stage-Gate it is still a linear process that has to go through justification at each stage and pass through the ‘gate’ in resolving the criteria expected, before it can go on. Irrespective of the innovation this can often load the process with bureaucracy, internal politics and tensions. You increasingly focus on preparing for these ‘gate’ meetings, losing valuable time often not on the idea and concept itself.

Invariably the questions asked to justify and validate requires much rethinking, leading too aspects of the proposal rewritten and then resubmitted, turning even more into growing time delays. This leads to escalating upwards through the gatekeepers to the senior manager, who is not fully engaged in the process, you lose even more time, he often does not have context, you lose precious opportunity, and you lose money in delays while this all gets sorted out, eventually and it goes on and on with growing conflict and tensions.

There is also a shift to ‘status and attainment’ on sitting on these reviewing committees rather than bringing real ‘value and benefit’ and often this gets confused to the detriment of the process . The process often dominates not the product concept itself. Stage-Gate might have become simply a safety first decision-making tool than an actual NPD process to help and assist.

You begin to justify the many unknowns somehow, you cater to the constant demands for proof at every step of the way, or otherwise you will never get your products out of the door.

We just end up with wicked compromises and the original idea deserves better, much better than that.  If we were honest with ourselves, we shave things off, we dilute, we radically alter what were initially great looking concepts and reduces them down to a pygmy of the original ‘wow’ concept.

Lean and rapid principles have some foundation value

I think where Dr Cooper has continued to explore in his Stage-Gate journey has been the move towards his lean and rapid principles. Those are closer to universal needs of all innovation. These are

  1. Have a clear customer focus
  2. Ensure as much front-end loaded as you can in assessment and testing
  3. Spiral development- find ways to be more iterative and greater community engagement
  4. Push for more holistic approaches of effective cross-functional teams
  5. Seek the right metrics, accountability allocation and continuous improvement
  6. Focus on building a more effective portfolio management through funnelling and appropriate resource allocation
  7. Looking to keep pushing for a flexible, adaptable, scalable and efficient process

These are useful ‘generic’ contributions to finding better solutions to having an updated innovation process, irrespective of type (of innovation). A lot about the Stage-Gate has organizing value to incorporate with this more holistic design of a process to manage all innovation ,it should certainly not be discarded but looked at with a different perspective.

What is called for, in my opinion, is to build even more on these lean and rapid principles but also to recognize and go ‘simply beyond’ the often fixating obsession of applying a product development process with decision gates that many currently have. Although it is not a bad organizing principle for business decision checkpoints, we ‘just’ need to go way beyond this to obtain the increased need for flexibility required, by considering all the different types of innovation an organization needs to consider and cater for them in some form of reviewing approach, if we can.

We need a different more agile, adaptable process that deals with innovation outside the ‘norm’ of managing incremental NPD, if we are ever going to move beyond the present, more common incremental mindset prevalent today.

The need to build and extend our capabilities and processes

We must certainly stop trying to treat all innovation projects with the same ‘Stage-Gate’ brush, squeezing it through the same process. We need to develop different ‘templates’ but have perhaps a common recognized set of decision points or organizing principles.

We certainly need to offer more autonomy to teams through a more robust Innovation Governance structure, this is for me critically important. We need to shift the mindset from ‘Go / kill’ to greater informing choices and options to consider. We need to be less reliant on data, more ready to sense, listen and make informed decisions as we go. We must make sure we capture the alignment with senior management on the strategic goals, the priorities and allocating appropriate resources according to the innovation type and challenge.

We need to allow for a greater freedom of thought, of investigating ‘breaking’ ideas, encourage explorations along the way. We need to push for more experimentation, conceptual work, design modelling so as we learn we can quantify, as we quantify we gain increasing identification and organization alignment. We know much of innovation is unstable, throwing out fluid information that is often contradictory; we need to capture these differences in more flexible, intuitive ways.

This calls for a lot more agility in thinking, in accepting often erratic behaviours to see if we can suddenly leap ahead. Hurdles, keeping to prescribed steps and trying to pass through decision gates needs some very fluid approaches but can still be in disciplined, informed ways but with totally different mindsets of searching for ‘better’ innovation outcomes.

The innovation system required today needs to be more flexible, adaptive, agile and scalable.

The system should not dictate innovation, it has to be more adapted to our different innovation needs and their circumstances so we can maximise innovation’s potential to lead growth.

We need to recognize that a breakthrough concept, a disruptive game changer, a new business model proposition or a multiple type innovation (product, service and BM) need different approaches, all much faster to be developed but with increasing levels of uncertainties being built into the ‘system’ not just taken out because we are uncomfortable with this or unsure how to handle this. Simply ask others to help you, there is no shame in this.

There have been significant changes in our understanding of innovation since Stage-Gate was first introduced. In the process, the culture required, the ways to manage, to align and to develop have all evolved. We must stop being a slave to the innovation system in place, often left over through legacies in the system and find ways to go beyond the often rigid, linear Stage-Gate process that organizations are locked into.

Innovation is complex and adaptive

Innovation should be understood as a system that will always have non-linear behaviours, it cannot be stage-managed in isolated events. It is complex and adaptive and the more we recognize the power of unpredictability, the significant variations, need for constant interactions and the careful selection of those ideas that need to be carried forward, the closer we might get to finding a more universally accepted innovation system.

Let’s stop trying to force innovation by jumping hurdles and closing gates that often do not apply, so we end up with self-inflicted wounds because we were on the wrong track.

We seem to pass over distinctive innovation, why?

I see so many suggestions on the types of innovation, actually I’ve offered a few myself, just go and take a look at http://cirf.pbworks.com for a different slant on this . For me, one ‘type’ of innovation that seems always to be often passed over is distinctive innovation in discussions. Why is that?

Most people work away in the trenches of incremental improvements and these outputs make up the vast substance of innovation activity.  Many working in these trenches of innovation on a daily basis would love to be part of a breakthrough but tend to find this is always ring-fenced for a few others to work upon. All they can often do is gaze over the fence or quietly accept this divide simply goes on.

I believe many who work within innovation simply do not share in this delineation of innovation activity, as it divides talent into separate teams, often pitting scarce innovation resource against each other, often in many unseen ways.  This divide of activities is often a real pity but perhaps another story for another day we can explore.

Disruptive innovation is seen, partly by the way it has its effect on us and our lives. Many of us are always happy to discuss disruptive as long as it does not have an impact on ourselves, on the receiving end. As long as we are the ones doing the disrupting, or just wanting to show off the status as being early adopters or within the early majority of the innovation adoption curve, then we love disruption. Otherwise it is a very uncomfortable space many are not prepared to travel too.

I would suggest most people understand incremental as the first type or basic stage of innovation, especially in larger business organizations. For me large organizations give this incremental area far to much of a focus in their resources and efforts, to the detriment of other options which is partly due to their risk-averse cultures. I really do think though, they miss a trick, by failing often to ramp up to breakthrough or disruptive innovation, by not focusing on building a real capacity to strive for ‘distinctive innovation’ on a more consistent, even sustaining basis.

We should move out of the incremental trap far more and not continue to reinforce it as many do. Lets ‘name and shame’ the incrementalists and get them thinking more about distinctive innovation.

The missing value of distinctive

I think we miss something and it is a great big pity. Distinctive innovation is actually not just the middle ground, the passing through point towards breakthrough or disruptive but it is the inspirational point for all of us to rally around far more than we do. Inspirational is really important, it is a great motivating point if we can all achieve far more in our identity with something distinctive than just incremental. Whatever we work upon in innovation we should seek something distinctive as an outcome. I don’t regard the latest flavored yogurt, improvements to the speed of our computer processor power or a few more pixels on our I-phone as anything more than incremental. This is to keep pushing up the awareness curve to extract longer value from the brand or product. I’m looking at something that makes it stand out, to be distinctive.

A transforming point for all to all gather around

I think there is far more value in talking about this transforming type of innovation that I call distinctive. It is not a complete breakthrough, it is not something that really disrupts an industry but it enables a certain leadership status, a chance to build a reputation for your brand or service. Distinctive innovation gives you the ability to build and lead in either design, in solution resolution, in improving function etc., etc. We forget to talk about this type of innovation as we move from incremental to breakthrough.

I believe there is a clear consensus building point for all working on innovation would want to achieve, that is knowing they are delivering something distinctive. It is the new innovation neighborhood we should all move towards and plan out. Lets find ways to get out of the overcrowded incremental slums.

Most people can’t jump or not even be able or allowed to think about breakthrough, as that is far too often  “left to others” What they can really identify with is working on being more distinctive and less trapped in the basic, incremental mindset. What do you think?  Would you want to be associated with something distinctive, I would.