October 19, 2012
Issue 3 – October 19, 2012
1.
Please, No Innovation ……………………………………...….……...………… Jeffrey Phillips
2.
Even You Can Innovate to Grow – Learn from Skanska ……...………….. Adam Hartung
3.
Breaking with the Past ………………..………………………….………….…. Rowan Gibson
4.
Game-Changing Innovation, Xerox, and True Collaboration ……..……… Braden Kelley
5.
Four Lessons from the Best Bosses I Ever Had ………..…..……. Deborah Mills-Scofield
6.
Innovation Big & Small ………...………………….….…………………………… Tim Kastelle
7.
Rapid Innovation Breakthrough ……………………………..……..……………. Nicolas Bry
8.
Move from Open Innovation to “True” Open Innovation …..…….…...……. Frank Mattes
9.
Identification is the Core of Innovation ……………………………..….…….. Paul Hobcraft
10.
Navigating an Ocean of Big Data ………………………..…….…………..….. Melba Kurman
Your hosts, Braden Kelley, Julie Anixter and Rowan Gibson, are innovation writers, speakers and strategic advisors to many of the world’s leading companies.
“Our mission is to help you achieve innovation excellence inside your own organization by making innovation resources, answers, and best practices accessible for the greater good.”
Cover Image credit: open door from Bigstock
Please, No Innovation Posted on October 12, 2012 by Jeffrey Phillips
I was thinking about innovation over the weekend when I asked myself “what’s the one thing that no senior executive is likely to say about innovation?” Every executive is likely to talk about innovation, to describe what his or her firm is doing. They are likely to talk about plans for innovation, as clients demand new products and services. What I don’t think you are likely to hear is executives telling their employees not to innovate, or executives talking to the press or shareholders about a lack of innovation. Can you image a CEO who came out and said to his team “Please, no more innovation”?
Sometimes, to understand what’s going on it takes an extreme or almost inverted perspective to shine a light into the darkness. Certainly, few CEOs would last long if they downplayed the importance of innovation.
Innovation is seen as an important differentiator, and something every executive should support and embrace as a means to growth. Innovation is as American as apple pie and motherhood, and has become almost as overused and as saccharin. So we aren’t likely to hear denunciations of innovation, or executives verbally downplaying its importance. Innovation, or at least the appearance of innovation, is exceptionally important.
But what we don’t often hear about is the actual work of innovation, the investments made, the people trained, the mistakes made, the successes that create new segments. Innovation, like dieting or getting into better physical shape, is something we all know we SHOULD do, but is also something that is easy to put off to another day. If talking about physical fitness contributed to weight loss we’d all be exceptionally thin. Unfortunately, staying in shape and physically fit requires more than talking – it requires a consistent commitment and focus on specific goals. Likewise, innovation requires a constant commitment that is intended to deliver specific outcomes. No one innovates for innovation’s sake – they innovate to create a new product or service, to create new revenues and profits, to differentiate from another competitor, to stake out a completely different market sector. Since we know that few if any CEOs will reject innovation, and innovation isn’t widespread and fully competent in many organizations, what can we do to build and sustain innovation as a consistent competency?
Build a plan
Most innovation is undertaken as a reaction to some competitive threat or market shift. This means most innovation is REACTIONARY rather than the result of an intentional plan. When we react we tend to invest just enough to get a product just good enough to compete in the market. So many of our “innovations” are reactions to competitors with the goal of responding with a product that’s just good enough to compete. Rather, we should plan for innovation proactively. This would force our internal teams to think about innovation more broadly, account for innovation in annual planning and most importantly funding exercises. Further, a plan demonstrates vision and strategy. One of
the most common questions we hear when working with innovation teams is: how does innovation fit with our strategy? That’s not a question you should ask a consultant, but one your executives should be able to answer easily.
Establish goals
Without a goal any outcome can be declared a success. Far too many firms are expected to innovate but without any clear goals or measurements. This is akin to a weight loss program with no clear outcomes or end state metrics.
Many clients ask us about the “best” goals for innovation. My response is that the 3M goal for innovation, which they define as 20% of revenues resulting from products less than 3 years old, is a good one. Defining a revenue target for new, innovative products requires that a firm innovate and keep innovating. In fact I’d like to see an initial target and then each year inch that target up a bit more. Once 20% becomes a fairly “easy” target to hit, let’s move it up to 25%.
Appoint a Sponsor
In many programs that help people lose weight or quit bad habits, the program insists on a “sponsor” who is an honest broker for the person trying to change habits. The sponsor is meant to call the person to account – to ensure they are doing the things that will help them achieve their goals. Likewise, innovation needs an honest broker or a sponsor. This could be a senior executive who constantly reviews innovation activities and compares to targets. He or she can assess whether or not the firm is living up to its commitments, and encourage the firm to do more. After all, we are talking about changing the habit of efficiency into the habit of innovation.
Find a coach; Get encouragement
Whether you are trying to lose weight or trying to quit a bad habit, you need resources to accomplish your mission. Those resources may be friends and relatives who give you great advice, or a sponsor or a charitable organization to provide support or encouragement. Changing attitudes and behaviors requires a constant reinforcement of goals and rewards for short term small successes. Innovation needs a coach and plenty of encouragement. If it were easy, every firm would be doing it proficiently. Evidence suggests that few firms do innovation well, and most don’t understand how to get started or how to maintain the momentum.
Stick with the program
In any change program you will encounter obstacles. Some of these may be your own cravings. For me, nothing beats mint chocolate chip ice cream as a dessert. But if I want to lose weight or at the least maintain the weight I have I have to stick with my exercise program and my diet. Deviating from the program can and will have adverse affects. Innovation faces the same dilemma. You can’t jump into and out of an innovation program. There are simply too many factors reinforcing the status quo that will make it very difficult to swap into and out of an innovation program. The risk factors, inertia and resistance to change will become barriers to innovation. If you plan to become innovative, plan to stick to the program, come rain or shine.
Examine the Commitments
Few CEOs or senior executives are likely to describe innovation as unimportant or unnecessary. But the real assessment of their focus and commitment should be an investigation into the points I’ve made here. Are the commitments in line with the communication? Does your organization understand the breadth and depth of the change necessary to incorporate innovation as a consistent discipline?
It is more dangerous to start innovation without resources and without a clear purpose than not to start at all. Given the inertia and resistance, your team will get few chances to get innovation right before the organization becomes cynical and disillusioned about innovation. Most corporate cultures are very good at sniffing out what initiatives will have deep executive commitment, funding and support, and which are talking points that won’t be supported. If you say you want innovation, be sure to provide the commitments necessary to sustain it.
image credit: glassdoor
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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.
Even You Can Innovate to Grow – Learn from Skanska Posted on October 11, 2012 by Adam Hartung
I like writing about tech companies, such as Apple and Facebook, because they show how fast you can apply innovation and grow – whether it is technology, business process or new best practices. But many people aren’t in the tech industry, and think innovation applies a lot less to them.
Whoa there cowboy, innovation is important to you too!
Few industries are as mired in outdated practices and slow to adopt technology than construction. Whether times are good, or not, contractors and tradespeople generally do things the way they’ve been done for decades. Even customers like to see bids where the practices are traditional and time-worn, often eschewing innovations simply because they like the status quo.
Skanska, a $19B construction firm headquarted in Stockholm, Sweden with $6B of U.S. revenue managed from the New York regional HQ refused to accept this. When Bill Flemming, President of the Building Group recognized that construction industry productivity had not improved for 40 years, he reckoned that perhaps the weak market wasn’t going to get better if he just waited for the economy to improve. He was sure that field-based ideas could allow Skanska to be better than competitors, and open new revenue sources.
Skanska USA CEO Mike McNally agreed instantly. In 2009 he brought together his management team to see if they would buy into investing in innovation. He met the usual objections
We’re too busy
I have too much on my plate
Business is already too difficult, I don’t need something new
Customers aren’t asking for it, they want lower prices
Who’s going to pay for it? My budget is already too thin!
But, he also recognized that nobody said “this is crazy.” Everyone knew there were good things happening in the organization, but the learning wasn’t being replicated across projects to create any leverage. Ideas were too often tried once, then dropped, or not really tried in earnest. Mike and Bill intuitively believed innovation would be a game changer. As he discussed implementing innovation with his team he came to saying “If Apple can do this, we can too!”
Even though this wasn’t a Sweden (or headquarters) based project, Mike decided to create a dedicated innovation group, with its own leader and an initial budget of $500K – about .5% of the Building Group total overhead.
The team started with a Director of innovation, plus a staff of 2. They were given the white space to find field based ideas that would work, and push them. Then build a process for identifying field innovations, testing them, investing and implementing. From the outset they envisaged a “grant” program where HQ would provide field-based teams with money to test, develop and create roll-out processes for innovations.
Key to success was finding the right first project. And quickly the team knew they had one in one of their initial field projects called Digital Resource Center, which could be used at all construction sites. This low-cost, rugged PC-based product allowed sub-contractors around the site to view plans and all documentation relevant for their part of the project without having to make frequent trips back to the central construction trailer.
This saved a lot of time for them, and for Skanska, helping keep the project moving quickly with less time wasted talking. And at a few thousand dollars per station, the payback was literally measured in days. Other projects were quick to adopt this “no-brainer.” And soon Skanska was not only seeing faster project completion, but subcontractors willing to bake in better performance on their bids knowing they would be able to track work and identify key information on these field-based rugged PCs.
As Skanska’s Innovation Group started making grants for additional projects they set up a process for receiving, reviewing and making grants. They decided to have a Skansa project leader on each grant, with local Skansa support. But also each grant would team with a local university which would use student and faculty to help with planning, development, implementation and generate return-on-investment analysis to demonstrate the innovation’s efficacy. This allowed Skansa to bring in outside expertise for better project development and implementation, while also managing cost effectively.
With less than 2 years of Innovation Group effort, Skanska has now invested $1.5M in field-based projects. The focus has been on low-cost productivity improvements, rather than high-cost, big bets. Changing the game in construction is a process of winning through lots of innovations that prove themselves to customers and suppliers rather than trying to change a skeptical group overnight. Payback has been almost immediate for each grant, with ROI literally in the hundreds of percent.
You likely never heard of Skanska, despite its size. And that’s because its in the business of building bridges, subway stations and other massive projects that we see, but know little about. They are in an industry known for its lack of innovation, and brute-force approach to getting things done.
But the leadership team at Skanska is proving that anyone can apply innovation for high rates of return. They:
1. Understood that industry trends were soft, and they needed to change if they wanted to thrive.
2. Recognized that the best ideas for innovation would not come from customers, but rather from scanning the horizon for new ideas and then figuring out how to implement themselves.
3. Weren’t afraid to try doing something new. Even if the customer wasn’t asking for it.
4. Created a dedicated team (and it didn’t have to be large) operating in white space, focused on identifying innovations, reviewing them, funding them and bringing in outside resources to help the projects succeed.
In addition to growing its traditional business, Skanska is now something of a tech company. It sells its Digital Resource stations, making money directly off its innovation. And its iSite Monitor for monitoring environmental conditions on sensitive products, and pushing results to Skanska project leaders as well as clients in real time with an app on their iPhones, is also now a commercial product.
So, what are you waiting on? You’ll never grow, or make returns, like Apple if you don’t start innovating. Take some lessons from Skanska and you just might be a lot more successful.
image credit: business graph image from bigstock
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Adam Hartung, author of Create Marketplace Disruption, is a Faculty and Board member of the Lake Forest Graduate School of Management, Managing Partner of Spark Partners, and writes for Forbes and the Journal for Innovation Science.
Breaking with the Past Posted on October 13, 2012 by Rowan Gibson
For most companies, there comes a moment when the only way to continue growing is, paradoxically, to divest things – to get rid of traditional parts of the business where growth has stagnated and to get into new, more innovative businesses that have the potential to grow faster.
In practice, this rarely happens. When most managers are put in charge of an existing business, they tend to feel as though they have inherited an important legacy – one which should be guarded and treasured, and then passed on to the next generation. But the question is, Will they remain chained to that legacy, or are they prepared to leave it behind and move on to someplace new?
That’s why a company like Virgin is interesting. Richard Branson doesn’t seem to have a sentimental attachment to anything. The moment he concludes that one of his businesses will not be profitable – if it doesn’t seem to have the potential to create wealth and value – he closes it down or sells it off. He basically just gets rid of it and makes it go away.
Branson is not bothered about nostalgia. Admittedly, he may have some affection for his airline, because it’s a big and highl y visible flagship for the company that flies the brand around the world (without this icon, Virgin would probably be a ragtag group of companies without much of a global image). But fundamentally Branson’s goal is to create wealth using all kinds of business opportunities – not to just to take his current business and make it bigger.
Most managers are not like that. The temptation is always to think about the company in terms of a set of businesses they needs to be nurtured, year after year, where the goal is to make the whole thing bigger and bigger. But, at some point, that can no longer be done. As Gary Hamel points out in Leading the Revolution, there is a “law of large numbers” that affects companies of the $30-50 billion size – they usually hit a wall at some point because there’s just a natural limit to how fast you can grow the market value of a company that size.
The ultimate goal, therefore, is not to get bigger and bigger but to find things that create more and more value.
This is something that must be handled very subtly. It doesn’t mean that the minute some business starts to under-perform, you have to get rid of it. Instead, you need to go in and say, “What are the chances for innovation here? What haven’t we done so far?”
In other words, before you decide to get to rid of something, you have to ask yourself if it could be reinvented in some way. But by the time you get to the $30 billion, $40 billion or $50 billion size, you need to be thinking about what to throw out, because sometimes you can only move forward if you break the legacy chain. And it is better to do that voluntarily than to wait until somebody forces you to do it.
Contrast Kodak with Fujifilm. Both firms realised in the 1980s that the future of photography was digital. But only Fujifilm was truly willing, as Lee Iacocca once put it at Chrysler, to kill its own product before the competitors did it. While Kodak clung to its core business like a sinking Titanic, seemingly afflicted with complete and utter denial, Fujufilm cleverly diversified away from film into new products and new businesses – nanotechnology, cosmetics, chemicals, industrial materials, medical-imaging. Everyone knows how the story ends.
At a given point, you simply have to be willing to move on from where you are to where you need to be. As 3M and DSM did many years ago, by deciding to ditch their mining businesses and get into chemicals. Or as IBM did, when they took the decision to divest themselves of all the PCs, laptops, and printers, and focus instead on software and services. Or as GE and P&G have done repeatedly, by selling off a lot of underperforming assets and getting out of low-growth businesses. Or as Nokia did in the early 90s, when they said goodbye to their long history of making tires, rubber boots, paper and a whole bunch of other stuff and moved agressively into mobile phones. In a world of hyper-accelerating change, hyper-competition, rapid commoditization and unprecedented customer power, every firm needs to go through Joseph Schumpeter’s “perennial gale of creative destruction”, whether it likes it or not.
This, of course, is very easy to say but very difficult to do. If, like Kodak, you have been in a particular business for over 100 years, the tendency is to say, “No, no, we couldn’t even consider doing saying goodbye to that. These are our roots – our heritage. It’s how our founders started the company. We’ll always be in these businesses.” But today we increasingly need the courage to say, “Look. These pieces of our company are holding us back. We’ve got to get rid of them if we want to make it to the future.”
At most big companies this doesn’t happen anywhere near enough. Instead of moving on to create new, high-growth sources of profit, their nostalgia keeps them chained to the low-growth businesses of the past. This puts a serious inhibition on their power to innovate at the deepest level and therefore on their capacity for strategic renewal.
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Rowan Gibson is widely recognized as one of the world’s leading experts on enterprise innovation. He is co-author of the bestseller Innovation to the Core and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.
Game-Changing Innovation, Xerox, and True Collaboration Posted on October 15, 2012 by Innovation Excellence
Interview – Paul Austin and Denise Fletcher – Xerox and ACS (a Xerox company)
I had the opportunity to interview Denise Fletcher, Vice President Innovation, Healthcare Payer & Insurance of ACS (A Xerox company) and Paul Austin, PhD, Principle Researcher for Xerox Innovation group last year, about open innovation participation, strategies, and barriers to innovation success.
Here is the text from the interview:
1. Do you feel that companies need an innovation strategy? If so, where does open innovation fit in?
Innovation is one of the only remaining differentiators – virtually everything else in the supply chain can be outsourced – so innovation is vital to growth. Open innovation fits in as a thoughtful part of the overall strategy; no one has all the answers or perfect understanding of customers, so open innovation must contribute solutions to customer needs while not eliminating all differentiation. For example, large software systems often need to incorporate competitive features; open innovation can help sustain the baseline customer expectations while letting the development team focus on the next generation of the features that make you special and distinct. In some cases you can permit innovation in a box, like app development for the iPhone, but innovators will be frustrated by the boundaries.
2. Why is it important for organizations to consider participating in open innovation or why did your organization begin its open innovation effort?
We certainly have no monopoly on good ideas – often others can make our ideas better, and we can do the same for them. Often, others also have a different perspective on our customers’ needs, or understand future customers’ needs that we haven’t even considered yet – they can help us avoid product myopia. Invention is not innovation – innovation also requires understanding needs and meeting them. This is why our ethnographers are so vital to our research. We’ve admired alphaWorks since its inception.
3. What should an organization be aware of if they decide to pursue open innovation?
This is a big culture shift if you are used to a closed system. You’ll have to do some serious and honest introspection to figure out what your real, differentiating value add is. Then you can start to open the rest. Open innovation will impact your legal, marketing, sales, engineering, manufacturing, and management, all in a big way.
4. Which companies do you look to as leaders in open innovation?
Certainly IBM. Sun, especially prior to Oracle. Google, particularly chrome and android. Practice Fusion. Facebook. Tesco. Apple to a bounded degree. (I’m an engineer at heart, so I apologize to those with great innovations in business that I’m ignorant of.)
5. What is the most important culture change for organizations to make in order to support innovation?
The World is Flat. Anyone can have a great idea – the challenge is in pursuing enough of them fast enough to make a difference. And the best idea does not always win. Don’t forget that there are many thousand dormant open source projects lying around in cyberspace. Agility is good, and hard, and tiring, and energizing.
6. What are some of the biggest barriers to innovation that you’ve seen in organizations?
This is easy – my old nemesis NIH (not invented here). Systems that are already bloated with features. Legal – particularly when we want indemnity around products in our supply chains. Visibility and accountability, all the way through to our customers.
7. What skills do you believe that managers need to acquire to succeed in an innovation-led organization?
Ethnography! To understand your customers’ needs, both explicit and subtly observed, that you can form solutions that really work for them. The second is an intuitive skill to be able to take discreet ideas as they are being formed and visualize how they can connect across industries and businesses. You must be able to see the possibilities and be willing to test those hypothesis.
8. If you were to change one thing about our educational system to better prepare students to contribute in the innovation work force of tomorrow, what would it be?
Tough question! We need science, math, engineering, and programming skills, of course. But we also need respect for others ideas, people observational skills, and ability to find gratification in making things better for others. This speaks to a broad education; I didn’t appreciate the breath of requirements I experienced in college until I worked with others that were too focused. The senior projects in my high schools have had a positive effect; students must select a problem, a mentor, work on an activity to help solve it, and report on the results. I’m sure it’s a lot of work to organize, but it pulls together skills and learning for the students in an important way.
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Braden Kelley is a popular innovation speaker, embeds innovation across the organization with innovation training, and builds B2B pull marketing strategies that drive increased revenue, visibility and inbound sales leads. He is currently advising an early-stage fashion startup making jewelry for your hair and is the author of Stoking Your Innovation Bonfire from John Wiley & Sons. He tweets from @innovate.
Four Lessons from the Best Bosses I Ever Had Posted on October 12, 2012 by Deborah Mills-Scofield
My first boss at Bell Labs had a habit of yelling. While he was an equal-opportunity yeller, when he shouted at me in my first department meeting, I got up, told him when he wanted to talk, not yell, I’d be in my office and walked out. I was 20 years old, just out of undergrad, and sitting among a group of aghast Ph.D.’s . Perhaps this was not the best initial career move. But about 30 minutes later, he walked into my office and apologized. He never yelled at me again (though he did keep yelling at the rest of the team), and became one of three manager-mentors that shaped my career at Bell Labs and AT&T — and taught me to manage others and myself. I’ll share one story from each boss and the lesson I learned from each.
That first boss, the reformed yeller, provided multiple opportunities for visibility up to the president of Bell Labs, coaching me all the way. He went out on a limb to make me the first person promoted to Member of Technical Staff (MTS) without a Ph.D. or M.S., and under the age of 25. He gave me the freedom to design my own role and the autonomy to accomplish my goals, only “interfering” to remove obstacles and create more visibility. When I was going to quit to move to Ohio and marry my husband, who had left Basic Research at Bell Labs to teach Physics at Oberlin College, he pulled strings with HR and his counterpart at AT&T for our project (and my next boss) so I wouldn’t quit. These two men arranged my transfer to my new boss’s organization, moved me to Oberlin, Ohio and flew me back and forth for nine years…just so I wouldn’t quit.
Lesson: Let Your People Go. When you find great talent, do what you need to in order to encourage and support them. Treat them justly and do what’s right for them and the organization over what’s right for you personally. Give them opportunities to excel and succeed and air cover if they fail. Be willing to take “personal” risks for the right employee.
I knew my second boss already, having worked with him for a year or so with mutual respect and admiration. He fully supported my telecommuting, since it “proved” our project in action, and funded a home office with every device imaginable for 1988, including a laptop and cell phone. I commuted weekly to New Jersey and monthly to Europe and Asia. I designed my own job with my own set of outputs and outcomes — he provided the resources to make it happen. He taught me how to succeed at corporate politics without compromising my integrity and championed my work up the executive ladder. He orchestrated a “loan” of me to the president’s office for a special project that was a significant career opportunity. And, when the project was done, he helped me choose from my available options: stay in the executive suite, go with the business I’d helped start as a result of the project, or return to my organization. I did not want to stay with the executives — there were no role models for me in the C-suite (which they interpreted as no women and I clarified as no humans). I wanted to go back to my boss and his wonderfully addictive leadership style, but he pushed me to join the management team running the new business.
Lesson: Light the Fire and Clear the Path. Guide your people’s passion and get out of the way: the autonomy and freedom I was given to create and do my job exponentially increased my passion, excitement and success. My manager-mentors made sure my passions aligned with organizational direction, gave me some high-level boundaries, resources, and introductions to make it happen. They removed obstacles, showed me how to handle challenges, provided opportunities, and took the blame while giving me the credit.
The new business’s management team consisted of many Labroids (Bell Labs folks), and my next boss also believed in autonomy, outcomes over outputs, customer-centricity, and developing his people. The experiences, opportunities, successes, failures, and learnings during that “start-up” time were amazing and we had a lot of fun creating a separate culture. While working for him, I had my first child. In addition to the very generous maternity leave benefits, his support and communication with the rest of the team in New Jersey made it possible for me to work from home, without travel, and still have significant impact on the business. For him, the fact I wasn’t in New Jersey meant I had a politically unbiased perspective on the business’s needs. He’d handle the politics; I’d handle getting the work done with my team. Unfortunately, AT&T was changing dramatically, and not positively. We all started leaving. But to this day, my friendship with my former boss remains strong.
Lesson: Remember, They’re Human. Many companies treat their employees as employees — nicely and kindly, even generously — but not as humans. My manager-mentors made it clear that I mattered not just for what I could do, but also for who I was. It wasn’t just about the generous maternity leave or the work-from-home flexibility, although I was grateful for both. Boss #2, for instance, required that I take two consecutive weeks of vacation to fully relax. My assistant took care of everything and virtually banned me from checking email, even though we would still do the New York Times crossword puzzle every day — an important ritual for us no matter where I was in the world. While I had “official” vacation days, no one ever kept tabs on them unless the number to be carried over was too large. It was important to all my bosses that I learn from their successes, mistakes and not share their regrets.
What else did I learn from three incredible manager-mentors? While there were many lessons, this has stood out for me over the past 30 years: Trust trumps everything. And everything flows from trust — learning, credibility, accountability, a sense of purpose and a mission that makes “work” bigger than oneself.
Yes, I’ve been extremely blessed and my circumstances were, and unfortunately still are, atypical. But they don’t have to be. As you look at your organization, at your people, at your culture, please think about how you can apply just one of these lessons, perhaps even just one part of one lesson. The benefits last decades.
This article originally appeared in HBR
image credit: belllabs.com
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Deb, founder of Mills-Scofield LLC, is an innovator, entrepreneur and non-traditional strategist with 20 years experience in industries ranging from the Internet to Manufacturing with multinationals to start ups. She is also a partner at Glengary LLC, a Venture Capital Firm.
Innovation Big & Small Posted on October 15, 2012 by Tim Kastelle
Can big companies innovate?
Of course they can. Even though that question has been getting asked a lot recently, it’s not really a very interesting one. It actually goes back at least to Schumpeter, who thought about the issue throughout most of his career. He famously changed his mind on the question of big versus small, mainly because the process of innovation changed during that forty year period.
A much more interesting and useful question is: what can my organisation do to be more innovative? The point is that innovation is not deterministic – you’re not doomed if you’re big, and you’re not automatically innovative if you’re small. The critical issue to figure out how innovation fits with your strategy and then what skills and processes you need to innovate in your particular context.
Size becomes important when you think about context – the way that you innovate will be different if you are big than it will be if you are small. No matter what the context, innovation is a process – it’s the process of idea management. I’ve pictured it something like this:
However, in the excellent report on public sector innovation in Australia, Empowering Change (downloadable here), led by Alex Roberts, they had a slightly different version of this model. It was adapted from a report on public sector innovation from Deloitte, and theirs looks like this:
I made the fourth circle red, because that is the one that I’ve always had some trouble getting my head around. But some of my recent discussions have given me some insights into this. The report describes Sustaining Ideas as “keeping the innovative initiative going and integrating it, which includes monitoring and adapting where necessary.”
This ends up being one of the key areas where innovation is different for big and small organisations. If you are a startup, you don’t need to worry too much about sustaining innovation initiatives. If you fail to do this, you go out of business. Simple enough.
But if you’re big, you have plenty of other things to worry about. You have quarterly objectives to meet. You have other processes you need to make more efficient. And so on. Not so simple. So if you’re big, and you’re trying to innovate, a lot of effort needs to go into this part of the idea management process.
This came through in my discussions with Stacy Coughlin and Kristina Bobrowski about the Xiameter business model innovation that Dow Corning implemented. Describing the same case, Jeffrey Phillips says:
“The hard work, they said, wasn’t in setting up the new distribution system or attracting customers. The hard part in changing the model wasn’t in the external efforts, but in the internal workings of Dow Corning.” “It turns out Newton was right. Objects at rest tend to stay at rest. In fact, they come to prefer to remain at rest and actively resist movement and change. It’s not our customers or our markets that will resist innovation. In fact they often want and need new products and services. No, the biggest enemy of innovation is us – the compendium of existing expectations, processes, knowledge and experience.” So while big firms can indeed innovate, this means that they need to manage the process differently – there’s no one-size-fits-all solution – sorry! If you’re big, what are some of the things that you should do? Here are some ideas:
Increase your innovation speed. If you’re going to innovate like the small, agile organisations, then you need to act more agile yourself. Here’s Phillips again, in a different post on the importance of velocity in innovation:
“If these assumptions are true, then VELOCITY, as defined as speed in a specific direction, becomes very important for a firm’s ability to grow and compete. Relying on long product life cycles is not an option. Customers will demand new products, new features at an ever increasing rate. Firms can’t simply “dump” older technologies and products into “developing” markets because those market too understand the product/feature acceleration and reject older products.” Phillips recommends innovating your product development process, making innovation a core part of your strategy, and building executive support for this vision as the three critical steps to achieve this.
Open up! Think about the five steps in the innovation process model. What are big firms good at? They are great at getting things to market – that’s how they’re big. So they have idea diffusion covered pretty well. But this is often a huge problem for smaller organisations. They might have brilliant ideas, that have been executed very well, but they can’t get anyone to pay attention to them. How do they get around this? Collaborate.That’s the point that Ralph Ohr raised in his recent post, and Scott Anthony makes a similar point:
“WSJ: Are you saying startups are no longer capable of innovation? Anthony: I don’t want to go so far as to say startups are pointless. But today, the second a startup has had a taste of success, the race is on, because anyone can copy them. WSJ: What’s in store for these smaller companies then?
Anthony: They have to recognize their success can’t be predicated on the stupidity or slowness of big companies. It might be time to start thinking about partnering with a big company instead of just being pirates.”
Get to know your customers deeply. Often, big firms resist innovation because they think that they know best. But one of the things that they can do with their extra resources is invest more in learning what their customers really need. And you don’t do this through follow the customer home – as Soren Kaplan explains:
“Intuit’s innovation success is tied to a value for finding and savoring customer surprises– unexpected insights about customer needs, problems, and desired experiences that can’t be anticipated or pre-defined. That’s why the company does customer “follow-me-homes,” where everyone from CEO Brad Smith to engineers and marketers immerse themselves in the customer’s natural environment to see how things are working (or not) in the real world.” This is actually one of the techniques of ethnography, something that PARC has been investing in over the past few years. Ellen Isaacs from PARC talks about how this works:
“With ethnography, you’re more interested in what people do than what they say (usually two different things), and you’re more likely to come out of it with answers to questions you didn’t know to ask. At its best, ethnography uncovers “aha!” insights that transform thinking. But since nobody knows know what they’ll learn, there’s no guarantee — and that makes people nervous.” The issue isn’t big versus small. And size doesn’t determine whether or not you can innovate.
The question to address is: what’s best for us? And the key point is that the answer will probably be different if you’re big.
image credit: big and small image from bigstock
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Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.
Rapid Innovation Breakthrough Posted on October 16, 2012 by Nicolas Bry
Addressing organizational and design challenges We often separate innovation management into organization and process:
Structural change and organizational undertaking cover corporate governance aspects like “The Ambidextruous Organization” (Charles A. O’Reilly), “Organizational DNA for Strategic Innovation” (Vijay Govindarajan), “Open Innovation” (Henry Chesbrough);
Innovation process and design approach unfold methodologies to create meaningful products such as ‘design thinking’ (David Kelley), ‘user-led design’ (Eric Von Hippel), ‘shortening new product development’ (Smith and Reinersten), ‘rugby approach’ (Ikujiro Nonaka), ‘continuous innovation management, innovation culture’ (Gary Hamel), ‘innovator’s dilemna & solution’ (Clayton Christensen), ideation and problem solving approach.
I was recently debating about Rapid Innovation with Professor Christophe Midler, Research Director at the Polytechnique Management Research Center, and Innovation Management Chair Professor at Ecole Polytechnique.
He told me this sharp statement which struck me: “The strength of the Rapid Innovation model is that it addresses both innovation disciplines, organization and design process. Actually, the properties of what you design are further enabling organizational undertaking for innovation: designed thing changes the organization of innovation.”
When modular design changes the organization Well, let me to take a moment to translate this intense summary.
Rapid Innovation is a kind of “New Corporate Garage” as named by Scott D. Anthony: it starts with organizational impact, by creating autonomous creative units or innovation teams. It crafts an organizational model based on:
setting-up an agile and autonomous innovation entity;
designing within a framework involving “creative tension”, an exciting environment mixing stimulating and stretched goals with a proven expertise in innovation discipline;
aligning with innovation group strategy, across a shared portfolio and permanent connections, in order to facilitate adoption of the innovation output by the core business.
In the course of seeking adoption and engagement from the core corporation, we came to refining our innovation process and shaped modular design, an “innovation by component” approach.
“Designing with, rather than designing for” is the mantra of Innovation by Component. A component unfolds the idea of combining breakthrough innovation and bold exploration, with the leverage of letting others get ownership of your innovation in their activity, and build value on top of your platform.
Concretely a component is a functional module, that can be embedded in multiple services through an API, delivering relevant data to them, and giving birth to unexpected derived consumer-facing services : “one stone, multiple birds!”
Rapid Innovation unwraps plans for organization and process. Moreover, the module we design, and its properties, changes other’s units organization. By empowering them with building blocks, it puts them in capacity to develop their services, to “hack our innovation” or start a “project fork” (taking a copy of software module and developing independent code on it, creating a distinct piece of software).
Component distribution
Modular design enables partner organization to innovate, like the way you pass the ball creates an opportunity to score a try.
Tangible benefits This mix creates a real impact, and brings tangible benefits in term of speed, agility, and distribution:
Time to Market and Flexibility. Applications and components are decoupled: while product manager focuses on application and user interface, innovation team can focus on the component, enjoying meaningful autonomy, and allowing the team to speed up, when needed.
Parallel Implementations. The component can become a hub easily and receive simultaneous connections from different applications.
Crossfunctional Enhancement. The needs of the different applications are mutualized in order to enrich the component functions: it’s a virtuous circle of innovation, the progress of any member is benefitting to all.
Cooperation. Concentrating on conception of components avoids mixing genres. It guarantees to the product manager full control on the user interface of his application. In such conditions, the possibility of dialogue is stronger and enables spontaneous exchanges.
Setting-up a portfolio of components enables infinite possibilities of modules combination and assemblage. Consumer-facing applications can benefit from a continuum of improvements, strengthening customer relationship and loyalty.
Modular design is like the “radical incrementalism, leading at last to disruption” as Armand Hatchuel puts it in the case of Tefal. “None of the individual innovations involves a fundamental change, but the succession of the small steps built the important change observed in retrospect”.
Radical Incrementalism
Creative components are raising an API ecosystem: whereas APIs often address to external third-parties, we launched an internal ecosystem of APIs to accelerate innovation.
API ‘Design Thinking’ Designing a successful component becomes then a major issue. Excellency in code writing must be complemented by strategic innovation skills, and proceed on the route of ‘design thinking’: designing an API as a truely accomplished innovation component is a cultural achievement.
Here modular design is not a split of a complex system in multiple modules, it is not either the exposure of internal assets through infrastructure APIs like Amazon managed successfully: it’s a bottom-up design, an organic innovation embedded in “a future object already modularized” as Christophe Midler noticed.
Meaning: A clear meaning, “a reason why”: whether it results from identifying market trends, or from observing users, one must forge his conviction, establishing willingness to take risk, and shaping the focus of the API. API is not such a sexy word that it drives someobe to get up in the morning: we need an enticing vision! Meaningful innovations also meet with social imaginaries. They fit in the power of ‘sameness’ described by @brada: “you don’t read rental car manuals because all cars work basically the same way!”.
Target: your service gets better when you can project who your customers will be, and listen to them once the service is alive. “Focus on user, not yourself; your developers can’t read your mind!” underline @brada and @kcwalina. Having in mind the end-user, we have to imagine for our developer’s community the best methods and formats (“go for plurality”), assess data relevance and their vizualisation, differentiate the access (‘closed API’, ‘partner API’ , ‘open API’ ), and measure usage.
Evolutivity: API design goes the prototype-test-iterate loop. Unexpected demands may arise, coming from other areas : API must be evolutive enough to travel across borders. Start focusing your development endeavor and prepare to extend, or in @brada words “Do as little as possible now (but no less) to ensure room for extensibility in the future!”
Scalability: no one is immune to succes: the more customers your innovation seduces, the more workload will support your servers. In this domain, Google and Faceook are totally impressive, being able to add millions of users without any interruption of service.
Innovation Ecosystem: your component was initially targeting a handful of services: growing your innovation business requires a holistic approach. ‘Crossing the chasm’ involves systematic marketing and a customer relationship state-of-mind. Providing online explicit documentation (“don’t force consumer to be archeologist of your innovation (@brada)”), staging the API with a “killer demonstration-app”, making an appropriate exposure, streamlining subscription process, helping others to design (“Make your API hard to misuse, explicit error message suggest parameters values” suggests @piwik), and monitoring users return loop are required tasks.
Desirability, openess, originality are the features of a successful component.
Making your creative module a smooth living operating system, and shaping a portfolio of combinable components lead to perpetual innovation: APIs, by delivering data, facilitate knowledge sharing, and can create endless chain reactions for innovation. While scaling innovation in the 20th meant manufacturing, in the 21th, scaling innovation relies on information network connections.
Credits: article.wn.com, retaildesignblog.net, eagleionline.com, flickrhivemind.net
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Nicolas is a senior VP at Orange Innovation Group. Forward thinker, he created international digital BU, with a focus on interactive, social and smart TV. He graduated from Supélec and HEC Business School, completing a thesis on “Rapid Innovation” which he implemented successfully at Orange through “component innovation” path. He blogs at nbry.wordpress.com and tweets @nicobry
Move from Open Innovation to “True” Open Innovation Posted on October 10, 2012 by Frank Mattes
In the 10 years since Henry Chesbrough published his groundbreaking book on Open Innovation, a lot has happened. Almost any firm claims to do Open Innovation. However, if you look closely, most of the firms do not do true Open Innovation – they are merely running a multitude of open approaches to innovation.
This article explains the fundamental differences between “Open Innovation” and true Open Innovation, provides data where firms are standing on their journey to true Open Innovation and gives some hints on what your firm should do in order to take the next step.
We are living in a world where Marshall McLuhan and Alvin Toffler said we’d be. Digital technology and the globalization of knowledge have changed everything. The world is an electronic village in which small groups have the power to disrupt the status quo, technological expertise is distributed globally and can be found using Web tools and response times are approaching zero.
This of course changes also the way in which firms innovate. 10 years ago, Henry Chesbrough studied several leading firms and found a “new imperative for creating and profiting from technology”. Now, as we all know, new insights about the nature of the world (in particular the one mentioned above) and new management concepts aren’t picked up everywhere instantly. Like successful innovations, they are picked up in waves. First come the pioneers, then the Early Adopters and the majority and finally the Late Followers. Consequently, one finds that some firms have aligned their innovation management with Chesbrough’s new imperative faster and with more rigor than others.
Today, with more than 730 million hits on Google for the term Open Innovation, almost any firm claims that they are “doing Open Innovation”. True, every firm takes up innovation impulses from its customers or its suppliers, cooperates with research institutes or develops its new products and services jointly with other partners. However, there is a fine line between “Open Innovation” and true Open Innovation. This might at first view look like a fine, subtle difference. But depending on how you look at it, it has far-reaching implications for how your firm innovates.
This article firstly wants to work out the three fundamental differences between “Open Innovation” and true Open Innovation, secondly provide data on the level of true openness and thirdly give you some thoughts on how your firm could move to true Open Innovation.
Fundamental difference number one: Embedding Today no firm innovates in a completely closed mode. In the last 10 years, quite a number of firms also tried and tested new open approaches to innovation that are enabled by a globally networked infrastructure. They:
posted their requests for technological expertise on Open Innovation marketplaces such as NineSigma, InnoCentive or yet2.com,
ran global campaigns for attracting business and technological ideas around megatrends such as “green business” or “smart grids”,
conducted consumer crowdsourcing contests on platforms such as Atizo and/or
ran consumer crowdsourcing campaigns on their own.
These activities – and a number of others (see an in-depth article from innovation-3′s Frank Mattes here) are open approaches to innovation. But if you look closer, in many firms these kinds of activities are not fully embedded in the firm’s innovation management approach.
Strategically embedded Open Innovation True Open Innovation is embedded into the innovation strategy. The question is not “To be open or not be open”, to paraphrase William Shakespeare, for two reasons: Firstly, as stated above, any firm is already innovating openly to a lesser or a larger extent and secondly true Open Innovation is a deliberate choice.
A true open innovation strategy
starts with taking external impulses to translate megatrends into roadmaps and R&D pipelines,
takes a hard and unbiased look at current and future core competences and asks: “On a global scale, given that most of the smart people are not working for us: What exactly should we focus on?”,
thoroughly analyzes technologies, business fields and processes to pinpoint where exactly innovations should be done in a closed mode and where it should be done openly,
clarifies, after all fields for open innovation have been defined, which open approach to innovation (see above) are the most suitable ones and, most of all,
is not a one-time effort but a continuous process that is repeated at least once per year.
Organizationally embedded Open Innovation In many firms, open approaches to innovation are driven by a group of open, entrepreneurial people. These people have a desire to work with the best and most brilliant and to pull in a lot of external ideas in order to have a multitude of options to choose from. But in most of the firms, openness is not woven into the organizational fabric of the whole firm.
A firm that does true Open Innovation builds on carefully balanced central and decentral organizational structures to make sure that openness in innovation is fully embedded. Typically, the roles of a “Open Innovation center” include:
Interconnect existing networks inside the firm
Management of externally facing innovation portals
External Marketing of Open Innovation to win the best co-innovators
Search for cross-divisional “Game Changers”
Lead the internal Community Of Excellence
This center ties in with the decentral innovation units that are responsible for running the relevant innovation agenda and identify (open) innovation White Spaces.
Culturally embedded Open Innovation At the end of the day, innovation is a people business and so is Open Innovation. Yet, in many firms an open mindset is not pervasive and can be found only in some isolated Business Units.
True Open Innovation starts with an open mindset and an opportunity-based mindset. True Open Innovation is part of the corporate culture and present in all formal and informal cultural traits, e.g. in the metrics that are applied to measure superior performance, in the leadership style, in talent development processes and in the communication style.
Fundamental difference number two: Proactivity A Member of the Board of one of my clients recently commented tauntingly on the Open Innovation activities at one of his Business Units: “To them, Open Innovation is like Christmas. It’s a welcome, once-per-year exception to the day-to-day innovation business.” While this statement may be a little bit exaggerated it reflects in some respect the way in which Open Innovation is seen in many firms.
Quite a number of firms turn to open approaches to innovation when answers to technological challenges can’t be found inside the firm or in the circle of trusted innovation partners or when they want to have a big heap of new consumer insights once per year to have some food for innovation thought.
There is nothing wrong with this way of seeing openness in innovation. True Open Innovation however has a proactive mindset. This proactive mindset manifests in the planning processes. Firms that conduct “Open Innovation” plan their roadmaps and R&D projects, allocate budgets and when R&D projects run into difficulties they turn to Open Innovation.
On the other hand, firms that are doing true Open Innovation start the planning process with an opportunity-based thinking. The key question is, “How much can we leverage our existing innovation manpower?” In the planning process, this wide option space is then explored and then turned into roadmaps and R&D projects. As an effect, the innovation volume that can be moved through the funnel is larger than if one sees openness in innovation only as a sort of last resort respectively a once-per-year exercise.
Fundamental difference number three: The rigor in pursuing openness “The usual suspects” is not just the title of a successful Hollywood movie from 1995, it is also how many firms look at the global base of potential co-innovators. Quite often, openness in innovation is done within a relatively stable set of trusted external innovation partners.
There is nothing wrong with this way of seeing openness in innovation. But no matter how large your firm is more than 99% of the relevant smart people do not work for it.
Consequently, true Open Innovation has the ambition to extend the firm’s innovation ecosystem as far as it makes sense. True Open Innovation has the hunt for finding new potential innovation partners in its DNA. To achieve this, the firm communicates proactively its innovation wants and needs (after these have been defined in the strategic context, see above), uses its innovation partners as hubs for attracting even more innovation partners and communicates actively in all relevant channels success stories that demonstrate why it is the best destination for all relevant companies that might be interested in a win/win collaborative innovation.
The data behind In late 2011, Forrester conducted an open innovation study with 229 Open Innovation stakeholders via a web-based survey and via thirteen indepth phone interviews with senior Open Innovation executives. A wide variety of industries were represented, including the public sector and government, with no single industry accounting for more than 12% of the total sample. By design, the survey was targeted at large organizations. Survey respondents included director/manager roles (69%) and executive/department head/VP roles (31%). Geographically, the study focused on the US (58% of participants), Germany (23%) and the UK (19%).
Forrester was interested in understanding how these Open Innovation stakeholders define Open Innovation, how and why they are investing in Open Innovation, how they measure success and how they drive the move from “Open Innovation” to true Open Innovation.
With such a broad scope it is not surveying that the study produced a number of interesting insights. One of these is supporting the thesis that actually Enterprise 2.0 and Open Innovation are becoming one:
Almost two thirds of the firms see “social collaboration initiatives” as part of Open Innovation
Even more interesting is that with a rate of agreement at around 60% firms are saying that they not only invest in Open Innovation “to solve business challenges that we can’t solve internally” but also “to foster more collaboration internally”.
To assess where firms are standing on their journey from “Open Innovation” to true Open Innovation, Forrester used an Open Innovation maturity model with four stages:
Stage I: Experimentation. This stage is characterized by initiatives driven by single Business Units, by a project-based resource allocation and by pilot runs with selected new open approaches to innovation. According to Forrester, 60% of firms are in this stage.
Stage II: Commitment. The second stage is achieved, when there is a CxO support for Open Innovation, formal resources are reserved for Open Innovation, the first steps towards organizational embedding are taken and preliminary cost-benefit analyses are done. Forrester estimates that 30% of firms are in this stage.
Stage III: Sustainable state. This stage is characterized by a CxO mandate for Open Innovation, significant formal resources allocated to Open Innovation, solid cost-benefit analyses in place and continuous use of new open approaches to innovation. According to Forrester, 9% of firms have achieved this stage.
Stage IV: Full integration. Forrester and the experts of the innovation-3 network characterize the final stage of Open Innovation maturity by the traits of stage III plus cultural embedding of Open Innovation, well-defined and well-managed innovation networks, seamless integration of Enterprise 2.0 and Open Innovation and Shareholder Value justification of the investment in Open Innovation. According to Forrester, maximal 1% of the firms are in this stage.
What your firm should do Now, if you agree with the theses presented in this article, what should you do?
According to the statistics, your firm is most likely in the Experimentation or the Commitment phase. If this is the case, your firm should
Carefully decide which new open approaches to innovation add value,
Start embedding Open Innovation into the innovation strategy process
Design or refine the organizational embedding
Define or refine the approaches to measure the impact of openness in innovation
Doing so would help your firm in moving from “Open Innovation” to true Open Innovation and put it in a top spot for innovation leadership.
image credit: apartmentguide.com
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Frank has 15+ years of consulting experience in innovation management. He worked for The Boston Consulting Group and for specialized consulting companies. Frank founded and manages the innovation catalyst innovation-3. innovation-3′s mission is to help leading firms to win in the third generation of innovation management, which will be shaped by Open Collaborative Innovation and Social Networks.
Identification is the Core of Innovation Posted on October 11, 2012 by Paul Hobcraft
There are so many aspects to get right in innovation. These can be ensuring the culture, climate and environment for innovation are working well, it could mean setting up processes, well-designed procedures and structures, it can be providing innovation governance. Each part has a vital part to play in being combined for innovation, so it can function but these are not the core. Our identification with innovation is that core.
The core lies in the scope and definitions, the context that innovation is set and the identification with these. How often do organizations fail because they rushed into innovation, along those classic lines of: “let’s experiment and learn as we go” as their mentality. We fail because we don’t take the necessary time to examine the significant differences in innovation terminology, in the different ways or types of innovation, in gaining from ‘evidence based’ research and experimentation. What we expect to see from our day-to-day work seems not to apply to our innovation selection criteria. We experiment indiscriminately, poking a stick around the opportunity haystack looking for that elusive ‘golden’ needle.
Random selection and discarding practices
Organizations have been randomly selecting, then discarding practices constantly, in a never-ending search of more of other organizations best practices, without understanding what these truly entail, or what this truly requires in commitment. No wonder innovation continues to receive a bad ‘rap’ when you often have the innovation blind, leading the blind. There are so many facets within innovation that need a much deeper, extensive understanding that is so often lacking. We love to collect or synthesise and then quickly dismiss what doesn’t work, dispensing with some valuable utility on the way, as we move onto the next ‘complete’ package. Then the cycle repeats itself, perhaps not immediately but in its quiet eroding way that throws innovation even more into question and doubt.
Lost identities, lost opportunities
We have lost our identification, yet this one word strikes at the core of innovation as the essential to have. Everything we do should have an overly binding context to it. If we don’t place innovation within its appropriate framework we fail to contextualize our activities, the intended fit, which offers the real relationship we need. We need to fit our work to the strategic goals. If this is simply missing then innovation is likely misfiring, or not hitting the targets because it is scatter-gun in approach and its interpretation.
Innovation cries out for an integrated innovation framework.
Offering an integrated innovation framework is the place where we can gain the necessary identification. It is central to what we should be doing; it establishes the boundaries within which innovation should take place. This is the one essential place for leadership engagement. If
innovation is never placed in its context, then how do we expect the results often asked for by the CEO? Innovation is adrift, it is actually unsupported, and we don’t achieve that precious identification.
If we don’t have provided that innovation framework, we leap into innovation, often in good faith, as asked, so we become often hyper-active as we all find our own ways forward. Eventually we stumble along and finally work out our own language and understanding of what innovation means, different to even the persons sitting at the next desk. Just take a look at all the different definitions of innovation you will find, just in one large organization alone. This lack of a clear context is so harmful we add further unnecessary complexity and over time frustrate the organization and confuse the majority.
People disconnect because they lack what is needed to connect! They continue to work hard, often very hard, but sometimes never truly understanding how their tasks and roles contribute to the strategic direction. We need to make sure each person makes their specific connections to an integrated approach for themselves. To achieve these connections you need a shared understanding, a common framework and a common language, to reduce the mental traps and misunderstandings of what innovation is individually meaning. We need everyone to try to get onto the same page.
Educating formulates the understanding
Educating, informing, clarifying constantly simply helps formulate understanding and aids execution. We need to find ways to communicate a common language, a common way to frame the needs expected from innovation. That needs to come from the top of organizations and then built up by a growing contribution from all as they become engaged. If you can achieve this, you can move to a growing consensus but this takes time. You can eventually achieve a common identity that begins to move ‘mountains’ through collective achievement, that is both distinctive and unique to your organization. A uniqueness that can never be copied, perhaps just admired or envied.
CEO’s that are seen to be successful achieve connections, what is often called that emotional connection through describing the context, setting the values and vision driven criteria and by often pushing the organization towards ‘impossible goals’. It is amazing how this brings alignment as long as it is consistent, constant in its messages and widely shared and understood. Then the leadership makes it their business to position individuals and the decisions over what, where, when and how in the context of this, to allow them to make their decisions, as individuals and within their teams. Innovation activity becomes ‘orchestrated’ not micro-managed.
The value of the middle makes for the new connectors we need.
Middle managers tasks should be increasingly become more those of connectors and facilitators, not the guardians and gatekeepers for the decision makers. Their work should include the encouragement that everyone is engaged in innovation work, for each person to constantly go back and check against this integrated innovation framework to work out their place to relate to this and become aligned. The middle manager carries through connection and identification.
Through this new work they achieve this ‘shared understanding’ or set about correcting any areas of concern through their own dialogues with senior managers of where any shifts have taken place or seem in conflict with the understanding. This is identification again, for it lies at the core of innovation. Making sure everyone has a ‘sight-line’ and identification into this innovation framework so they stay well-connected. Communication and relationships becomes the key.
Today we are living in a world of knowledge-intensive innovation
To build distinctive competences for sustaining those often elusive competitive advantages, is very much context specific. We need to provide learning events as competence is actually firmly embedded in the specific context in which it is created. If an organization lacks that context of innovation then how can it acquire the appropriate knowledge to give it any advantage? If the CEO and his leadership team can’t articulate the context, then they can’t expect winning at the innovation game. It is not their people failing to deliver innovation, it is them, as leaders, failing to deliver this integrated innovation framework where context sits and identification is gained to seek out knowledge-specifics needed.
Until the CEO identifies with his core role in innovation, the organization remains rudderless. If he can’t supply what is expected, then it is more than likely the corporate strategy will be ignored, as it has not been placed in its appropriate context. It fails because it is not communicate in ways that can be understood, it lacks personal identification.
Without the appropriate identification of the opportunities seen for growth not communicated then how can the right innovation be applied? Innovation stays disconnected to strategy. It is arbitrary based on interpretation and choice designated down the organization hoping it aligns. Context set in a clear framework for innovation changes that. It gives innovation a real chance to contribute.
Boundaries and Freedom
How we harness our innovation activity does not need the advocating of tighter controls, it needs articulating the potential and releasing people by underpinning how that will be managed through innovations organization. Ideally this can come through having a clear governance structure and providing the right environment that is needed, so as to allow others to do the work that needs to get done and see how they contribute in meaningful ways. Management’s dictates or rules should not stand in the way, they should be swept aside. What should be put in that critical space is a common set of agreed organization definitions, a real clarity made up of what connects and why and then ensuring the resources are made available to achieve the innovation ‘called for’. This calls for a focused yet adaptive and flexible leadership, that constantly looks to engage and provides the clarity necessary within a corporate innovation framework that can cascade down the organization. Leaders need to
actively ensure through clear designation that everything is in place for all the appropriate conversations, and is equally ready and listening to the new ‘pulse’ of innovation, they are generating from this new intensity of focus.
Identification becomes the core to innovation
Eventually with enough of this leadership engagement, constantly being articulated and framed for the challenges identified, there emerges a common consensus and organizational language around innovation and its intent. It connects and gains both organization and personal identification and this ‘identification’ sits at the core of innovation.
We get closer to achieving a consistent, more vibrant innovation as it becomes more routine and embedded, for it becomes increasingly linked to everyone’s goals, a certain oneness and because of this, it is sustaining. We identify as we understand what our contribution will be, then the leadership has done its primary job, its aligned innovation purpose to the goals, by laying out the parameters to achieve this.
image credit: 365voice.com
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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.
Navigating an Ocean of Big Data Posted on October 15, 2012 by Melba Kurman
It’s good to be back blogging! I’ve been buried for the past month finishing a book I’m co-authoring on 3D printing (called Fabricated — it’s due out in February because it takes the publisher 3 months(!) to format an ebook). Also in production, an SBIR commercialization plan for a tech startup (data analytics software) in Boston. I can’t say enough good things about the SBIR program and the process of applying for Round I and Round II funds. But more about that later.
For the Commercialization plan, I’ve been doing research on Big Data. Big data is the new natural resource. Here’s some interesting facts:
The amount of new data created in the past twelve months alone would fill up 57 billion Apple iPads (according to IDC)
Each year, the amount of data generated, worldwide, will increase 40%
The human mind isn’t equipped to handle more than about seven pieces of information at once (this was calculated by researcher George Miller in a 1956 article in Psychological Review)
By now most, nearly everyone has heard of “Big Data.” Yet, there’s no real formal definition, no benchmark. Instead, Big Data is a concept, a situation where the size of digital information is beyond the capacity of today’s software tools to readily capture, store and analyze. What constitutes Big Data means different things to different people and different industries, obviously.
A useful way to think about a data situation is to consider the 3 V’s: volume, velocity and variety. In terms of structure, datasets are categorized into two broad categories: structured (databases, tablular data) and unstructured (unformed datasets from sensors or digital media).
Market research firm, TDWI (“Big Data Analytics,” 4th Quarter, 2011) surveyed 325 professionals in several industries. Ironically, most of the people in organizations who “own” the company’s data are the people in the IT department that manage the technology, not the people setting strategy. Only 21% of the respondents said that their individual department was the primary owner of their data.
There are several reasons for this. Current data analytics tools aren’t easy for non-quants to use. Today’s tools are geared to make sense of structured data pulled from a database. Frequently, available data tools are custom-built and their use and configuration (creating reports) is overseen by people who manage the database.
There is a vast unaddressed market for analytical tools that can make sense of unstructured data. Sensor data, massive digital files, GPS data will continue to grow in volume, velocity and variety. In fact, I predict that the value and volume, probably velocity also of unstructured data will soon surpass that of structured data. Yet, aside from sophisticated facial recognition software or primitive tools to manage digital media, massive reams of unstructured data remain buried out of our analytical reach.
Where is all this data — structured and unstructured — coming from? Well, everywhere. Mobile phones, internet clicks. An estimated 60% of the world’s population has a cell phone that’s constantly streaming data back to its network provider.
Each time you pay for something at the grocery store, you just contributed to the world’s store of Big Data. Cars and machines have tiny sensors built into them which collect a steady stream of raw unstructured data (unstructured data means it’s not captured in a nice tidy table or spreadsheet — it’s simply reams of numbers or text). The medical profession racks up massive data files in the form of medical images or realtime video feeds generated during a surgery.
In daily life, most of us experience Big Data analysis in action when we’re buying something. Retailers are among the top industries eagerly collecting and trying to gain insight from customer data. Grocery stores lure customers with discount store cards, but I personally don’t like making it easy for my grocery store to track my purchases. That’s why I don’t have a store savings card.
In the past, I would innocently sign up for a store card and then a few weeks later would start getting coupons in the mail for some product that apparently fit in with my buying patterns. Retailers call this the “Next Best Offer.” Speaking of untapped markets, there are good opportunities for an analytical tool that would help retailers improve the precision of their NBOs by analyzing point-of-sale (POS) data and making good suggestions (including setting the right price) on the spot.
The faster and more precisely a retailer can offer a customer targeted NBOs,” the more goods that retailer will sell (at least in theory). Sometimes retailers’ efforts can be amusing. For example, I like old movies — the singing and dancing kind from the 1930s and 1940s. I can’t prove this, but after we bought a Roku and I started happily watching old musicals on streaming Netflix, I started getting flyers in the mail selling me a particular retirement homes or Golden Vacations. I’m still a few years away from that phase of life. But… I suppose that guessing a person’s age based on the movies they like is not a completely unreasonable way to target a particular market.
I quit Facebook for the same reason I don’t get store cards or give Google my cell phone number (although it asks me on a nearly daily basis). In the long run, though, I suspect my efforts to limit my presence on the Big Data Grid are futile. Eventually I may just give in and let “Them” collect all the data they want. A friend of mine likes to give random middle initials to companies to see which one sold her out when the flyers, robot-calls and emails start coming.
Retailers are active users of data analytics. But in terms of volume and velocity, the financial services industry handles the most data per employee. Wall Street firms on average, wrestle with the (nearly real-time) data byproducts of half a trillion stock trades a month. However, if you calculate industry data load by total data (not by employee), according to estimates from McKinsey,(1) discrete manufacturing is number one. Government is second and communications/media third.
Manufacturing companies do a lot of quantitative, data-intensive R&D. Managing a supply chain and inventory kicks up a lot of data. The one advantage that manufacturing firms have is that much of the manufacturing process has been automated for several decades now. However, the industry’s existing software was built for a previous era, when data flowed more slowly and was mostly simple numbers or letters.
The next most data-intensive industry is our government. The government collects tax data, tracks passports, residential tax assessments, marriage certificates and so on. On the one hand, having our government collect and make sense of all this data could be a good thing (if all this data is used to create intelligent policy). On the other hand, it could be a threat to civil liberties if the government abused its power to closely monitor and track innocent citizens.
After the manufacturing and government industries are the communications and media industries which deal with enormous pools of digital media data. These data stores are unstructured and massive. Digital information in this format can’t be captured in tidy rows and columns. It doesn’t correlate to alphanumeric codes or characters. Instead, media data oversees the generation of sound waves and visual information.
One my first jobs was in a company’s Media Archive. In those creaky old days, most of the media we were given was on CDs or DVDs (and a few on VHS — yikes). Our job in the Media Archive was to upload those massive files into an image storage database and then log their identifying information into a sort of library catalog. Even back then our data storage systems were staggering under the weight of those CDs and DVDs and we were logging in just a few each week.
My co-workers and I would click “upload” and then sit frozen, praying for the system not to crash. Periodically you would hear somebody howl in frustration. This meant a computer had buckled in mid-upload and its hapless user would have to start the whole process over. I know computing power and the quality of compression algorithms has improved, but I can’t image how organizations are managing to keep track of all the digital media they’re creating.
The world needs analytical tools that can make sense of unstructured data. Another open market is for analytical tools that can provide meaningful insight into data in real time.
Traditional spreadsheets can’t do real time analysis. Nor can custom-built reports that connect to a legacy enterprise database. Old-school static legacy analytics tools can only provide so much insight at a time. They can’t iterate results fast enough in situations where data flows in like a firehose.
The promise for real-time analysis lies in the new generation of analytical tools, software built on research in artificial intelligence and machine learning. Most low-cost data tools today offer numerical models using a “best fit” approach using linear regression. We’re so used to the limitation of today’s tools that it seems like fantasy to imagine a world where it’s possible to quickly and intelligently react to in-flowing data.
Sure, it’s possible to load data quickly into an Oracle or SAP database. But then what? True, if you have the computing power and bandwidth and mathematical/programming ability (which most of us don’t), you could probably create a 3D model of a hypothetical situation in a digital environment. However, even a sophisticated simulation tool can only go so far.
If people could extract insight from data very quickly, this would change the way we live and work. Medical data could be instantly analyzed could save lives or to tailor a Personalized Medicine regimen for people. People working in dangerous conditions could monitor their environment and react the instant a threat appears. Medical devices would react in response to changes in a person’s vital signs. Manufacturers could quickly fabricate custom products in response to real-time data streams. Engineers could quickly calculate the best way to distribute power resources when a massive snowstorm knocks out the power in DC, or a drought in the mid-west causes people there to crank up their air conditioning.
Someday, there will be powerful low-cost tools that can quickly crunch through all types of datasets. These tools will provide useful insight and will be easy for regular people to use. Increasingly, the raw data is available. We’re just yet able to quickly make sense of it.
(1) (“Big data: The next frontier for innovation, competition, and productivity,” McKinsey Report, June, 2011).
image credit: siliconrepublic.com
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Melba Kurman writes and speaks about innovative tech transfer from university research labs to the commercial marketplace. Melba is the president of Triple Helix Innovation, a consulting firm dedicated to improving innovation partnerships between companies and universities.
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