Creative skills, dynamic capabilities and continuous innovation How to move innovation to the core business
Pablo Muùoz (MBA/MBA/PhDŠ) Postgraduate Director - School of Communications, Universidad del Desarrollo Prepared for: CPSI Conference, jun 09 domingo 21 de junio de 2009
Universidad del Desarrollo
about continuous innovation 5w & 1h
what why where who when how domingo 21 de junio de 2009
non systemic
exceptional
discontinuous
creativity
systemic
routines
continuous
innovation
Pablo Muùoz (MBA/MBM/PhDŠ)
Postgraduate Director and professor - School of Communications, Universidad del Desarrollo Researcher in creativity and innovation Upcoming: 4 years at the Centre for Knowledge, Innovation, Technology and Enterprise (KITE) Newcastle University, UK researching human skills, knowledge creation, learning systems, creativity and continuous innovation.
about me
domingo 21 de junio de 2009
how to move innovation to the core business?
domingo 21 de junio de 2009
how to move innovation to the core business? my proposal increasing adaptive skills*: individual group organization
developing a systemic innovativeness capability based on: knowledge learning creativity dynamism
*ability to adjust to new conditions domingo 21 de junio de 2009
/agenda 1. Is there any formula for innovation 2. Four facts (3+1) - how can I do it? 3. Innovativeness - ability to survive in ever-changing environments 4. Systemic innovativeness capability 5. Dynamic capabilities (definitions and microfoundations) 6. Knowledge and learning 7. Creativity (systemic view, attitude, behavior and routines) 8. A new role for creativity training
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1 domingo 21 de junio de 2009
is there any formula for innovation?
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is there any formula for innovation? domingo 21 de junio de 2009
is there any formula for innovation? domingo 21 de junio de 2009
research indicates that innovation is related to emergent processes driven by knowledge creation, organizational learning and creativity; these processes should be sustained by organizational structures and work flows based on innovative behaviors. (Pablo Mu単oz, based on the work of Jorna, Nonaka, Teece and Winter)
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2 domingo 21 de junio de 2009
Four (3+1) facts
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innovation
Economic innovation is: 1. The introduction of a new good 2. The introduction of a new method of production 3. The opening of a new market 4. The conquest of a new source of supply of raw materials or half-manufactured goods 5. The carrying out of the new organization of any industry Joseph Schumpeter, The Theory of Economic Development, 1934, Harvard University Press
domingo 21 de junio de 2009
innovation
"Innovation . . . is generally understood as the successful introduction of a new thing or method . . . Innovation is the embodiment, combination, or synthesis of knowledge in original, relevant, valued new products, processes, or services�. Luecke and Katz, 2003
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innovation
the only place to look for innovation is in the past... domingo 21 de junio de 2009
NO ONE could have said on october 22, 2001: “This is an innovation�
Lau nch Oc ed tob er 2 on 3, 2 001
domingo 21 de junio de 2009
no keyboard
NO ONE could say today: “This is an innovation” domingo 21 de junio de 2009
The changing nature of innovation
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“innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meets untapped customer demands� Sam Pamisano. CEO IBM
...there is an emerging recognition by managers themselves that the foundations of enterprise success trascend simply being productive at R&D, achieving new product introductions, adpoting best practices and delivering quality products and services domingo 21 de junio de 2009
“Economic forces such as the growing service economy and commoditization of traditional value chains have led many organizations to pursue breakthrough innovations as part of their business strategy”
FROM
TO
Monolithic Invention
Collaborative innovation
Patent based own & protect
Customer value based share & expand
Well defined objectives
Sense and respond to demand
Single discipline
Multiple discipline
Structured, top down
Symbiotic partnership
Passive consumers
Consumers are producers
Specialized, local R&D teams “not invented here”
Everyone is an innovator, best from anywhere Dr. Casimer DeCusatis IBM Corporation Creating, Growing, and Sustaining Efficient Innovation Teams (wp) Innovation Ecosystem Study. IBM Academy of Technology
domingo 21 de junio de 2009
innovation
Four (3+1) facts ! Innovation is an outcome ! The only place to look for innovation is in the past ! The changing nature of innovation ! There’s no formula for innovation domingo 21 de junio de 2009
At present, innovation is seen as a panacea for modern society’s social, technical and economic ills. Criticisms are alwalys answered with:we have to put more effort into innovation. But are we really dealing here with a cure-all or should our approach be more differentiated? Jorna (2006) Sustainable Innovation: the organisation, human and knowledge dimension
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great, how can I do it?
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3 domingo 21 de junio de 2009
innovativeness
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innovativeness
“Innovativeness captures the firm level orientation toward innovation ... Innovativeness is the firm’s inclination to engage in innovative behaviors based on the normal ways of doing things in the firm� Akwei, Peppard, Hughes. The Process of Creating Dynamic Capabilities British Journal of Management domingo 21 de junio de 2009
innovativeness
what is this all about? domingo 21 de junio de 2009
innovativeness
innovation to the core domingo 21 de junio de 2009
innovativeness
why innovation to the core? domingo 21 de junio de 2009
because changes happen
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let’s think for a moment
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Disney and Sony (respectively) produce y launch one new product every _________?
Three minutes for Disney. Twentie minutes for Sony. Elizabeth Debold, What is Enlightenment?, March-May 2005 domingo 21 de junio de 2009
The new IBM’s corporate strategy was developed by _________ people?
319.000, every IBM’s workers... around the world domingo 21 de junio de 2009
The areas of study of the fast growing university in United Kingdom are _________?
Biosciencie Energy Innovation y knowledge management Environment Manufacture Security and defense Aerospace technology Automotive technology Source: Cranfield University domingo 21 de junio de 2009
The top 10 in-demand jobs in 2012 didn´t exist in _________?
2004
Organic food producers, retailers Computational biologists Parallel programmers Data technologists Simulation engineers Boomer companions caretakers Genetic counseling Brain analysts Space tour guide Robot builder, tenders Source: MSNBC,The Future of Business domingo 21 de junio de 2009
The top 10 in-demand jobs in 2012 didn´t exist in 2004
and probably, the top 10 companies in 2012 didn’t exist in 2004 domingo 21 de junio de 2009
The top 10 in-demand jobs in 2012 didn´t exist in 2004
We are currently preparing students for jobs that don´t yet exist, using technologies that haven´t been invented, in order to solve problems we don´t even know are problems yet. The most important thing a student can do today is learn to learn (Karl Fisch, Educator; Richard Riley, US ex Secretary of Education) domingo 21 de junio de 2009
innovativeness In order to increase companies’ abilities to survive in changing environments:
How may one create an innovativeness ecosystem? what could be the role of creativity in this process?
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4 domingo 21 de junio de 2009
innovativeness
developing a systemic innovativeness capability ES I T I
IV T AC
ACQUISITION
AC TIV
COLLABORATION
N DY
IC
AM
ITI
ES
CA
PA B
LEARNING
ILIT
PROCESSES TOOLS
IES
CREATIVITY CONTINUOUS INNOVATION
PEOPLE SKILLS
CULTURE VALUES
KNOWLEDGE
DY N
AM
HUMAN RESOURCES
AC T
IVI
Source: Pablo Mu単oz domingo 21 de junio de 2009
TIE
S
IC
IE T I IL
C
AB P A
KNOWLEDGE MANAGEMENT
S INHOUSE INNOVATION
T C A
I
ES I T VI
innovativeness
developing a systemic innovativeness capability
Leadership and organization: Company leaders and values: Collaborative, open culture and and organization aligned around a common vision Culture incentives that reward challenging the status quo. of innovation. People and skills: Disciplined approach to building HR activities: Recruitment, people development and training (ideas, skills, knowledge, expertise and innovation capabilities across organization. processes) Dynamic Capabilities: the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments (sense, shape and transform)
Learning system and knowledge management: processes of acquiring, capturing, sharing and using productive knowledge (spiral of knowledge)
In house innovation activities: business scope (RD/RT/NPD), structural and organizational innovation.
Processes and tools: Systematic approach and supporting tools to enable idea generation, pipeline and portafolio management.
Collaboration activities: strategic alliances, research partnership, external networking.
Acquisition activities: search, evaluation and integration of new knowledge and new technology
Source: Pablo MuĂąoz domingo 21 de junio de 2009
innovativeness
developing a systemic innovativeness capability ES I T I
IV T AC
ACQUISITION
AC TIV
COLLABORATION
N DY
IC
AM
ITI
ES
CA
PA B
LEARNING
ILIT
PROCESSES TOOLS
IES
CREATIVITY CONTINUOUS INNOVATION
PEOPLE SKILLS
CULTURE VALUES
KNOWLEDGE
DY N
AM
HUMAN RESOURCES
AC T
IVI
Source: Pablo Mu単oz domingo 21 de junio de 2009
TIE
S
IC
IE T I IL
C
AB P A
KNOWLEDGE MANAGEMENT
S INHOUSE INNOVATION
T C A
I
ES I T VI
innovativeness
acceleration, dynamism & competitiveness
In ever changing environments, innovativeness helps to develop structural and organizational’s skills, knowledge and capabilities, adding dynamism to business performance. domingo 21 de junio de 2009
innovativeness
acceleration, dynamism & competitiveness
These capabilities accelerate organizational learning processes, transformation and business adaptability. domingo 21 de junio de 2009
innovativeness
acceleration, dynamism & competitiveness
“Capabilities are complex bundles of skills and accumulated knowledge, exercised through firm processes that enable firms to coordinate activities and make use of their assets� Source: Akewi, Peppard, Hughes (2007) The process of creating dynamic capabilities. British Journal of Management.
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innovativeness
acceleration, dynamism & competitiveness
The paradox of organizational capabilities Path dependency and lock-in Structural inertia Extreme commitment
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innovativeness
acceleration, dynamism & competitiveness
“The critical focus is on the inability of organizations to change their familiar ways of doing when confronted with new developments.This inherent tendency to inertia forms the very basis of the recent capability debate resulting in the call for dynamic capabilities ... The emphasis has shifted to the ability to change and quickly develop new organizational capabilities as a critical prerequisite for sustaining advantagesâ€? Source: SchreyĂśgg, Kliesch-Eber (2007) How Dynamic can organizational capabilities be?. Strategic Management Journal domingo 21 de junio de 2009
innovativeness
acceleration, dynamism & competitiveness
One should recognize three types of capabilities: • Capabilities to be different and better than the competitors • Capabilities to sense, shape and seize opportunities and new challenges • Capabilities to transformar the normal ways of doing things domingo 21 de junio de 2009
5 domingo 21 de junio de 2009
innovativeness dynamic capabilities
David J Teece; Gary Pisano
Dynamic capabilities are defined as the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments
Constance E. Helfast
Creating, adapting to, and exploiting change is inherently entrepreneurial.To survive and prosper under conditions of change, firms must develop the “dynamic capabilities� to create, extend, and modify the ways in which they operate
Sidney G. Winter
Dynamic capabilites are those capabilities that operate to extend, modify or create ordinary capabilities
Cynthia Akwei; A set of learned behaviors, which are fully or partially repeated resulting partly form tacit Joe Peppard; Paul knowledge, specific organisation objectives, combination of resources and activities which Hughes brings about change
domingo 21 de junio de 2009
innovativeness dynamic capabilities
Dynamic Capabilities enable business enterprises to create, deploy and protect the intangible assets that support superior long-run business performance. Dynamic Capabilities include difficult to replicate enterprise capabilities required to adapt to changing customer and technological opportunities. They also embrace the enterprise’s capacity to shape the ecosystem it occupies, develop new products and processes, and design and implement viable business models. Source: David J Teece (2007) Explicating Dynamic Capabilities:The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal domingo 21 de junio de 2009
innovativeness
dynamic capabilities: microfoundations
Microfoundations: Distinct skills, processes, procedures, organizational structures, decision rules and discplines which undergrid enterprise-level sensing, seizing and reconfiguring capacities Source: David J Teece (2007) Explicating Dynamic Capabilities:The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal domingo 21 de junio de 2009
innovativeness
dynamic capabilities: microfoundations
SENSING
Processes to direct internal R&D and select new technologies
Processes to tap developments in exogenous science and technology
ANALYTICAL SYSTEMS (AND INDIVIDUAL CAPACITIES) TO LEARN AND TO SENSE, FILTER, SHAPE, AND CALIBRATE OPPORTUNITIES
Processes to tap supplier and complementor innovation
Processes to identify target market segments, changing customer needs and customer innovation
SEIZING
Delineating the customer solution and the BM 1. Selecting tech and product architecture 2. Designing revenue architecture 3. Selecting target customers 4. Designing mechanisms to capture value
Selecting enterprise boundaries to manage complements and control platforms 1. Calibrating asset specificity 2. Controlling bottleneck assets 3. Assessing appropiability 4. Recongnizing, managing, capturing coespecialization economies
ENTERPRISE STRUCTURES, PROCEDURES, DESIGNS AND INICIATIVES FOR SEIZING OPPORTUNITIES
Selecting decision-making protocols 1. Recognizing inflexion points and complementaries 2. Avoiding decisions errors and anticanibalization proclivities
Building loyalty and commitment 1. Demostrating leadership 2. Effectively communicating 3. Recognizing noneconomic factors, values and culture
MANAGING / TRANSFORMING
Decentralization and near decomposability 1. Adopting loosely coupled structures 2. Embracing open innovation 3. Devloping integration and coordination skills
Cospecialization 1. Managing strategic fit so that asset combination are value enhancing
CONTINUOUS ALIGNMENT AND REALIGNMENT OF SPECIFIC TANGIBLE AND INTANGIBLE ASSETS
Governance 1. Achieving incentive alignment 2. Minimizing agency issues 3. Checking strategic malfeasance 4. Blocking rent dissipation
Knowledge management 1. Learning 2. Knowledge transfer 3. Know-how integration 4. Achieving know-how and intellectual property
Source: David J Teece (2007) Explicating Dynamic Capabilities:The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal domingo 21 de junio de 2009
innovativeness
dynamic capabilities: microfoundations
SENSING
SEIZING
MANAGING/TRANSFORMING
ANALYTICAL SYSTEMS (AND INDIVIDUAL CAPACITIES) TO LEARN AND TO SENSE, FILTER, SHAPE, AND CALIBRATE OPPORTUNITIES
ENTERPRISE STRUCTURES, PROCEDURES, DESIGNS AND INICIATIVES FOR SEIZING OPPORTUNITIES
CONTINUOUS ALIGNMENT AND REALIGNMENT OF SPECIFIC TANGIBLE AND INTANGIBLE ASSETS
Processes to direct internal R&D and Delineating the customer solution and select new technologies the BM
Decentralization and near decomposability
Processes to tap developments in exogenous science and technology
Selecting enterprise boundaries to manage complements and control platforms
Cospecialization
Processes to tap supplier and complementor innovation
Selecting decision-making protocols
Governance
Processes to identify target market segments, changing customer needs and customer innovation
Building loyalty and commitment
Knowledge management
Source: David J Teece (2007) Explicating Dynamic Capabilities:The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal domingo 21 de junio de 2009
6 domingo 21 de junio de 2009
learning & knowledge
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learning & knowledge a story of the industrial era
RED BLUE GREEN YELLOW ORANGE GREY BROWN BLACK GREEN RED BLUE YELLOW BLACK BLUE YELLOW GREY ORANGE GREY BLUE GREY BROWN BLACK RED GREY RED YELLOW BLACK GREEN BLUE GREEN domingo 21 de junio de 2009
Creative Change Management William Bridges domingo 21 de junio de 2009
engine movement (learning)
wind (information)
energy (knowledge)
learning & knowledge domingo 21 de junio de 2009
knowledge Nonaka's spiral of knowledge
The creation of knowledge is a continuous process of dynamic interactions between tacit and explicit knowledge.The four modes of knowledge conversion interact in the spiral of knowledge creation. The spiral becomes larger in scale as it moves up through organizational levels, and can trigger new spirals of knowledge creation. Nonaka (2000) The knowledge Creating Company. HBR domingo 21 de junio de 2009
knowledge Nonaka's spiral of knowledge
Dialogue
TACIT
Socialization Sharing experiences Brainstorming without criticism TACIT Observing Imitationg I
I
I
TACIT Externalization Writing it down Creating metaphors and I analogies EXPLICIT Modeling I G I
Field building
O G
Internalization TACIT Access to codified knowledge Goal based training EXPLICIT
I
G
G
Linking explicit knowledge
O G
G
Combination EXPLICIT Sorting, adding, categorizing Methodology creation Best practices
Learning by doing EXPLICIT Nonaka (2000) The knowledge Creating Company. HBR
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The Knowledge Paradox
engine movement (learning)
Parker Rosell 2003
wind (information) Use knowledge, does not mean consume the knowledge Transfer knowledge, does not imply lose the knowledge The knowledge is abundant, but the ability to use the knowledge is limited The “knowledge “could go out of the office at the end of the day
energy (knowledge)
learning & knowledge domingo 21 de junio de 2009
7 domingo 21 de junio de 2009
innovativeness what about people’s skills
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innovativeness
systemic view of creativity
interaction leads to Person Processes
Creative Leadership
En viro nm en t
adoption leads to Creative product Creative change Change that sticks
Source: Puccio, Murdock, & Mance (2007) Creative Leadership: skills that drive change
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A complex mental state involving beliefs and feelings and values and dispositions to act in certain ways A personal motivational predisposition to respond to persons, situations, or events in a given manner that can, nevertheless, be changed or modified through training as a sort of mental shortcut to decision making.
attitude domingo 21 de junio de 2009
language physiological beliefs
attitude
behavior
Routines are patterns of interactions that represent successful solutions to particular problems.These patterns of interaction are resident in group behavior and certain sub-routines may be resident in individual behavior.
attitude: new routines domingo 21 de junio de 2009
innovativeness effects of creativity training
Divergent Thinking: Creativity training provides the capacity to generate multiple solutions as opposed to the one correct solution (fluency, flexibility, originality, elaboration) Problem Solving: Creativity training provides high-order cognitive processes that require the modulation and control of more routines or fundamental skills (8 core processing operations: problem construction, information gathering, concept search, conceptual combination, idea generation, idea evaluation, implementation planning, action monitoring), used to generate solutions (adhoc or creative) to problems (simple or complex / defined or ill-defined) Group Performance: Creativity training (CPS) provides a framework (process) through which groups members can productively work together to successfully resolve a complex problem Individual’s attitude: Creativity training significantly enhances employees’ attitudes toward active divergence, as well as a tendency to avoid premature convergence. Sources: (1,2) Scott, Leritz, Mumford (2004)The Effectiveness of Creativity Training. Creativity Research Journal (3,4,5) Puccio, Firestein, Coyle, Masucci (2006) A Review of the Effectiveness of CPS Training. Creativity and Innovation Management Journal domingo 21 de junio de 2009
Individual’s attitude: Creativity training enhances behaviors and skills related to performance at work, (such as problem-finding, ideation and idea evaluation,) and has a long-term effect in 3 skill areas: sensitivity to problems, ability to change and the way a person approaches different kinds of problems.
innovativeness effects of creativity training
1. Be concerned with what may happen in the future and deal with the resulting insecurity and uncertainty 2. Identify new and appropriate solutions to problems 3. Develop knowledge-sharing processes 4. Adapt to different contexts by achieving new skills 5. Defer judgement 6. Think outside the box 7. Open up to new experiences 8. Work on low level of inferences 9. Develop curiosity and sensibility 10. Tolerate a high level of ambiguity 11. Perform an empathetic observation 12. Consider uncertainty as a challenge 13. Elaborate good questions 14. Always consider novelty first 15. Self manage 16.Produce changes in it’s own life and some others... domingo 21 de junio de 2009
innovativeness what about people’s skills
creativity accelerates learning and knowledge creation, and facilitate the development of some specific adaptive capabilities that allow companies evolve domingo 21 de junio de 2009
8 domingo 21 de junio de 2009
...but creativity helps sustain business’s competitiveness, adding dynamism to business performance.
Creativity is more important for companies than one may think. It not only helps companies’ employees change their attitude towards divergent thinking in order to come up with new ideas domingo 21 de junio de 2009
we could address our training and consultancy work to other field
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we could move it from the paradigm of industrial economics to the evolutionary theories of economic change
we could help companies, through creativity training, develop a systemic innovativeness capability in order to sustain competitiveness and to survive in ever-changing environments domingo 21 de junio de 2009
/summarizing 1. Is there any formula for innovation 2. Four facts (3+1) - how can I do it? 3. Innovativeness - ability to survive in ever-changing environments 4. Systemic innovativeness capability 5. Dynamic capabilities (definitions and microfoundations) 6. Knowledge and learning 7. Creativity (systemic view, attitude, behavior and routines) 8. A new role for creativity training
domingo 21 de junio de 2009
/finally
“Once companies accept that innovation is a skill that can be taught, they can begin seriously tap into and maximize the latent innovation throughout their organizations� Skarzynski, Gibson 2008. Innovation to the Core, HBP domingo 21 de junio de 2009
Pablo Mu単oz
pablomunoz@udd.cl blog.latercera.com/blog/pmunoz http://issuu.com/pablomunoz/docs/keynotecpsi domingo 21 de junio de 2009
Creative skills, dynamic capabilities and continuous innovation How to move innovation to the core business
Pablo Muùoz (MBA/MBA/PhDŠ) Postgraduate Director - School of Communications, Universidad del Desarrollo Prepared for: CPSI Conference, jun 09 domingo 21 de junio de 2009
Universidad del Desarrollo