I’ve strongly believed when you begin to think through a framework for innovation, see my last article as an example, you also should equally need to recognize the capability framework that you will need to build into this.
Working through these as essential combinations can become the real enabler.
Here is my solution that I think is worth working through, to firstly absorb and then consider for applying to your own innovation building activity. Try it!
I have worked on a formula SCA = II + OC + EE + MLC + RNE for this. I have never published the make-up of this in the public domain before, although I had briefly outlined it in a past post here.
In that post I outlined my thinking and I do not think it needs repeating, does it? So onward…….
The formula is the combination of positive relationships between the following interrelated parts:
Seeking out a working Sustainable Competitive Advantage (SCA)
What do you want to achieve from selecting the expected SCA outcome choices? What do you need to frame as the SCA by using the parts of the formula?
- The extent of market advantage (posses distinctive advantage)
- Competitor’s difficulties to duplicate this, where the unique advantage is often found
- Strategic leadership is prevalent and nurturing and valued
- Understanding “superior” marketplace position (in revenue and cost advantage)
- Creating it, capturing it and keeping it distinctive
- Facilitating, accelerating and sustaining the diffusion process across the organization
- How do you seek relative advantage, achieve compatibility, reduce complexity, encourage trail-ability and ensure observe-ability?
- Advancing the clear “line-of-sight” new business always requires to execute upon.
- Looking to achieve better visibility, flexibility, extending collaborations and advancing concepts through technology and structured approaches.
- Other strategic objectives require distinct capabilities to be built into these 5 groups
Innovation Intensity (II) and the degree of adoption
- The extent of product, process, managerial and business innovation
- A mix of technological and non-technological innovation
- Impact of innovation expected through strategic leadership
- The magnitude of change capacity required through innovation
- The scale of innovation impact desired
- Plotting out the roadmap for innovations evolution
- Exploring the different types of innovation and their potential
- The use of Business Model innovation to change the proposition
- The essential linkage between strategy and innovation outputs and outcomes
- Investment x activity x focus x disruption = return on innovation expectations
Organizational Capabilities (OC) in developing their distinct differences
- New knowledge acquired and embedded, exploring the new contexts and ways
- The ability for value-creating activities to be accumulated, integrated and transferred
- Adaptive learning (leads more to incremental innovation)
- Generative learning (willingness to question long-held assumptions)- favours radical
- Relational learning (collaborative linkage, networking for open innovation)
- Distinctive learning of new knowledge to create added value directly.
- Experimental learning tolerance with new ways of doing things
- Learning from both internal and external knowledge focused positions
- Encouraging co-production of concepts (ideas, components, systems, R& D)
- The ability to also unlearn (long-held assumptions, group-think)
- Structural evaluations into routines, procedures, systems, culture etc
- Releasing latent capabilities- discovery and exploitation- as capital in waiting
- Linking the three capitals- human, structural and relational- for interactive leverage
- Combining complementary assets and dynamic capabilities to configure & reconfigure
- Build the technology skill sets focusing on collaboration
- Encourage techniques for formalization, exploitation and generation
- The value of Absorptive Capacity in acquisition, assimilation, transformation and exploitation.
- Seeking out the buy-in from the cross-functional business units
Entrepreneurial Energy (EE) promotes and generates
- Entrepreneurship facilitates generative-learning activities as the focus
- High tolerance of risk-taking, exploring the unproven, seeing patterns and shifts
- Pro-activeness in new directions, new capabilities, dynamics and mindsets
- Use of accumulated capabilities (coordinating, preserving and supervising)
- Key decision makers’ traits to investigate and encourage change, risk-taking propensity
- Positive outlook towards diversity & different behaviours, discovery and experimentation
- Providing a learning environment through trials and pilots that can scale quickly
Market Learning Competence (MLC) for establishing a clear awareness
- Through marketing capability and market understanding vigour
- Market focused to acquire, disseminate and use the knowledge acquired
- Exploit through sensing & scanning conditions for diverse and unrelated opportunity
- Possessing a close interaction with customers, users and suppliers
- Ability and speed to react to the variability of the environment
- Possess a high level of competitor awareness
- High levels of customer orientation and “over-served”/ “undeserved” insights.
- Always orientated towards innovation, not just new product development
- Building agility and responsiveness to constantly changing market conditions
- Getting to the “heart of the customer” in outcome-driven ways for their needs.
Relationship & Networking Effects (RNE) and its support to enhance
- Building greater exchanges of knowledge through interactions
- Encourage the constant practice of sharing
- Promote systems of relationships and the structures needed
- Strengthen alignment and appreciation of value-adding activities
- Connecting Knowledge Management with finding ongoing Business Value
- Combing Knowledge with constant practice & sharing
- Support to enhance the needs and guidance through good governance
- Resolve actively the barriers and concerns
- Build trust, connectedness and belonging
- Build a common purpose and share the vision
- Build an identity and offer difference to stop the leakage of knowledge
- Actively connect people to people, people to knowledge
- Gain alignment, be transparent, build identity and encourage networking
- Support the patterns of exchange, their impact on value,
- Assess the dynamics and new value potentials in the different exchanges
- Linking the collaborative efforts to define, align and stimulate innovation targets, strategies and initiatives to support ongoing and sustaining success
- Measure robustness, diversity and renewal
- Searching for defining and designing complementary platforms.
Brief background and some thoughts
On first take all this seems to be a long list, actually, this is offered on purpose. You add your own distinct needs within this formula but take care not to dismiss any suggestions offered here, without ‘good cause’.
The challenge is how you see it, how you value its ability to connect context and the content or aspects you want to focus upon. These structures or building blocks you can start individually adding your unique “flesh to the bone”.
Let this become an innovation capability formula that stays in your head and you constantly ‘walk around’ its parts to get an increasing connection and momentum to build its value from others needing to relate to what is important to building sustaining capabilities.
I got the original idea of this framework a number of years back by reading through some different thoughts that JayWeerawasdena had put together in a number of assorted papers. These assorted ideas and concepts partly fueled my idea that led to this ‘combining’ concept of mine, finally published here.
I feel we need to provide a framework that can be worked in ways that build your own unique capabilities. By focusing on these key components that do tend to make-up innovation that leads to sustaining ongoing competitive advantage you can frame and measure activity.
The other formula to measure this against
The one other formula I use with this is measuring its return on investment. This is
So a framework and a formula to measure innovation’s impact. Does this make sense to you? It has to me for years. I just thought I’d publish it a little wider than limiting it to a chosen few.
Really do think about it, experiment with it and see if it does not give you the increased intensity and focus you are needing for building greater capabilities.
I think you will find it does give you a powerful framework to build those capabilities around, needed to deliver real advantage going forward.
