Shifting Radically the Innovation Business Model

Changing the innovation business model
Shifting Radically the Innovation Business Model

I have been spending some significant time questioning the current innovation business model, from both the customer’s (clients) perspective and the innovation consultants’ one.

Now we all know not all things are equal, many companies have invested significantly in improving their innovation capabilities.

Many of these have been heavily reliant on outside help in achieving this position yet all the effort has led to limited returns for many and still a work-in-progress.

Yet far more of our business organizations are continuing to really struggle on their innovation activity for a whole host of reasons that seem never-ending, disappointing in end result and stuck in management quicksand to ever really change.

For me, the process and management of innovation really does need to be definitely questioned.

Anticipating disruption by preparing adaptive pathways to respond

Option pathways
disruptive innovation pathway options

Option pathways are those viable alternatives available when you are suddenly confronted with the need to change.

By being proactive, anticipating and structuring the options ahead you can be more prepared for disruption, you can respond with more thoughtful reactions. Have you ever considered option pathways?

Having available options so you can react to sudden changes, as more sketched out scenario’s that are representing possible variables, the better prepared you might be to respond thoughtfully.

Preparation for blunting or neutralizing possible attacks, vulnerabilities and changing business conditions is more than helpful, because you have made some investments in different possible options and far more ready to respond in thoughtful ways and not simply in those knee-jerk reactions, simply needing to respond.

Considered response, with significant parts already thought through, can safe significantly on ill-considered ones.

Innovating: So What Is Possible?

Often we forget to frame what we want to really achieve in our innovation activity, instead, we simply dive in and start innovating. I believe until we know what solutions we feel we need or what the market wants, we will more often than not, end up disappointed in our innovative solutions. Simply generating ideas, for ideas’ sake, just does not cut it at all.

In recent years our innovation understanding and its management have significantly changed, due to numerous factors that have been happening. These have been advances in technology, methodology or design- thinking and we do need to stop and think about how we could do ‘things’ differently by asking “what is possible?” This should be asked not just on each occasion of an innovative concept design but within the total innovation system, we are presently operating under.

Perhaps by asking three critical questions on “what is possible?”  we might produce better innovative answers (and solutions) than simply not bothering to, at least, scope out the real possibilities, where we can miss so much.

The aim of asking is to reduce the constraints, free up resources, leverage the techniques available, and equally, push the boundaries of your thinking to want to generate “great” innovation, not just the mediocre, incremental stuff, so often produced and labelled “innovative” that we end up doing.

Making an impact on an organization’s innovation environment

Our Innovation EnvironmentWhere do you set about to intervene and begin to change the organization’s ability to innovate?

There are seemingly so many intervention points it can get bewildering.

The innovation environment can be made-up of how well you collaborate and network, the level of the group and individual interactions, the presence and commitment of leadership towards innovation, as well as the organizational set-up and structures.

You can explore the make-up of the innovation environment in so many ways.

So what makes up the environment to innovation?

It is the culture, management and its people who have a mutual dependency. Culture can enhance or inhibit the tendencies to innovate, it certainly has a profound influence on the innovative capacity and provides the rich nutrients to nurture innovation or kill it. Culture has always been regarded as a primary determinant of innovation.

Changing the workplace environment for innovation?

Creating the Conditions to InnovateYou can’t escape the reality that having the right environment for innovation means different things to different people.

What we should be all able to agree upon is that the environment for innovation houses many of the conditions that connect innovation in people’s minds.
The environment needs to be connected to the vision around innovation, it needs to be translated for each of us to relate to and want to contribute.

The environment provides the right growing conditions for your organization to foster its unique environment to prosper and grow.
Deny those growing conditions and any innovation initiative is going to struggle and eventually die from the lack of the essential feeding of its roots.

The Compelling Value of the 3H for Innovation Management

The Value of the Three Horizons of Seeing Beyond
The Value of the Three Horizons of Seeing Beyond

Following on from my suggested Common Language approach to the Three Horizons, I would like to outline here its significant value, within any innovation management thinking.

Clarifying our options requires multiple thinking horizons – seeing beyond for all possibilities by listening to the different voices

For me, the three horizons have great value to bring together and  map all the different thinking and possible innovation options over changing horizons.

You can frame innovation in alternative ways by using this approach. Innovation has multiple evolution points and working with this framework allows you to significantly improve all of your innovation contributions.

It goes well beyond the present value of ‘just’ fitting your existing innovation portfolio and directional management into a typical one-dimensional view of just working in the present.

The Three Horizons – Providing a Common Language in its Innovation Use

Forming a common view of 3H
Forming a common view of the Three Horizon for Innovation

As you may know, I have been writing significantly around the Three Horizons in relationship to innovation.

Initially drawing on the foundation within the McKinsey initial papers, updated here under their enduring ideas, and in particular based on by its original authors of the book “The Alchemy of Growth” by Mehrdad Baghai, Steve Coley, David White and Stephen ColeyThen I discovered the work of the International Futures Forum, based in Scotland, where a group of members have extended the 3H significantly, well beyond McK’s initial work from my perspective, into a broader, more robust methodology tackling complex problems.

It was this IFF work that excited me, it opened up my thinking to find better ways to deepen the innovation connections and framing that could be suggested in the use of this three horizon frame in exploring and expanding different techniques and approaches.

Connecting the innovation thinking dots

Fluidity – the growing need of organizations today.

fluidy 9Organizations are facing increasing a dilemma in how they organize and manage within their systems and structures.

They are being forced to deal in increasingly complexity and environmental turbulence and ‘adapting the appropriate response’  remains increasingly a difficult one to master, within the existing regime and structures.

On the one hand the value in stability is still essential, working within specific routines and practices gives a clear ‘path dependence.’

This allows for efficiency and effectiveness to be constantly at practice, constantly building the problem-solving processes, so as to master tasks in complex environments to resolve ‘known’ problems in ‘given’ ways.

We need to become increasingly fluid but how and why?

A new innovation perspective – change to fluidity

Fluidity 5Today most innovation is focused on creating new products or services.

These new innovations frequently change or modify operating models and business models, often not by deliberate design.

We’d stipulate that most innovation should be focused on updating and changing business models constantly and with increasing focus. With this focus new products and services become by-products or outcomes that support or sustain new business models for driving greater lasting sustaining competitive advantage.

In short, most innovation should be focused on creating new business models, with new products or services serving as enablers to intentional business model innovation, rather than the other way round. This is what we mean by flipping perspectives.

Critically we have to become far more comfortable with constant, ongoing change and align this into new innovations and business models. This move to positive change is discussed here, recommending a movement that allows the changes we need within our organizations to become more fluid in their adaption, for leveraging and exploiting innovation in new, far more compelling ways.

Most Innovation is Becoming Business Model Innovation

As we consider the interplay between innovation, business models and change, it becomes clear that many companies have a definition of innovation that’s far too narrow.

Increasingly we need to rethink the scope, depth and breadth of innovation possibilities, as well as the secondary implications of innovation.

Ignoring this broader definition of innovation means we can never achieve all of the possible benefits innovation has in store.

We believe ignoring the breadth and depth of innovation can also allow competitors and new entrants to disrupt your position or industry.

Fortunately, some of these definitions have been created for us.

Our responsibility is to understand the definitions and their implications, not stay constrained but seek and explore the broader options this can provide.