A growing reality might be that many people will be forced to stay at home until a vaccine is found, due to their risk of infection. Travel might become off-limits for many.

As we come out of the present crisis, we need to look at our social engagement and influencer profiles as we need to engage with the world differently. We will be in a greater world of virtual management, earning our “daily crust” from what we do at a distance.

This crisis period has become even more dominated by Social Media. What can this teach us?

What is being pushed towards us is overwhelming. We presently see the significant ramping up of webinars, @home advice, those multiple suggestions to fill our time but, is it making a real difference to you besides filling time?

It has one real problem. It is others talking to you. Your voice is missing most, and you need to be heard more than ever. You will need to begin to drive your significant engagement, not rely on others but your views and opinions!

All of this activity is being pushed towards you; you need to now organize yourself to “push back.” This is a time where you need to be seen and heard. You need to stand out and be recognized. This is a time for your social engagement.

It can be a time of significant distraction or time of thinking about what will help each of us to re-orient to a different set of realities and futures.

Are we ready for it, or did you merely ‘park’ your life on hold in these lockdown weeks? If we need to learn anything, it is simply that the world is going to be VERY DIFFERENT, so we need to start re-engaging differently.

How can we all be more productive now in what we do, learn, and get ready? We have become a “virtual online world,” and social media skills become increasingly relevant for each of us.

The changing world for Organizations- not physical events but becoming reliant on on-line and digital delivery

Many companies are struggling to keep themselves in ‘plain view’ to help continue their activities and shape the emerging needs when ‘lockdown’ or economic activity begins to return in the coming weeks.

The previous reliance on showcasing their latest products or technology will be less at physical events but in digital environments through a range of social mediums. They will be forced to ramp up their own social media present accordingly and many are badly prepared for this.

What about you as an individual, how will you be seen as “differentiated enough” to be part of the solution, not part of the problem? How can you be seen as leading and supporting your organization’s need for a “share of presence”, to step up and be seen as someone that could engage, amplify and influence others?

None of us remain unaffected from these unprecedented times

As we all re-evaluate our changing world there are realities that we all facing in this global crisis. We are about to meet some harsh realities that will mean we are all scrambling to rethink, to reposition ourselves to regain a new momentum after our economic lives have been shut down as well as our physical ones.

“Striking a balance between allowing economic activities and keeping controls tight enough to prevent a rise in infections “is likely to be the optimal strategy until effective vaccines become widely available, despite the fact that control policies, including social distancing, behavioral change, and public awareness will probably be maintained for some time”.- Guardian Article

We are about to enter a very different business and social world, where the name of the game will be to hold onto what we have got and fight for survival. We need to regain some level of control to balance our lives, as we feel that cold economic wind, one that will be blowing on us all. Will we find our income lost or that feeling that what we have known or achieved now seems all under threat? Possible, very possible.

A different business landscape could mean significant disruption to many of our own activities, all the way through to perhaps the end of this year, yes, the whole of 2020. We are facing a year of significant change in how we manage, prepare, interact, and provide value to others.

We are entering a highly fluid and rapidly adaptive world.

We are not returning to the old normal, that has gone, buried in the last few weeks. Where will our attention go, where will our creative energy be channeled, are we adaptive enough to make a switch, this is not a time for efficiency this is a time for being highly creative and very innovative. We all need to become far more “highly” creative to sense, respond, and react to very different marketplaces, to find our place within these.

The shift must be swift and decisive for each of us.

We must put on hold or totally abandon our past plans and goals. We must look to a  more ad hoc, opportunistic future to survive and respond. We can’t afford to be passive; we need to become personally engaged.

This is not just a wake-up call for the self-employed, or daily workers, this is about to sweep in and take many sitting in organizations.  Those that receive a regular salary perhaps about to face layoffs, downsizing, extended furloughs, and being told about all resizing that will all be very much in Corporate leader’s minds in the months ahead.

We need to recognize the economic tsunami coming towards us.  

We need a new plan. We need to get out there and present where we, as individuals, stand apart. We need to find creative ways to stand out. In many ways, social media has given us many of the tools and the abilities to shape our own futures, we are all on some level of “zero” or reset. We need to capitalize on our social contribution, we need people to see us and value this.

To be seen, we do need to communicate, or will we simply go back to being passive readers of other people’s thoughts and opinions? Or will we see this might become a “dog eat dog” world to climb back up the food chain?

Social media is in for a really very different onslaught of opinions, views, suggestions, appeals, and advice. There will be a very different set of winners and losers in marketing understanding and communicating their offerings. Can you position yourself to become active and engaged? We do need to get back out there and establish our presence.

What I think will not go away is the ones that position themselves in a new order of advocacy and influence. Emerging leaders or doers that offer an experience, not just “tweet” it on from someone else.

There is an urgent need to explore and experiment to determine your new “norm.”

All business activity has significantly dipped, in confidence and in the future, as so much is unclear, and regular activities are put on hold. Budgets and Resources will be reviewed continuously in this interim period of the remainder of this calendar year and beyond.

We all need an adaptive pivoting strategy that is continuously renewed. What can we provide in a world that is virtually online for some time and companies looking to re-engagement?

This is a time for the opportunity to develop new skills and communication capabilities in a world of changed expectations, where there is the need to act fast and decisively while maintaining flexibility in the face of uncertainties and making sure your views are heard.

Are you gearing up to a different world where you, as an individual, need to be seen, heard, and valued far more than ever before? My pivoting is very much a present work-in-progress, but I feel sure I am not alone in doing that.

The post We all need a different Social Media profile? Now. first appeared on Building Your Innovation & Ecosystem Intelligence.

Time takes on a different meaning; we are cutting out those (unproductive) meetings, the train, car, and flight times, and we have the luxury to do what?

Well, it is offering us that luxury of actually having time to think and reflect. Now that is dangerous as it takes us off our ‘chosen’ treadmill of pursuit.

I was pondering some thoughts around the quest for growth, the demands for change, and the need to become nimble, agile, and more dynamic in what we do. We crowd out our days and never stop to reflect.

So I started to think a little more. Now that can be dangerous, and I am not too sure it gave me answers, just more questions. My starting point was the endless journey of innovation.

We seem to be confronted with an endless journey when it comes to innovation.

We continuously want to change what we have, even when it patently does the jobs we need ‘it’ doing.

There is this nagging feeling of chasing for relentless destruction or maintaining disturbance with new products, features, updates, or adjustments. Often products and services never have time to settle, and the shift to ‘greater’ adoption can take place, we instead return to making change.

Change that simply meets a budget requirement, a belief it gives us a competitive advantage, in this constant update chase we are all caught up in. We seem in ‘pursuit of destruction,’ and arguably, this is wrong on a planet of limited resources. We are indeed a throwaway society.

Much of our quest for change is caught up in the search for new products. If we don’t have these, this will limit us in new growth. New growth is not just new products or services, it can also come from deepening the value of the existing, but that takes a shift in our current thinking.

Would shareholders reward us as highly, if we just extended the existing? That would be kind of boring, right?

Yet, are we getting so caught up in this chase for change?

We deliberately build into our systems the following mantras or ways we should work:

• As we are all becoming far more digital, fluid, and agile, we are absorbing and responding at faster rates, and we are adapting to a constant, multifaceted world of connections, systems, and knowledge piecing, so as to combine up into different new solutions. The outcome must be new products or services as a result, right?
• To get there, we are seeking out new ways to be far nimbler, so we need to learn different navigation skills and become far more assignment driven, less exploratory in many things, and relying on technology to take on this role. We sit back and interpret the results. We need to cut out the time-consuming parts as they make us look inefficient, but do we learn or just dependent on what our data provides us, do we have the time to deeply think, applying human intelligence to artifical intelligence?
• As we feel we are becoming increasingly agile, iterative, experimenting, and continuously determined to execute to drive our results and value-add, we simply focus on delivery and collaboration outcomes far more resolutely but do we fail to deepen a lasting relationship, in our determination to achieve the final result needed?

Yet with all this push to become different, we stay trapped

We fail to change the fundamentals. If we don’t change these all the energy as individuals, we deploy to be seen and valued as nimble, fluid, and agile have such limiting impact. We still seem to be trapped

We still have an over-reliance on past models – when the near future closely resembles the recent past, relying on existing models to determine appropriate actions and investments is rational, but it traps us, never to wriggle free and break out.

Given the increase in the pace of change and the amount and impact of innovation and its impact on business models, it’s evident that the near future does not resemble the recent past, so we must challenge and change these past models but do we, are we brave enough?

Do companies make the necessary profound assessments on the conditions and amplitude of change, driven far more from external factors; they tend to stay locked into the existing, and no amount of individual flair can a new organization learning emerge?

Change proficiency/capability – in most companies, people receive training and develop skills based on their specific roles and responsibilities, but rarely develop skills that enable or accelerate change.

The training received is to enact a specific change; it is static as it addresses a point of time. Change proficiencies should be fluid, dynamic, and constant.

There should be NO change managers. There should be evolutionary managers, keeping the organization in a “creative tension” where it becomes the natural form of everyday work.

We cannot expect companies and cultures to change frequently and capably if people don’t have the skills, capabilities, or proficiency to (change) evolve effectively.

We have this preference for stability over change, but we expect what we sell as consistently in a state of change, yet our people, organizations, and cultures prefer stability to change. We can take a different approach and look to, perhaps a return to deepen relationships, not reply to CRM management tools, extend existing products, increase their adoption, and we still can grow.

To learn a language, we have to keep practicing. To gain more out of Microsoft Word, we should continue exploring the existing features of the program, instead, we get taken over by a new release we never deepen our learning, or we simply brush up our language skills just before we need them. We are proficient, but we are not fluent or assured, in total command.

Of course, stability reinforces itself; that desire for security leads to inertia and, over time, active resistance to change. If we took the evolutionary perspective, would it be different? So Companies today must create a preference for more change, reducing inertia, and building change capabilities.

Focus on short term profits rather than longer-term viability – Since change is uncertain and distracts from that productive day-to-day in operations, there is an ever-increasing focus on short term profitability. Change always takes a back seat to efficient operations and short term profits until the ‘system’ or organization finds itself in crisis.

Longer-term viability suffers because of an over-reliance on an increasingly out of date business model, infrequent innovation, and a lack of planning that the evolutionary pathway of building and extending existing capacity can provide.

Changing our ways

How do we move to a real sustaining value creation that is based on the existing, not just on the new? Is there more sustaining value in stopping product change for the sake of growth, when we seem not to have any in the Western world today and alter our thinking to extending what we have simply got?

We can’t continue to keep throwing away what we have, simply because there is something often just slightly better or giving us a certain “bragging” point as having the latest shiny tool. Can we change how we approach innovation for finding and extracting growth out of the existing, not out of the pursuit, always of something new?

The post Everything is changing faster- can we respond differently in our Innovation work? first appeared on Building Your Innovation & Ecosystem Intelligence.

This week I have had one of those most intense periods of researching and then absorbing the material around different energy issues.

Everywhere you turn, you stumble across reports on one aspect or another of the energy transformation we are undertaking.

I am looking at this energy transition through the eyes of the innovator, as it offers so much in new solutions and designs that any innovator would love to be part of.

Energy is tackling one of the world’s toughest tasks, turning our existing energy system, reliant on fossil fuels into one based on renewables, is an enormously complex set of challenges in its goal of decarbonizing it.

There is such an innovation landscape of solutions that are contributing to the world achieving a more renewable-powered future. Technology innovation, suggested new business models, outline proposals for changing policies, processes, and market design all are being “sketched out.” It is overwhelming, but innovative solutions need to be continuously refreshed to reflect this consistent inflow of understanding, relating to the energy transition that is being undertaken. It is evident innovation must be way broader than just technological RD&D.

During this past week, I have been working through specific aspects of the energy transition model.

Firstly, I have been looking a little more at the emerging focal point of Grid Edge. The Grid Edge includes the innovative solutions of hardware, software, and business innovation that are enabling smart infrastructure to be installed at or near the “edge” of the electric power grid. So things that you can touch or see, such as solar panels, metering infrastructure, local energy storage systems, smart thermostats, appliances, and building controls, are in Grid Edge Hardware solutions. The software is automating this, more demand-responsive, real-time data, data analytics, and planning systems to extract the value out of the data. Business innovation is turning that knowledge (data) into value for aggregation, trading, and supporting whole communities with managing their energy needs, for example. The Grid Edge solutions are on the rise.

My second area of focus was on the contribution digitalization is giving energy. The ability to connect everything up, to collect its data, to communicate it, and analysis it is changing the nature of how we are managing energy. Transport is becoming smarter and more connected through onboard computing power, the use of sensors, and the tracking, and the whole world is redefining this as e-mobility as the cars become electric. The value is in reducing vehicle emissions and Co2 levels. Buildings are also going through a digital revolution for managing heating, cooling lighting, and occupant movement. Having a more connected building also allows for increased security, maintenance, and safety. Thirdly Industry is undergoing so much automation, enabled by the digitalization and technologies where AI, Robotics, 3D printing, and machine learning are all ushering in entirely new ways to operate and manage plants. The impact of having digitally interconnected systems is revolutionizing energy management, let alone the control of the assets these digital solutions are built into.

My third area of more in-depth investigation has been Hydrogen. Clean hydrogen has been enjoying unprecedented political and business momentum. To achieve a low-carbon transformation, to decarbonize the energy world and meet the targets in the Paris Agreement (2015) from electricity through renewables, then it needs to substantially increase its share of all energy supply. Today gas, coal, and oil still dominate the energy supply. So many sectors require high-grade heat such as transport (aviation) or specific heavy industries (cement, pharmaceuticals, chemicals), and it is difficult purely through the means of electrification.

The promising solution is the scaling up of Hydrogen solutions, from renewables. The argument is that hydrogen is the missing link in the energy transitions we need to make. Dealing with variable renewable energy (VRE) from solar or Wind requires storage, and solutions like electrolyzers can help integrate VRE into power systems. The use of an Electrolyser is a device that splits water into hydrogen and oxygen using electricity and becomes the carrier of renewable energy and complements electricity. This way, we can balance loads on a grid through more effective storage and industry or city demands. Many hydrogen technologies are maturing at present and are at the point of scaling up that will help accelerate the substitution of fossil fuels that have this higher heat attribute. Today hydrogen is produced from natural gas in refineries, ammonia production, and bulk chemicals, and hydrogen from renewables can replace fossil fuel-based feedstocks, where we have high carbon emissions today.

My fourth area was checking back on the tracking of clean energy progress by technology in the different energy sectors or subsectors. These progress report cards come out regularly, but the one I wanted to work through was from the OECD and IEA ones. This clean energy report tracks 26 technology classified areas of energy, covering energy supply, energy demand, and energy integration. The approach makes sense as it is the ability to deliver the WHOLE energy system will give us the climate, renewable, and energy transition benefits. Managing this transition across the globe is a complicated task.  At the time of the report, 2016, only 3 of 26 tracked technologies were on track towards a sustainable energy transition by 2050. Eight are seriously off the track, including how coal is still dominating global power generation, advanced biofuels solutions are still lacking take up to scale and fully validate them, and we still have a staggering two-thirds of countries that do not have building energy codes in place.

I have also been reading we are way off track on hitting the 2-degree target for global warming, agreed at the Paris Agreement (UN-related reports), and the growing consensus is we are at 3 to 3.5-degree mark. That is accounting for the level of commitments being made today to tackle climate warming, where our energy is such a significant contributor to emissions. So in tracking the essential technologies within the energy transition, you get a clear sense of our progress or lack of it on a global scale. This 30,000-foot perspective is sometimes sobering to all the activity that seems to be occurring at energy events or within the companies dealing in solutions. Yet the gaps, in reality, need addressing and fast.

There are so many promising technologies lagging the commitments dues to lower funding, more significant technical difficulties, or not being able to be exploited due to political, regulatory, or business constraints. Innovation solutions can only advance so much, but without the political or business will, resources or capital can only progress far slower. It does seem we do not have the momentum we need to undertake the transformation of our energy systems yet.

Drawing some interim conclusions

Coming to the end of my specific focal points from this week, the cost of this energy transition needs to run into trillions of dollars. One account is around $20 trillion up to 2030. In the context of global GDP, this is running about $80 trillion a year, and the global annual investment is at $20 trillion. Our capital markets are presently not geared to this, but it is argued these additional investments in energy towards the 2-degree pathway should not be a major macroeconomic challenge, but at individual levels, it is daunting. Energy does need to change from high to low carbon technologies, but we are still glossing over one of the biggest challenges within this transition journey; how we pay for and finance the energy we use and who in investors, industries, governments, and companies will share the burden.

There is a hard reality we are failing to make in the energy transition. Making any move wholesale from an existing energy system to a future low carbon system has disruption, competing forces and vested interests, it has huge risks and the methods to manage this transition needs new types of investment portfolio’s to diversify risk and build investment concept models to manage this change, fund development and put a significant repowering into the projects, big and small, we need to undertake.

Next year, 2020, the world leaders meet, I think in China for a review of past agreements, progress and make their next assessment around the warming climate. Much as there is a lot of hype and industry activity, the reality is the level of capital, commitment, political and business determination, and necessary momentum for an energy transition is still not in place; we are lagging badly, and we need a global commitment to engineering the energy system as part of the recognition that our energy systems are a principal cause of global warming. We are approaching this in “piecemeal, ad-hoc ways, and not through structured and institutional agreements to bring this together.

The need is for robust, comprehensive energy transition paths

As we move towards a world of more electricity based on renewables, we do need to have well defined and executed transition paths. We need full energy market designs and not, as we presently see piecemeal solutions. We are tackling a global need to reduce global warming, to reduce carbon and all greenhouse emissions, and have more renewable, stable, and flexible solutions that reflect the needs and demands of the 21^st century, where we are highly dependent on a steady, sustainable source of energy supply.

Let the innovator’s energy transition journey continue…………………..

** the Investment numbers quoted in my interim conclusions are taken from a paper  released by www.energy-transitions.org. in their Better Energy, Greater Prosperity report supported by the ETC Secretariat, here in Europe.

The post Continuing the Energy Transition Journey first appeared on Building Your Innovation & Ecosystem Intelligence.

Technological innovation has a central role to play in the Energy Transition currently being undertaken throughout the world. The shifts need to take the different parts of the energy system through a lifecycle approach to any future energy system

Briefly, our energy system has been based mostly on fossil fuels (oil, coal, gas) and as we extract these, they are non-renewable and the primary cause of the carbonization crisis we are all facing on planet earth. The solutions to replace these fuels are renewables based on wind, solar, biofuels, and have a sustainability credential. The economics of powering the energy system with renewables has got to the point where there is real competitiveness so we can undertake this energy transition and reduce the emissions of carbon into our atmosphere.

Such significant investments are made within the energy system that has assets that have thirty or even more years of “useful” life.  So within our current need to undertake an energy transition, you have to first look to improve the efficiency of your existing plant or system; then you have to make this fuel shift from fossil reliant to renewables. The lifecycle is long and difficult in any transition from one source of power as the infrastructure, supply chain, and supporting needs all evolve around that principal source of energy choice. Any change is a massive undertaking.

To get to the point where you are finally taking out carbonization fully can be a journey over many years. The role of technological innovations will significantly help make the transitions needed, hopefully in a well thought through structured way.

Six critical focal points of the energy transition need a broad focus.

The six main thrusts for technological innovation within the Energy Systems for today’s energy transition are:

• To accelerate the deployment of renewable energy technologies throughout the system.
• There is a real need to find innovative solutions that focus on the end-user sectors of transport, industry, and buildings.
• The technological and digital innovative solution needs to focus on the overall system design and the operation needs.
• Innovation needs to increase electrification through emerging solutions on digitalization of the grids and provide grid-scale energy storage for resolving variable renewable power.
• To push, nurture, and facilitate different energy sources to provide solutions to scale them up. These include battery storage, solar power, geothermal, biopower, hydropower, onshore and offshore wind and finally tidal power.
• Lastly, innovation needs to achieve an affordably decarbonize industrial transition

Besides technological innovation, there is growing potential for redesigning operational systems through new services, tools, and distributed generation deployment. There are equal opportunities to find fresh market designs that have built into them demand-response models that can provide more significant differentiation in tailored services.

Changing the design of the energy system can also offer the exciting potential of designing new business models that look to co-creation, provide more flexible power purchase agreements and bring the consumer into the system as aggregators in their own right. Many of these are solutions that continually unlock the system’s flexibility.

The diffusion of innovation is essential to understand to eventually achieve scale.

The critical point of mobilizing the energy transition comes from the rate and extent of adoption of innovation.  When you are attempting to undergo such an energy transition, the ability to recognize “adoption” of new solutions, technologies or radically new designs of energy needs to be well understood to enable this to occur.

To help understand this shift and adoption process, I turned to a theory outlined by Everett  Rogers (March 6, 1931 – October 21, 2004). He was an eminent American communication theorist and sociologist, who originated the diffusion of innovations theory and introduced the term early adopter and the model for this we have become very familiar with.

The Characteristics of an Innovation Diffusion

Roger’s theories do stand the test of time, and I want to refer to the Characteristics of an Innovation Diffusion here as it is highly relevant to technology innovation diffusion in the energy system for going through an adoption process.

He characterized these as 1) Relative advantage, 2) Compatibility, 3) Complexity, 4) Trialability, and 5) Observability. Let me briefly explain these:

Relative advantage is the degree to which an innovation is perceived as better than the product or solution it superseded. This is in cost, financial payback, utility, convenience, or advantage. In his theory, the higher the perceived advantage, the faster the rate of adoption

Compatibility is the degree in which an innovation is perceived to be consistent with the existing values, experiences, and needs of potential adopters. As we change our “norms” in energy solutions and our values and appreciation of the requirements to change, there is a constant search for growing compatibility. The more it can be seen as compatible, easy to adopt, the more likely it will be considered as a progressive solution.

Complexity. Complexity is the degree to which an innovation is perceived s being challenging to understand or use. Those solutions that are more straightforward, more intuitive or a no-brainer will be adopted more rapidly than those that have high levels of new skills, knowledge and operational experience

Trialability is the degree to which an innovation can be experimented with on a limited basis. Something we trail or pilot represents less uncertainty to potential adopters and clearly can allow adopters to learn by doing. The value of trials, pilots, and prototypes will also be adopted more quickly than those which cannot. The value within such a highly evolving market like energy transitions, the functional effects can be related to the risks of the dysfunctional. Avoiding undesirable consequences helps the rate of adoption, where new technology has many unproven aspects.

Observability. Observability is the degree to which the results of an innovative solution are visible to others. The easier it is to see the benefits, as real and tangible, the more likely it gets adopted. The epidemic model applies here. When innovation spreads is when it is adopted and valued, and having contacts with users of the solutions significantly helps diffusion.

Rogers also discusses the adopter profiles familiar to many of us, early adopters, through to late majority to be the process of diffusion (see above). The critical point here is the process of diffusion needs to be well-managed as the process of development

So as we call for more technological innovation in the energy transition, the value of Rogers diffusion of innovation becomes essential to appreciate.

The need for accelerating the energy transition will be highly reliant on organizing the technological innovation pathway. Innovation is far broader than just R&D; it will also come from business models, changing existing policies, processes, and market design to provide the impact necessary for the changes we need in the energy system.

As we search for enabling technologies that facilitate the integration of renewable energy, accelerate storage, explore sector coupling, introduce new ways to operate within the electricity system, seek out new power generation, design the grids for increased flexibility and digitalize solutions to provide further services, tools and distributed generation deployment knowing how to diffuse innovation in these general five approaches becomes valuable.

It becomes valuable to design technological solutions to be able to “travel this diffusion path”; it gives market confidence and encouragement that the innovation story is designed to take decisions through this innovation adoption approach for the solutions the energy transition has to pass through.

Does it make sense to apply the diffusion of innovation? I think so as you have a validating process working through these five innovating characteristics.

The post Innovation adoption in the technology lifecycle for Energy Translation first appeared on Building Your Innovation & Ecosystem Intelligence.

I decided to invest a decent amount of time into the Siemens 3^rd Quarter Announcements and it has been worth it.

I really don’t understand the reporters and analysts attending this event as they seem to continue to stay stuck in their recurring opinions and stances, constant looking in the rear-view mirror. It has its reference points perhaps but it is understanding “the road ahead and its conditions” that provide shareholder value.

We need to become more forward-looking based on strategic outlook, innovation potential and market opportunities.

The analysts seek to always look constantly to the immediate, often not looking beyond their own noses. They seem not to want to go under the bonnet through investigation, just rely on ‘given’ handouts or myopic views, rooted in the short-term. The sound of future innovation potential was in most of the event as very evident but lost in the focus on immediate numbers and results. Why?

Widening the scope of inquiry

Do these questions, many highly narrow in their own scope serve us well? Surely we should be looking far more for that “real, sustaining value” under the hood of a company that shows a growing clarity to the future? One or two questions certainly were attempting to get under the hood but you get that feeling they (reporters) were simply  wanting to “pain the CEO in a corner” in forcing out positions wthn the management’s reply that then”paints them in a corner” so the reporter can go back and refer to them (constantly) at a later date. I find that highly negative.

Although there was a new word that emerged to counter this and couch future options under “optionality” simply as much in the future stays “highly fluid”. It is advisable to have constant evaluations, up to the necessary point of a required decision, to then make the best decision in (their) judgement.

Of course, some of the replies from Management remain vague, sometimes annoyingly so, couched in future options such as “optionality” that can leave you, as a listener, in negative territory wanting more understanding.

By the way, the meaning of “optionality value” (optionality used in a financial sense) is “enormous and choice or discretion is allowed”.  Now that sounds intriguing as it was used many times in this Siemens Event.

As the CEO of Siemens rightly put it “it is always a difficult balance to strike between the doable and the desirable. Sometimes the speed to go to the desirable has got to be slower because the doable will otherwise not be accompanying you”.

Who actually creates the volatility- the messenger sometimes needs to reflect.

Share price volatility depends to a large degree on finding the balance between short-term gain and long-term planning and structuring.  One headline prior to the actual the event was “Siemens sees lower profit, announces restructuring followed with this short “breaking news” article : “Siemens sees lower profit, announces restructuring” then you hear one of the analysts noting “that they see today that the share price is trading down” asking what Management is doing about it. Well, duh, of course, results are down for many well-explained reasons, market reasons. Yet the immediate reactions are far more due to these immediate news feeds that shareholders were given (by you analysists) that provides a very restricted story.  The headline-grabbing reaction that this type of “dramatic” heading makes the positive story very hard to get out there as the valuable one to absorb.

Would I scoop up Siemens with many others within closely related business areas? Specifically, those desperately struggling in their crisis, mired in rapid reorganization and sell off, of past strategic parts? Yet that is what you immediately think, with headlines like these above but is that really true? Clearly not in my opinion, totally different but treated in the same sensational way.  I think it is a headline bordering on a level of reporting that continues to push reporting into an ever-tighter corner, boxed in by this type of translation and a constant search for “hype”.

Listening for the deeper messages from this Siemens event

So I wanted to sit down and listen carefully to the very extensive explanations laid out by the CEO, Joe Kaeser, and the CFO Ralf Thomas. I said earlier “we need to get under the bonnet” and the level of “analysis offered” at the event just failed to do that for many. I saw this differently. Many, not all, were applying their own narrow lenses to the questions they asked not connecting all the story given at the event. As Mr. Kaeser remarked, “I do appreciate that maybe the quality of detail has been insufficient for some, but obviously have been more than able to digest for others, so we need to bring things together….”

So what has this to do with innovation?

Well, it is only when you get under the hood you begin to see the sparks of creativity, innovation, and imagination working away. In Siemens case when you are in leadership positions where the “feast of opportunities” for Siemens electrification, automation and digitalization systems of products, solutions, and services are coming together in some imaginative and thoughtful ways to evolve and solve many of the challengings within the world, you need to dig a whole lot deeper.

Perhaps Siemens is failing to tell this “future story” in a better way. They have seen the paradigm shifts and are repositioning themselves to address these in new business-orientated ways to further shareholder value. Here lies the real story, by being adaptive and responsive you are tapping into creating attractive growth opportunities. So why become fixated on the past (last quarter results) when you need to understand one company and its approach to the future, to overcome transformational challenges? It is managing these that gives us innovation, growth, and creativity.

Making the calls to a new platform for business need

I was reading, just before listening to this Siemens Event, a piece by BCG Henderson Institute, entitled “Leaping before the platform burns; the increasing necessity of pre-emptive innovation”

The article rightly points out that we know systems are failing faster than ever, businesses are operating in increasingly complex adaptive systems that are increasingly reliant on mutualistic relationships, where one benefits from another (business ecosystems in my thinking and work) to grow markets, to solve more difficult challenges and drive its development. Siemens is setting itself up to do just that.

The BCG article also points out “we are facing countervailing forces- negative feedback loops – that limit growth”. Part of those is “traditional business metrics and strategies that tend to reinforce these negative feedback effects”. One of the roles of management as nicely put in this BCG article is to “anticipate exhaustion”, “make big and small steps” and “embrace evolution”. Siemens is doing just that in what I heard.

At this Siemens event, I heard many analysts looking to provide negative feedback loops, in their questions. Management needs to give as much depth or color to ideas, concepts or future assumptions as they can. We come back to the balance between “doable and desirable” spoken about by Mr. Kaeser

Why should we look deeper and listen just a little harder?

As this event showed (well to me) that the depth of thinking, the processing and “best” judgment being outlined as a “way forward” offers a better pathway to a “feast of opportunities”. As Joe Kaiser rightly underlined the major intent of his outline was around the whole intent of Vision 2020+, to integrate the interest in an evermore “dividend world” in this balanced meaningful way. It may not be perfect, or fleshed out in the “granular detail” but it is signaling the way forward in very deliberate and broad brush strokes, the details of how this is “colored-in” will emerge in the months ahead.

Siemens is reshaping its organization for a greater long-term value creation by giving individual businesses sharper goals and targets to chase, to provide them more entrepreneurial freedom away from a consolidating center so as to sharpen their focus on their respective markets.

Siemens looks to build new growth opportunities in partly a new emphasis on IoT integration services, distributed energy management and greater infrastructure solutions for electric mobility. The decision to consolidate the business down into tighter groups, such as dealing with a broader remit in industrial digitalization gives new growth opportunities. How these are managed going forward is another matter as Siemens needs to believe it has greater strength than many others in this field of opportunity. It has but it does need to tell the different stories of that future in new ways.

I have some lingering doubts over the execution in this industrial digitalization, but I do not have doubts over a vision or where the focus needs to be. It is how responsive and adaptable they are and for me, that seems like a work-in-progress that is getting better but not yet good enough. The level of integration is going to be critical and well-managed with the senior group coming together in greater ways around the emerging vision and strategy. This needs well-managing.

I want to pick up on some of these real, tangible innovation stories in the next week or so.

The announcement of buying Mendix, a leader in a low-code application is certainly one is a very exciting purchase. My mind has been racing over this announcement.

We could be seeing a new platform dawn, one of a “Smart Platform, full of smart apps designed to seek out experience, not just data” This is going to be potential “context-aware”, “intelligent connected” and “pro-active” in intelligence outcomes.

One key to unlock this is visualization in programming, combining artificial intelligence and knowledge graphs to build better, informed work-flows. This is a must for me to focus upon as it overs the route to the 2^nd generation of platforms, smart and dynamic for abstraction and automation. The point of shifting to “experience relating” is crucial. I see a very clear three horizon plan emerging with this Mendix and Mindsphere integration that I’ll share soon that takes platforms into a new era.

This building of a business unit for IoT Integrated Services is another. The lack of platform adoption by many companies has been significantly held back by not addressing comprehensive strategies for digital transformation and a feeling of concern, to date, over the poorer comprehensive support needed in any transformation. If this can be pulled together in the way Siemens believes it can do this, then terrific but the providers of specialized services need to be pulled into the Mindsphere platform in different ways and repositioned in the Ecosystem to deliver on this ‘aspiration’ in greater service to the clients and customers’ needs and wishes.

I also want to investigate the new “Smart Infrastructure” business being ‘bundled together” in this announcement of a reorganization. Where what, how and why this will unleash a whole new era of innovation solutions. That is exciting to explore in multiple ways for innovation perspective.

So let me offer a simple summary

I heard a different story by listening carefully to the Siemens Event. It struck me as very progressive in how they are wishing to respond to the changing world. Yet more importantly where innovation can be positioned in the future vision that was outlined. There are so many stories of innovation potential to tell at Siemens- now that is a “feast of opportunities.”

My focus continues to get as deep as I can under the bonnet of Siemens, more and more as it reveals itself. It needs to think about building more “compelling” stories to link to the future, so the prevailing negative forces diminish or maybe regroup as they equally focus on the future and stop looking constantly in the rear-view mirror, attempting to predict the future,

When you stay stuck, perhaps based simply on the past and not look  deeper and rigorously towards the options Siemens have to explore in the future is a shame, it misses the possibilities and options and these seem highly promising if executed upon.

The management is attempting to do it job in sketching out the potential in a rapidly changing and challenging world and the future is not based on the past, believe me, but on how you set up for the future.

Telling the future innovation stories builds a better future for all involved. Somehow Siemens need to draw these out, it would help many ‘stuck’ in the present, based on (past) experiences.

Let’s give credit, where credit is due.  When a Management of a Company comes out with a strong vision, a set of well-thought-through validations and justifications. It equally resets the metrics and accountability closer to where success is found, closer to the market and reliant on people and technology to continue to combine and progress in new (imaginative) ways.

We should be applauding not pushing the underlying messages down into negative territory when the future does seem very bright.

The post A feast of opportunities for Siemens? first appeared on Building Your Innovation & Ecosystem Intelligence.

It is then by utilizing robust research and development projects, combined with an acquisition strategy that augments growth, management creates sustainable and evolving business model.

These are the hallmarks of effective leadership. through managing your future development, mostly through research and development, that when combined with a sound acquisition strategy, that you believe will augment your present internal growth, so as to look to sustain the business, longer-term, becomes your contribution as a leader.  These are the bedrock of good corporate management. It seems within GE, all of these have been forgotten or collapsed. Why, I mean how can that have happened?

For a company reputed to have a good management discipline and focus, yet this year, 2017, for GE, it seems all of these are lying in tatters, or some parts will lose out as a consequence, into the future. What has gone wrong at GE?

The last few months have been some of the most shocking ones in GE’s history. GE has been around since 1892 and was one of the corporate titans of the 20^th Century. Since the crisis of 2008, GE has been struggling to fully regain its position but all its actions were regarded very highly as “making good progress” as it maintained a relentless momentum of shedding and acquiring operations, as well as pursuing a buying back of its shares, and paying out the beloved GE dividend. This certainly provided a highly dynamic environment for managing the business. There has been a consistent muttering that this was not fast enough or clear enough. Well, GE faces a very different set of realities today.

Today, GE is in a very dark place at this moment. It is managing a full-blown set of crisis, that has investors highly spooked and demanding answers. Its share price is hovering around $17 per share, whereas, in February of this year, it was ranging in the $31- 32 price. Its market valuation, once over $400bn, is now closer to $150bn.

This is a long read, as the story itself is only just emerging and is a complex one. I simply have to step outside my own innovation comfort box to try to get to grips with the breaking GE story. It has shaken me.  I assume you already have some awareness of what is happening in a company that has been held up over so many years, as a model of good management.

So let’s jump in and try to find some answers to the GE story unfolding in front of our eyes, it is one that has more to come and a finish that is less than clear. Is it too big to fail? A Kodak moment? Will GE eventually break up? Or is this a set of crisis overhyped and those attempting to manage the complexity of this turnaround will simply put it back in good order in the next eighteen months. I just wonder if it does hold more ‘spin’ yet to be discovered?

Whatever, it is a big story happening in front of our eyes and it is generating more coverage by investors than you can possibly read. So here’s my take on it, so far:

Past transformation activities were not enough within GE, the cash has been running out!

Jeff Immelt who ran GE for the past 16 years, attempted to radically transform the business, he really did. GE was beyond the classic conglomerate, it had such a massive financial arm, GE Capital that at one point in that financial crisis of ’08 it had been determined as “systematically to be deemed as an important financial institution to be allowed not to fail”. In preceding years, Immelt stripped away as much of the tangled web of GE Capital to refocus the business on its core industrial business. GE Capital is certainly a tangled web and still might become central to any further crisis.

Yet GE stayed locked into the classic conglomerate structure, where Immelt chose the shaping of this by taking the high road of acquisition and spending, to be his attempt to reshape the business. In Immelt’s view, he was achieving a strategic transformation, yet it seemed he also relied far too much, in recent years, on the significant ramping up of the digital arm, now Digital GE, that equally required lots of cash. GE made a $4 billion bet on connecting industrial equipment via the Internet of Things (IoT) and analytical software with a suite of products called the “Predix Cloud”. This has a significant place in the future but it was not able to alter the conditions that radically changed in the marketplace GE are facing today.

The complexity of the GE transformation is unique and unfinished

This complexity of transformation, when you operate within any heavy industrial asset world, is a significant challenge, especially today when technology is fast displacing dated business models, technologies and ways of work at an ever-increasing pace. A world where others, far more nimble and agile, are able to respond as they are more laser-focused.

Yesterday’s models of the world, especially the conglomerate, has to be equal to the same task of responding to the short-term nature of our stock exchanges and increased returns. Our stock exchanges are still not recognizing the value or rewarding innovation in a time when companies need to be innovative more than ever. There is such misalignment in time for innovation to emerge. This impatience goes far beyond companies and investors, it is hurting the economy and society as a whole as well.  Each company, big or small needs to be nimble, agile and highly focused, on what will return a market premium, or the investor drives your business down even more. GE has been caught in this for some time. Time is not on your side in this world of immediate return. I wonder if GE will follow its rival, Siemens in moving towards more of a holding structure of separate entities?

With all Immelt’s selling off of those slower-growth, lower-tech, and non-industrial businesses, over the years, he just simply stayed with too much of the core business model as central, being managed centrally. He was ignoring the shifts taking place within the marketplace,  or perhaps he had the feeling he could shape them accordingly, simply by GE’s actions and rhetoric. More of his businesses were far more vulnerable than he realized to the changes taking place in these markets.

Even though he doubled the GE investment in R&D progressively, the innovations emerging from the businesses were not transformational enough to counterbalance all the negative positions developing in market shifts, although it produced some significant breakthroughs and advances on what went before.

A slowing growth, a rapid shifting of market sentiment, from fossil fuel to renewables, also went faster than expected. Other more focused companies were re-working their core business models where digital played a part. In retrospect it seemed in GE, it increasingly became the only growth game, in his view, besides acquisitions to bolt on to existing industrial business areas. Digital became overwhelming in management attention, to find and sell digital solutions.

Then came 2017 and the roof caved in on GE

Immelt kept faith on the existing core industrial business, he even recently decided to double down on the fossil fuel industry and you can question seriously was he ignoring the realities of where the sentiment in the market was going. He had a greater belief this was a time to consolidate within core businesses reliant on fossil fuel.

Until this year, a constant stream of GE buying back its own shares, paying out a good, solid and reliable dividends and profit returns has kept the investment market from deeper questioning. Coupled with a consistent upbeat stream of management views has projected GE as a well-run and highly effective, highly optimistic organization. There was a growing denial set in by all that steady reassuring news. Well not anymore, GE recently in its 3^rd quarter review revealed its chronic cash position. In reality, its free cash flow can’t pay its obligations. Its recent acquisitions were not achieving the synergies expected and especially GE power was in deep trouble. Could this have been foreseen?

In 2012 GE free cash flow (FCF) was $16.2bn, in 2015 this was down to $12.6bn, then in 2016, this started to drop significantly with it really “hitting the rocks” in 2017, with some suggesting a negative of  $3bn predicted for this year, although the urgent action currently was undertaken, might pull this back into positive territory, partly due to the dividend being cut in half, allows for this saving to flow through. Some in the markets still view the latest GE predictions with caution, as too optimistic.  In late January 2018, they will be announcing their 4th quarter and end year results, to confirm the full 2017 performance and that will determine, much of the future, and determine even more immediate action.  Presently the GE position is that they will claw back too  $6- 7bn (FCF) in 2018, although many in the market are predicting this might be tough as well. Suddenly they have had to be faced with a cash-starved reality.

So the cash to fund the bets, fund the dividend, keep paying into a pension scheme, keep pushing the digital solution began to unravel, as the main business units generating the cash, built on fossil sources, dropped through the floor. Oil, gas, and power that GE had put ongoing bets on, have become significant cash consumers at unhealthy rates. The other parts of GE, especially healthcare and aviation could not bail them out.

Obligations mounted. Dividend cuts (50% ) have caused significant anguish for the longer-term smaller investor who was partly reliant on that consistent dividend pay-out. The dividend policy is still up for potentially more cutting, the share buyback is highly questionable (if you have no spare cash) and any M&A program suddenly becomes shrunken dramatically, down to small tweaks. Ouch!

Immelt retired and his vice chairs headed also for the exit door

Immelt made a series of expensive big bets that especially investors did not share as winners. The synergies were hard to extract on his promises. So in mid-2017, the writing was on the wall, Immelt needed to go. He resigned or was retired in June 2017 as CEO and it seemed quickly departed as handover Chairman, once the 3rd quarter results come out.

GE was heading for a full-blown crisis and the new CEO, John Flannery, quickly became also the Chairman and undertake a massive review “across the board”. Three vice chairs in Beth Comstock, Jeffrey Bernstein, and John Rice also decided the time was right. In Flannery’s opening discussion with investors, he outlined a dismantling of the legacy of his predecessor as he began with his comment “we need to make some major changes with urgency and depth of purpose”

So what has caused this radical shift to turn GE into a full-blown crisis?

Running out of cash, bad investments in recent big acquisitions, paying out of a dividend that GE’e earning could not sustain and the collapse of its GE Power division and coupled with the continued lackluster of the oil and gas business, transportation, and its lightening business has become the crisis. The business model was broken and was in a real urgent need to be fixed, markets were not performing and GE was becoming even more complex with the layering on of digital to every business, to shift the focus from product and service into product + service + digital.

GE had gone for a doubling down on fossil fuels when the world wanted solar, wind and all other renewable sources of energy, as well as the global customers seemingly determined to keep extending the life of the existing asset and not invest in the new, however much, GE tried, in its selling.

GE was attempting to unwind a very complex beast. It goes back actually a long way. Even in Jack Welch’s time but in the tenure of Jeff Immelt the GE stock fell by about half. Its stock is trading well below where it was 20 years ago. In 2017, so far, GE is the worst performing stock on the Dow Jones Industrial average. The trouble was GE was unable to make a complete strategic transformation, it got caught up in supporting its old business model, just by adding new digital clothes.

Renewable energy versus fossil fuel- a reality check

As solar and wind power costs have plunged, this has been challenging the traditional model of the industry. Mr. Immelt decided to bet the other way by investing in  2015 on Buying the power business of Alstrom for $10bn, a company specifically strong in coal plant designs.

Then he went and paid $7.4bn to merge with Baker Hughes that has an oilfield and gas manufacturing and services business, that has been in seriously difficult market conditions for a long time. This created a merged company where GE retains 62.5% stake. I have heard that In the past the attitude between GE and Baker Hughes in the marketplace was antagonistic to each other. Not ideal for a friendly merger and already the profits of that business for the first nine months of 2017 were down 41%, excluding restructuring costs. The synergies were not materializing in downturn situations.

The Gas turbine market, a significant part of the GE power division, for example, has fallen through the floor, along with the usually highly lucrative improving gas-fired plants has dropped away as the shift to alternative sources of energy continued. GE is not alone on this rapid decline and bad forecasting, Siemens, the other titan founded also in the 19^th century, Siemens in 1847, GE in 1892, has been equally scrabbling to drive down costs dramatically in their power and gas divisions. It does seem Siemens has been well ahead in spotting this trend, warning of the risks within the hydrocarbons- based power, a lot earlier.

Both Siemens and GE are having to deal with some rapid adjustments and downsizing. Inventory needs to be run down so the demand/supply is rightsized and any healthy return to positive financial results for GE might not show through until 2019 at the earliest, most even are predicting 2020, draining GE of much of its management attention.

There is going to be a very painful adjustment in their GE Power, as well as their Baker Hughes division, and related GE Energy Connections business, in adjusting to the present and near-term realities of today’s markets, one of the reduced demands for power and oil solutions. Is this cyclical or permanent? In GE’s case, they will be hoping for some shift in really tough market conditions, presently facing them as they have been placing really big bets in recent investments that fossil fuel will still be needed to satisfy the world’s power needs.

GE divested their Water business a while back due to concerns that the deal would not be approved by the US government. Not only was the Water business highly profitable, but it was a segment that would almost certainly have led to large profits in the future. Selling the water business was, in retrospect perhaps a poor business decision for pivoting away from being reliant on fossil fuel.

The confluence of issues came into reality also in 2017 for GE- a lack of cash finally hit home!

With the power division in so much trouble, on its own, it might be contained but GE’s troubles don’t just end there. The opaqueness of how GE managed its conglomerate has been a source of worry for investors over the years. Until this year a constant stream of buying back its own shares, paying out a good, solid and reliable dividend has quietened the market, along with a consistent upbeat stream of management views. There was a growing denial set in. Not anymore, GE recently in its 3^rd quarter review revealed its chronic cash position. In reality, its free cash flow can’t pay its obligations. Suddenly as I stated earlier, they have had to face up to a cash-starved reality.

Also, the pension fund has been grossly underfunded for some time, where some regard a fair value of the GE Pension fund to be $63b, benefit obligations of $94b and GE’s pension shortfall of $31b, the largest underfunded pension plan in the US. GE has been forced to borrow in new debt $6b to pre-fund some of its immediate obligations in 2018 to 2020. This becomes a real red flag as these obligations only continue to build and will constantly drag down share price for the dividend or shareholder return with this level of obligation. According to one analyst, this obligation of $31b equates to $3.50 each share.  So GE is shifting more to debt but needs to address this pension obligation, in the future.

Finding cash to fund obligations makes for a very uncomfortable position. To have its major business, Power, caught in a severe, possibly consistent declining market, reliant on fossil fuels, makes for a double whammy.

The pressure to save money; to delay payments, to renegotiate supply conditions, to reduce expenditure, all need a high sense of operating awareness, sensitivity and observation of possible consequences, as each changing action has its negative impacts when you are managing to extract cash or delay your spend or payment.

Yet the worries continued unabated.

Until the management of GE resolves the opaqueness that many still feel is surrounding GE. There will always be a feeling by many investors, that “they are spinning a good story,” something laid at the previous managements door of over hype and promise, under delivery. Here Mr.Flannery has been far more open, signaling the problems he is finding

The real opaqueness lies in GE Capital, it needs to become transparent.

There is a growing view that GE has billions of dollars of obligations from reinsurance agreements with other insurers. Each time GE was caught in a bid for contracts on any significant scale, GE Capital took on a portion of the carriers responsibilities of paying and helped in having access to more favourable rates of borrowing, due to its near- bank status (recall the designation some years back of “systematically important financial institution to big to allow to fail”.

Thankfully there is a set of actuaries examining GE’s long-term care reserves, many in the market believe these might be deficient. If there are any skeletons found here then GE would be very much down on its knees. No spare cash, struggling major portions of its business and a lack of growth in many markets is a very uncomfortable position to be in.

So why do I say that the enemy is already within?

Firstly we have the very real shift in the investors in GE. The secured dividend kept its stock as a large retail one, made up of pensioners, portfolio funds and individuals looking to have this guaranteed dividend come to them. There is growing fear the dividend might have to be cut again, or deferred in the possible near future. That takes GE out of one set of shareholders that held their shares due to the dividend, these shareholders made up a healthy part of the long-term investor. GE still sees its dividend as part of a new “balanced capital allocation mix” of R&D, CAPEX, the dividend and the company’s underfunded pension fund.  I wonder. This is ever more reliant on free cash flow.

The other investor, the large institutions, more looking for short-term gain, are always looking for rising share prices, attractive assets, good management providing strong returns. They are critical, fickle and demanding. At this moment, we are on the downside of many of these “needs” they expect by holding GE shares.

The type of investor attracted to GE is changing even more. In 2015 Trian Partners, known as activist investors, brought $2.5bn of GE stock, which was about 1.5% of the company. They campaigned immediately on how GE was undervalued and believed Immelt and his management team would not do the necessary things to deliver both a higher stock price and dividend.

“Activist investors” are regarded as the modern day “corporate raiders” of the 20^th century. They are part of a group of investors searching to unlock hidden value and increase shareholder value and have collectively, at their disposal, enormous assets of $120b or more, looking to invest in where they see opportunity. Their goal is clearly to increase their assets full stop.

They set about getting the management of the company to change strategy, they seek seats on their board, organize proxies and draw on the broader sentiment of the investor market to their side of the argument to maximise their position.

Trian Partners has recently achieved a seat on the GE board. They will be a part of a revamped board, that will shrink from 18 to 12, and three of these will be new directors. Recently the board might have been sleeping at the wheel, not seeing the problems as starkly as they have been painted in recent months. One can ask the question: why did they fail in their oversight and fiduciary duties? No wonder many are bailing out.

When you have more “activist investors “they often seek removal of the present company management or demand changes that are a radical shake-up as part of their belief of unlocking value.

The value of such an activist is he does prod a management into a more radical transformation, something GE should have achieved within themselves. It forces a very hard internal look at itself, one that is now being undertaken. The board itself wakes up and becomes the activist. The top management is put on notice.

 It remains within, that the problems still lie and all is clearly still to do.

GE, through its new Chairman & CEO, John Flannery has been responding. He undertook a 100-day review of the business he has taken over and presented his opening view in late November. The reaction has been muted as the market and investing community was expecting far more but there is a growing opinion of greater transparency than in the past.

The present portfolio is in need of a reset with a new guiding set of GE principles. The lighting business they have badly failed to refresh, transportation is in need for some radical rework and change in its market conditions before it shows growth. Both are likely to be sold, without some major redesign. The mergers they have made, have badly failed in generating the synergies or returns expected.

The renewable energy division is in a less than dominating market positions, something GE always prided itself on achieving, in “we must be No. 1 or No. 2 in market share” and their Digital and Additive business divisions are disruptors of ‘future’ promise but not yet of the substance to offset and absorb some of the other internal problems coming from declining profits and market conditions.

The two stars in the GE stable, are Aviation and Healthcare but these are in danger of being “swept up” in the same house cleaning need of greater rigor and fiscal tightness, to extract the essential cash needed for the group to fully function.

GE is restating what makes a GE business.

Its financial, operational and strategic characteristics need to be robust. There are presently far too many businesses caught out that need to prove themselves.

Mr. Flannery has promised to exit $20b of assets over the next 1 to 2 years, these will include transportation, industrial solutions, current and lighting and a host of 10 plus other transactions. This $20b promise is around 5% of the $365b on the books last year, that does not seem much does it? Selling off assets can also add to your problems as competitors “sniff” bargains and push down prices and markets don’t reward those that “blink first”.

His top team going forward is made up of 40% in new positions. The concern is they are all internally appointments and you worry that the same myopic view of the business might still prevail. Flannery said he would change GE’s culture to hold managers more accountable, demand better performance from the businesses and reduce the complexity of GE’s portfolio.

Why have so many “bright” executives (150 top executives) on the inside, why did they not spot some of this “storm”? With much of the same management caught up in this over last few years, coming through to replace some of the past ones they had been working for, are we honestly going to get the necessary challenging and fresh perspectives that Flannery suggests? Questionable.

Flannery promises to radically change the compensation plan for his top 5,000 employees with a higher equity mix and move from 20% to 50% of their compensation. This movement away from cash, into equity, aligns the top managements fortune to the shareholder’s expectations of share price and performance. They are at least working the same oars if the boat is to make headway.

The culture is expected to change.

Will it go back to the days of Jack Welch of stack-ranking, firing the bottom 10%, that would be a disaster. GE has never shed this Machiavellian culture in all the years of Immelt, as much as he felt he had tried it never trickled down through the management levels in a way that GE so needed to transform their culture.

As GE go through significant cost-cutting, reducing investments, research and development will we see a choking off of innovation? I fear so. What happens if the research and development dollar is radically cut or the talent within this area, senses threat and pressure. What does this do to the creative working environment?

As Mr. Flannery attempts to instill his planned “Accountability, Transparency, Rigor and Consistency” and his call for “getting back to basics” we will see a very different GE emerge. They are targeting $2 to $3b in cost-cutting. That is nothing on what it will have to be before the rescue is achieved. Already moves are currently underway to eliminate 1,500 jobs from the Head Office, and a suggested 4,500 from the European organization in the GE Power business. So many, many more to come, cutting into both professional and production staff. Maybe 15 to 20,000 in the months ahead. Will we see operation plants equally shut down with GE Power soon?

Job-cutting sends such a ‘chill’ message throughout the organization for a “flight or fight” reaction. The talent they have attracted might simply ‘melt’ away if they deem the culture goes back to the old GE type. This needs a light hand, not a heavy bringing down of the ax.

Are we about to enter “the death by a thousand cuts period” as internal managers view bold action differently, not experienced in a managing out of the normal,  and fail to really respond to the multiple crises on hand that point increasingly to radical surgery? I fear we might.

Remember that “the enemy lies within” when you have to make a dramatic turnaround involving 280,000+ employees, spread out in a global business, that have been fed a very different message on their ‘dominating’ position. I feel they are more than likely about to learn what “agile and lean” might mean in the new GE way, and let’s see how they ‘react’ and how it is managed, will determine real, lasting change, or simply, reluctant acquiescence, waiting for further management evolution.

It is all very much to do, and GE has little “wiggle” room it seems

 There is an enormous set of “What if’s” in GE, over the coming months. Nothing is certain, ever thing is uncertain, everything is to still do. The jury is out but many will want a guilty verdict if fresh evidence of change is not forthcoming. New evidence of problems will make it even harder. Everything has come into play.  What is being undertaken is one of the most complex, difficult turnarounds in modern business.

Lacking any proven turn around executives that will find this unrelenting in its pressures for the next 18 to 24 months. Execution has never been the strongest at GE, they have bounced from idea to idea, layering on their version of change before it has filtered down to the rank and file. This time it has to be very different.

A turnaround needs to be a strategic transformational one

A culture of turnaround need is as demanding as anything that comes towards you as a manager. It is life changing as it seems in GE’s case, it is life-threatening.  Jeff Immelt in his farewell view of “How I remade GE” commented: “I led through recessions, bubbles, and geopolitical risk. I saw at least three “black swan” events. New competitors emerged, business models changed, and we ushered in an entirely new way to invest. But we didn’t just persevere; we transformed the company. GE is well positioned to win in the future”

What he never stopped to question as deeply as he should have done, was the enemy within, those that resist change, those that chose to interpret it in their way. He should have appointed a Vice Chair of Change, who drove the change he wanted, in transforming GE, all the way through the GE organization. He had within himself this “Be All In” or “Game On” or “Let’s Go” with an enormous sense of competitiveness but he felt it was his to do, perhaps ego got in the way, so for others to follow it never was “full on” or that deep organizational commitment I felt.

In that remarkably ill-timed departure article over at HBR of “How I remade GE” his final words tell a story of promise yet to come:

“It will take years for GE to fully reap the benefits of the transformations. But as I contemplate my departure, I love where the company is positioned. I love what we’re targeting. The company in 2001 was certain that the future would look like the past. The company in 2017 is ready for any future. I’m confident that I’m handing over a company that will flourish in the 21st century. Some people at GE feel that the stock market doesn’t fully appreciate what we’ve accomplished. But I look at it this way: Our task now is just to perform, to execute, and let the market make its own judgment”.

Judgment time is here, the clock is ticking down. To flourish in the 21st century the new management tasked with this turnaround, really will need to challenge everything as the market and GE investors are certainly not in a friendly mood.

Self-belief or Delusional- we are still facing the volatile time

Immelt held a view that what people were calling GE, the 125-year-old start-up was his achievement, well that was a little delusional. They were and are slowly transforming into a digital industrial company that is defining the future of the internet of things but is it changing the very nature of the product businesses that GE are in? Nice vision, only part way there. and certainly, his claim “Change is in our DNA” was perhaps only skin deep. No one doubted his self-belief.  He made the opening comment in that (farewell) article for HBR: “remaking a historic and iconic company during an extremely volatile time” seems to be exactly where we are today. The difference is that this is of GE’s own making, this time they can’t blame others, it is theirs alone to turnaround.

Turning the page with difficulty, whats next?

As we turn the page with some difficulty, I’m optimistic at the strength that lies within the cores of GE; in its people, in its research, innovation, and real resolve to forge ahead. I’m certainly pessimistic at present, I worry that there is not going to be more “bad news” discovery when Flannery not just opens up the cupboards but starts working through the piles of issues he will find that need to be unraveled and reshaped.

Will it get even uglier, not just for investors but for the employees, for the customers to worry over? Well Yes, is my feeling, in all that I have read as it gets vicious as you spiral down, with less and fewer options. Everything seems to diminish. If GE starts pairing back R&D, they will begin to see their talent leave and their renown innovation spirit dry up.

It is far from that all doom and gloom, GE has incredible products and dedicated talented employees

I want to come back and focus on GE and its incredible potential in another post soon. At present, I’m still working on my shock. GE is clearly in the middle of a storm and like anyone caught up in this, it takes time to regain your footing and beliefs, mine as an admirer, included. No, GE in its real core, its product, is far, far, too good to fail.

As it slowly attempts to dig itself out of its own hole with a new strategy, let us see if it is enough to bring it back to health. Much is returning to the basics but recognizing that the recent business model needs a radical overhaul. The hard days to turn it around are still ahead.

Like many, I have a store of goodwill and sentiment for GE. I want to see them come out the other side, recognizable. I really wish I could help as I just feel they, the management, are ill-equipped for managing relentlessly a turnaround of this complexity and magnitude.

They do need all the help they can get and some good luck that sentiment; by investors, by the markets, by their customers. all the vested stakeholders, or their own employee’s, to not make the present position that GE finds itself in, even worse. Don’t hold your breath in the coming months, it will be a tough period.

It is theirs to do, they need to fight much within themselves, open themselves up to healthy questioning internally as well as externally seeking help. As I said, the floodgates are open, will GE survive but in what eventual shape?

***My research for this offering my personal assessment was drawing down from the GE material released in recent months, from management transcripts, numerous investor and analysts assessments and many views; especially countless articles on www.seekingalpha.com and in trade-related papers, or individual viewpoints that I found made a contribution to my own knowledge and understanding. Errors and omissions are clearly down to me.

*** some amendments or new editing was made on 7th December 2018

The post The enemy is already within. The flood gates are open. Can GE recover? first appeared on Building Your Innovation & Ecosystem Intelligence.

It is only when we can truly understand the constraints innovation works under, can we provide more robust solutions to reduced all these frictions and pain points that innovators are struggling with. There are many.

We often can’t seem to break down the rigidity win the organization’s system, to allow innovation to speed up, connect and deliver on its promise. Organizations continue to struggle with obtaining that higher level of agility and flexibility required for innovation speed of response and delivery.

The culture within organizations still is rather more closed-up into the silo mindset and not encouraged to be more open, engaging across functions in collaborating ways. We attempt co-creation to test ideas and try to deploy these but they come against institutional resistance to change. We continue to rely on emotional and gut decision-making and still have not fully embraced the data-driven cultures to make more informed decisions. All these constraints create that pressure to perform. So much around innovation is not optimal.

I was going back recently to the “Theory of Constraints” and seeing how we can apply this to the innovation problems we all seem to suffer from today in our organization’s innovation approaches. Do we really evaluate all those most important limiting factors that stand in the way of innovation? I do not think so but we really should.

These constraints are the ones that stop the innovator from achieving his or her ideal goals or even find solutions that re-equip them. There always seems no time to provide a systematic approach to improving the constraints identified, so they become no longer the limiting factor and can unleash innovation to travel down the value creation pathway. This surely must change?

It seems to me no one working in the innovation system has the time to relate to the constraints and have enough understanding of how to resolve them in a comprehensive understanding of the interconnecting parts of innovation and its management.

Innovation is being held back by many not understanding and resolving the constraints it is under. Now that is easy to say, hard to change systematically but until we understand the innovation process we stay locked into disappointing innovation outcomes. There is a time for a change, so why not now?

I am staggered at the lack of reflective time innovators have, they often simply grab those ‘on the go’ solutions, pleading little time for reflecting, they become utterly reliant on outside advisors, they move from one internal issue or problem to another without any real learning understanding to build this into a better innovation system.

Innovators simply do not have the time or may I say, the complete understanding of how it all should work. They keep praying they can keep balancing out all of the projects within the innovation portfolio that leaders are expecting but equally constantly constraining. Leaders constrain by not giving enough resource, not providing enough attention to the innovation development journey themselves in support or engagement, as well as back away increasingly on the tough decisions and risk-taking expected as part of their job to determine. Innovators have to absorb much to make up the slack just to keep the current innovation engine running.

A new way of looking at solutions to the real innovator’s dilemma – a lack of alignment and disconnects, move to the future

In a piece of research undertaken by Capgemini,  “The digital culture challenge ” in one part they looked specifically at the gaps between employee- leadership understanding over key innovation needs. Although these gaps were specific to the new digital culture challenges, some interesting view came out that need an urgent alignment. They point out the huge internal gaps or divides between leaderships understanding of how innovation functions and the employee’s, whenever initiatives are enacted, usually in piecemeal fashion, the research indicates these real differences.

This lack of collective understanding deals the innovator with a really bad hand. It is these “perceived” gaps that lie the urgent need for the innovator to bridge. They need to give these a far higher level of attention, otherwise, they fail to gain the common understanding. We need to align these gaps quickly to allow innovation to support future needs.

Why I chose the digital perspective to connect and  highlight the pressure on the innovator?

I chose this digital culture perspective here as digital is the “big elephant in the innovator’s room” that is increasingly adding further complexity to the innovator’s dilemma of reducing the pressure to deliver. Digital is further eating into our innovating time and as we know (or should do) time enhances or stifles (good) innovation. It is the pressure of time that forces compromise, losses of valuable resources or funding, or keeps the project going as the pressure-cooker of expectations builds the closer we get to final innovation outcomes. We need to break out of existing constraints and build innovation differently. Digital is key to this.

Today the innovator is attempting to absorb all the pressures they can handle but something has to give- right?

The innovator is often highly focused, creative and energized- thankfully. They increasingly would love more novelty and risk taking to be part of their activities but feel these constraints bearing down on them to steer innovation in predictable ways. Sometimes these constraints are self-imposed in the deadlines and commitments they are forced to make, in organizations need; in expectations in growth, staying competitive or being responsive to all the constant changes occurring in the market. In equal circumstances, there are much ‘super-imposed’ on them to perform with the minimum, pushed to the maximum.

I am often surprised at the deep commitment of individuals and their own endurance levels in tough situations. They seem to be in a constant “stretch and strain situation” and have no time to really stop and be reflective and capable of making the changes they need, to fully resolve these major constraints that are limited their performance. Often it is just multiple sticking plasters or hired external consulting help to bridge the shortcomings.

Innovators inside organizations increasingly rely on outside help and where does that leave the internal bench strength needed for the internal sustaining need of innovation into the future? No where, it all leaves when the consultant leaves. No, the pressure does build on the innovator who often pushes that down on to the outsiders shoulders with “well I’m paying, you perform as agreed”. We need new innovation approaches internally resourced, not externally ‘boot strapped’

Where can we break into their constraints to lift the pressures? Food for thought.

Let me return to Cap Gemini’s report for Digital Transformation. I think it does a good focal point job for the innovator to work through. It offers a future pathway out of his existing constraints. If he/she can get the recognition and adoption of these seven dimensions (identified for a digital culture- see below) then perhaps they might have a fighting chance to systematically improve the limiting factors (of major constraints) standing in their way to drive innovation. By knowing the overarching goals that align, integrate and determine what will drive the future business, then the innovation solutions orientate towards the customer-facing needs to deliver through. The pathway becomes a transformational cultural one.

The innovator has the potential to provide the external facing solutions that relate and deliver on the organizational pathway, built around these cultural needs. Leadership will recognize the essential link of digital need and innovation solution and progressively gaps get addressed to deliver on this more customer-driven mindset. The innovation process becomes core to delivering on these needs. Through this, it attracts resource, attention, and engagement.

This alignment to a more digital driven customer mindset allows the innovator to take the brakes off and deliver innovation to supporting the needs of these seven internal dimensions through providing external-facing solutions. A future orientating one, having digital driving solutions where innovation becomes central to deliver upon. It just might liberate innovation and it might give innovators the attention, resource and board understanding of its critical part to play in the future design and outward facing solution set into the market. Aligning innovation solutions to these dimensions becomes a sort of measuring against a litmus test.

In summary

There are increasing pressures on the innovator to perform, yet they are under increasing constraints. They feel stretched and strained in the expectations but hampered by the lack of a comprehensive understanding of what is constraining innovation.

I have just offered here some ways to break into the important limiting factors holding innovation back, they are future facing, supporting the digital transformation pathway in providing customer-facing solutions that add value and engagement. It is transforming the innovation of today into the future horizon vision required by the organization. Innovation solutions need to orient towards this. A three horizon transformation that allow a ‘growing future consciousness’ and a way out of the present set of constraints.

It is my outside-in perspective and far from comprehensive but our goals must be to find ways to reduce these constraints and reflect on ways to set about systematically improve the innovator’s environment and conditions they, the innovators, operate under.

I felt in reading this report by Capgemini it offered a way to break out of the constraints and helped give me a new innovation pathway out of the present position, that is often found in most innovating groups.  It might offer a way of breaking the chains of constraints within their innovation world. Innovation focuses on transformation, not the incremental.

Do you see the links I have tried to make here to break out of our existing innovation constraints?

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The post The Pressures Placed on the Innovator first appeared on Building Your Innovation & Ecosystem Intelligence.

This article did disturb me, it triggered a number of validations in my own mind. Once you get past the opening rant about the infamous Juicero juicer, that has now been used as an illustration of how investors funded something that automates something that you can do faster by hand.

The article opens up the doors to questioning much that is going on under the Silicon Valley umbrella. The juicer got funding of $120m from a number of blue-chip VC’s but it was not this that actually disturbs me, it was this “ant-innovation” tag the writer was attaching to (North) America.

The article goes deeper in questioning where we are in our innovation thinking. We do have a real innovation growth dilemma that we can’t lay at the door of Silicon Valley alone, it is part of the Western world’s current sickness. It has lost that ability to take a positive risk in so much, ‘kicking the can down the road’ for others to resolve, be these societal, educational, health, infrastructural or institutional reforming and so much more. All really important innovation opportunities.

Has the US become “profoundly anti-innovation” as stated?

The writer suggests

“At the root of the problem is the story we tell ourselves about innovation. Stop me if you’ve heard this one before: a lone genius disappears into a garage, preferably in Palo Alto, and emerges with an invention that changes the world. The engine of technological progress is the entrepreneur – the fast-moving, risk-loving, rule-breaking visionary in the mold of Steve Jobs.

This story has been so widely repeated as to become a cliche. It’s also inaccurate. Contrary to popular belief, entrepreneurs typically make terrible innovators. Left to its own devices, the private sector is far more likely to impede technological progress than to advance it. That’s because real innovation is very expensive to produce: it involves pouring extravagant sums of money into research projects that may fail, or at the very least may never yield a commercially viable product. In other words, it requires a lot of risks – something that, myth-making aside, capitalist firms have little appetite for”

I started to identify with the second paragraph of this. Real innovation is very expensive to produce and it is the appetite for risk that has been lost in America as it has been in Europe. That I strongly relate too as we have certainly lost that corporate ‘will’ to pursue much that can provide significant breakthroughs in products and new services, but is this because it is such a volatile, transforming time? Can we be bolder and more determined to differentiate ourselves or do we stay tucked into the pack, like a long distant runner, waiting for something (someone) to break away, hopefully, able to equally ‘kick in’ and stay in touch, still hopeful we will be in a position to win but mostly remain a fast follower only?

Are we committing suicide with a lack of innovation? Are we crushing real innovation?

Is it is suggested in the article, the USA is showing signs of a country committing economic suicide?” The writer’s observation: “Innovation drives economic growth. It boosts productivity, making it possible to create more wealth with less labor. When economies don’t innovate, the result is stagnation, inequality, and the whole horizon of hopelessness that has come to define the lives of most working people today”. 

I certainly can’t disagree with this, that Companies do need the breakthroughs to build their business but they do seem very reluctant to build this risk mentality in recent years. Innovation has been taking a back seat to shoring up our balance sheets, delivering increasing profits and shedding people and ‘unproductive’ assets that do not fit the business today. The longer-term has equally been put into the back seat, alongside innovation.

The sad loss of the real innovation risk investment?

Breakthrough innovation needs heavy investment, the writer reminds us:

“So where does the money come from? The government. As the economist, Mariana Mazzucato has shown, nearly every major innovation since the second world war has required a big push from the public sector, for an obvious reason: the public sector can afford to take risks that the private sector can’t.

Conventional wisdom says that market forces foster innovation. In fact, it’s the government’s insulation from market forces that has historically made it such a successful innovator. It doesn’t have to compete, and it’s not at the mercy of investors demanding a share of its profits. It’s also far more generous with the fruits of its scientific labor: no private company would ever be so foolish as to constantly give away innovations it has generated at enormous expense for free, but this is exactly what the government does. The dynamic should be familiar with the financial crisis: the taxpayer absorbs the risk, and the investor reaps the reward.

Again I feel uncomfortable and I would love to disagree with this but it is true in the majority of cases. Truly innovation breakthroughs have come through Government investments. When you look back or read it does seem true that most of the innovation breakthrough for transforming have their roots in publicly funded research. As the writer puts it (again):

The advances that created what we’ve come to call tech – the development of digital computing, the invention of the internet, the formation of Silicon Valley itself – were the result of sustained and substantial government investment. Even the iPhone, that celebrated emblem of capitalist creativity, wouldn’t exist without buckets of government cash. Its core technologies, from the touch-screen display to GPS to Siri, all trace their roots to publicly funded research”

Getting to the longer-term disturbing part – the decline is in ‘pure’ scientific R&D

Yet, and this is the really disturbing part for me, the truth lies in the declining investments that we see being made in research and development. Both Government’s and the Private Sector has been constantly reducing the research funding for years. Recently in a PwC Strategy & report “2016 Global Innovation 1000 Study”  it was reported that there was a 19.5% decline in allocated funds to products but it is being redistributed it seems into software and the digital transformation journey as the focal point of new investments. The truth is we actually need both for a better transforming future.

Here in Europe, we have seen steady declines in R&D investment. They are at worrying levels as we lose those that are the brightest as they go where the R&D investment seems healthy and for that, we need to look East my friend.  In both the US and Europe we are seeing falls in funding research as a percentage measure of the GDP, it is steadily declining. Science funding is in real decline and that does not auger well for the future prosperity of our societies.

Well, why are we at this point? it is a combination effect in real innovation decline.

It is this combination of Short-termism that businesses have become caught up in. Also, how VC’s are looking for bigger and bigger returns and earlier payouts, pushing to see an exit strategy more towards 3, rather than in the past of 5 years or even more. This adds to the pressure to grow quickly, spending more of those funds to scale, delaying often furthermore groundbreaking breakthroughs that build on the initial insight until the IPO or acquisition by others takes place.

None of these factors are actually helping stimulate real innovation growth, they are relying on geographical expansion or product extension. New companies are also getting insanely overvalued and basic research continues to suffer from this redirecting of funds across the broader spectrum of funding.

Then you have companies like Apple sitting on an absolute mountain of cash, presently over a quarter of a trillion dollars and many commentators constantly asking where is their next big innovation going to come? They have the means but maybe not the innovation desire anymore, it will come externally by acquisition and not internally it seems?

Over 1.2 trillion dollars of overseas cash is sitting outside the USA held by just twenty companies of the likes of Apple, Microsoft, Berkshire Hathaway, Pfizer, GE, IBM, J&J, Cisco, Merck, Google, Exxon Mobile, P&G, and Citigroup. US companies hold more than $2.4 trillion in profits abroad for various reasons, all supposedly waiting for a tax law change to come back in. Will these be invested in innovation?

The writer of this Guardian article rightly stirs it up even further by asking about Wall Street extracting wealth by companies constantly busy in buybacks. They are paying out increasing dividends rather than invest in risk and their capacity to really grow, apart from picking up the acquisitions of all these insanely overpriced success stories, to keep being seen as “in the share price game” but also transforming, really? Can that change, will that change to wealth creating through innovation, job creation or new capital investments?

The West countries are certainly not growing their economies in new dynamic ways

We are struggling with really bad growth in most of the Western economies, we have seen a hollowing out of the middle class, we have seen real wages drop and wealth constantly heading ‘north’ to the ones already rich.

The writer finished his piece by asking “is capitalism eating itself alive?” I find that challenging, perhaps it is. The article is a disturbing piece for me because much of it is sadly true and that is the most uncomfortable part. We are not investing in real, breakthrough innovation, we are ‘burning’ our resources and money in ways that are leaving us increasingly devoid of a future where real sustaining growth lifts us all up, wealth is being unevenly distributed.

So are we committing just economic suicide or increasingly political suicide for those in power if we don’t change the dynamics of investment? Or is the entrepreneur that promising engine of our growth we all encourage, are they going to benefit broader groups of us all or just a selected few?

I am left wondering

I just sometimes wonder if we are all caught up in the success stories that are occurring but it is like the shop window we all stop and look into, we are simply gazing at what we ourselves are not able to achieve? Innovation can be so much different if we allow it to become part of all our lives. Yet it is not being allowed to become just that, part of our jobs, our way of thinking and evolving.

So, is innovation liberating us or keeping us caught up in a trap because we are investing our innovation dollar or euro in wrong ways or simply just hoarding them? It seems as science declines, technology gains but is the balance getting us all out of whack, delaying any promising future? Any thoughts?

Additional: My sparring partner on Innovation, Jeffrey Phillips, added this observation which I can only agree with: “The government does a lot of early ground breaking research but needs the private sector to turn it into usable products and services. Then other parts of the government create regulations and compliance issues that slow adoption of the new product”.

It seems commercialization is everybody’s problem.

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The post Are We Crushing Real Innovation? first appeared on Building Your Innovation & Ecosystem Intelligence.

Often this reluctance to dispose of these old systems, processes and inadequate frameworks is holding innovation back.

I would argue that perhaps many of our current innovation practices are ‘frozen’ in past times and they significantly slow us down, in a world that is becoming one built increasing on speed, flexibility and adaptability.

We lose precious time as we should be forward looking. constantly learning and experimenting with new concepts and approaches to innovation and what and where these can bring in new growth, sustainability and value to our organisations.

Where does design thinking, lean management, the early thinking to focus more on changing the business model come in? These need to be deliberately designed into your innovation process, not used in a random, ad-hoc approach or as sideshows. They need designing into a new innovation system so they become commonplace and required.

Do innovation labs feature as part of the ongoing innovation development process and how are you building the customer experience? Are you approaching these in well-established structured ways as the defined innovation system or are you constantly refreshing and challenging the system by being adaptive, experimental and fluid in how you manage?

Often we don’t allow ourselves the time, presently seen as a luxury, to call for a comprehensive review of our innovation infrastructure, yet we ought to. Innovation thinking and its approach in design are constantly evolving and we should be keeping pace with these constant developments to realign the latest thinking and the internal processes.

We also should  expand out our thinking on innovation beyond the present, lessen the constant looking back and push it a little more towards having a greater emphasis on our future foresight, one that can deliver fresher vision, built on bolder and more rewarding challenges for the pursuit of different growth options .

We need to truly capitalise on the emerging practices of innovation, not just based only on yesterday’s experiments and successes or achieved through outdated past behaviours and thinking.

Where do we start?

Firstly you have to start out with why you feel a freshening up should be required, should this be radical, distinctive or incremental. Are you getting so caught up in analysing all the pieces, you are forgetting the bigger picture?

What do you actually want to achieve that takes you closer to your aspirations, not just immediate goals? Can the way you conduct innovation today meet that strategic challenge? Does it ‘advance’ on your current position? Are all business units working on the same system, are they all advancing at a steady speed to a greater maturity? If not, what is holding them back? Do we know, have we asked?

There is a host of reasons ‘renewal’ might be needed. Today, when markets are especially tough, looking long and hard at what you have and jettisoning what you don’t need becomes essential to re-position yourself as leaner and more flexible. There are many pressing needs why you have to ‘shape up’. Don’t ignore the need for renewal, it needs to be a constant in today’s rapidly changing and challenging times. So often when we have finally decided to establish a system of innovation it is already out of date. The use of technology is equally a curse as well as an enabler.

A need for a critical and fresh evaluation of your innovation process

There comes a time where any structure, process, culture or organisation needs a radical rethink and innovation is no different. Please don’t just simply bolt on the next bit, I would argue we need to reflect on this and think differently, re-equip ourselves to meet the present and future challenges and that needs stepping back often and with a fresh clarity of purpose as our markets, customers and innovation approaches are in such constant flux and change.

To achieve this more radical departure from your existing viewpoint, you do need to look at a more structured, methodical approach to your renewal of innovation. Constantly designing, adapting and redesigning into this processes and the required structures so you can keep a more sustaining evolution to your innovation practices. Renewal and legacy reduction become second nature, a constant in your life. Constant upgrades and jettisoning the old approaches as you learn and evolve.

Making the critical steps needs structuring.

Suggesting a structured approach to renewal is not an easy journey; it takes dedicated time and incredible strength of determination but it becoming critical to pursue. The rewards come through an organisation that emerges from today’s ‘uncertainly’ equipped to be more resistant, flexible and agile, so as to seize emerging opportunities quicker, at tomorrow’s new innovation speed, built on latest thinking, design and ‘bleeding edge’ tools and frameworks  .

An innovation guide in this is what I call the ‘sense of renewal’ framing, partly based on these suggestions mentioned in that post. It can often help you think through the options, evaluate the existing and compared with the preferred as it gets you closer to the need of your innovation design. So developing a basic problem recognition diagnostic tool that frames this thinking through can help.

A more structured and systematic approach must be taken

I would recommend for building a renewal programme that you can work through a step-by-step approach, enabling clarity and understanding as you go; so everyone involved can see the problems, challenges and then actively contribute to the solutions. This should be our goals always in renewal programmes, inclusion, be these to address societal or business challenges.

What this step-by-step programme does call for, is a very structured, comprehensive investigative approach across the organisation. firstly to build the momentum for recognising what a sense of renewal can bring as important for the future, and then secondly, seeing an emerging clarity for this future built upon a sustaining innovative culture that all contribute and become involved in.

The need for making the case for renewal and charting the path towards the solutions is no different from any other corporate initiative. Making the commitment and getting others to sign on is sometimes hard, but essential. Seeking out places of ‘duplication’ and latent redundancy is also necessary to build into any renewal programmes.

The post Dealing with the innovation legacy lying within your business. first appeared on Building Your Innovation & Ecosystem Intelligence.

One where it is offering up a healthy mix of rain, stronger sun, a little flurry of snow and some heavy wind too.

It can constantly confuse us as it can rapidly alter within the same 24 hours to often keep the heating on, when it should be switched off and visa-versa. It can be an uncomfortable month of adjusting constantly, second guessing of what might be ahead.

On the innovation front I have been experiencing the same feeling of adjusting to uncomfortable days.

First, I was reviewing a report from Accenture, on how US big business was treating their innovation as more left to chance in their report, with my summary here on cloudy execution, my snakes and ladders. This ‘rocked’ some of my beliefs, ones where I thought we actually were making the progress on innovation understanding. It seems this is not the case, we are going backwards and then my month got suddenly worse from a report from Deloittes.

The Deloittes report was on how leadership within Boardrooms under  my”uncharted waters”, was about how our boards are struggling to get their ‘collective heads’ around disruption and how innovation can, or cannot, dig them out of the threats they are facing. They are being disrupted constantly across the business. They are caught between fear and uncertainty on what to do and clearly that is not a comfortable place to be.

Both reports, as I was reviewing them, left me a little depressed to say the least and it just continues…..like the April weather…. leaving me totally uncertain and then what pops up….

Adding to this innovation reporting mix- Innosight provides a further angst report.

So a further report, this time from Innosight, throws even more angst into the boardroom, adding further into this mix of fear, caution, grim reading on a lack of innovation commitment facing larger organizations. The report from Innosight is in their Spring Insights, called Corporate Longevity: Turbulence Ahead for Large Organizations it just added more worrying news from my perspective on innovation lack of top level progress.

I again buckled up for a further reading of unpredictable innovation resolutions, just like this April weather, all raining down on us from those not heeding, understanding or changing their thinking. In many boardrooms they are not wanting to tackle in fresh ways the future and work towards embracing all the disrupting forces swirling around at present. They seem to want to hold on and not let go of the past .I’m getting really innovation weary from all this

So three reports I thought “oh no”- the grim reaper is truly upon us.

Innosight’s report starts with “We’re entering a period of heightened volatility for leading companies across a range of industries, with the next ten years shaping up to be the most potentially turbulent in modern history.”

Reap what you do not sow Mr Boardroom member- uncertain futures, badly invested in

So we all know that 50% of the current S&P 500 will be replaced over the next ten years, didn’t we? Well I did from past readings (clever me) but it is never nice to be reminded again. Not because of its reality but because of the leadership we have in place in many of these organizations is in the denial it will happen to them.

That is what is for me so upsetting. They earn Squillions and screw the long term health of the organization totally up as more often the case, because they were not even focusing on any belief of the future, just taking in the rewards for the immediate present. They could have done something about it but seem incapable to show the level of leadership to achieve this, just why, why is that?

With so much additional disruption coming from technologies, from start-ups, from intense M&A activities and having this ‘being overtaken’ by more agile, quicker growing companies just piles on the pressure within the boardroom but ignoring its threat as “it will not happen to me” without the boldness, decisiveness and intent to reinvent the organization to catch the different ‘waves’ of opportunity is sometimes bordering on criminal, well for me- what about you?.

Innosight in this report has a great passage

“Viewed as a larger picture, the lifespan chart serves as a barometer for marketplace change. And the stakes couldn’t be higher. Shrinking lifespans are in part driven by a complex combination of technology shifts and economic shocks, some of which are beyond the control of corporate leaders. But frequently, companies miss opportunities to adapt or take advantage of change. For example, they continue to apply existing business models to new markets, fail to respond to disruptive competitors in low-profit segments, or fail to adequately envision and invest in new growth areas, which in some cases take a decade to pay off”.

This sums it up pretty well for me. We have failures all around us going on due to this lack of imagination, a poor coherent longer-term vision, a lack of confidence to achieve any form of transformation lies within the organization and so it becomes incapable to undertake the transformation that it needed to undertake, due to continually miss the opportunities offered to evolve.

Leadership still lacks real innovation commitment, the linkage to growth, to fending off disruption, of tuning into current and future needs, the message of embracing it has simply not got through to those within the boardrooms; one that the comprehensive management of innovation can offer significant improvements on present performance and they need to fully take hold of it, to learn and leverage, to explore and exploit, in imaginative and breakthrough ways.

Innovation can offer a pathway out of the existing position that many organizations are facing, ones of poor growth, limited sustainability and growing erosion of their existing market positions, often spiraling down, with cutting existing costs seen as the only option. It can be so very different if they wanted to fully engage with innovation. Others are reaping the rewards of their own inabilities in the boardroom to commit the time needed to practice innovation.

The question is “will it change?” If so how, why and when- not with these answers.

The Innosight report points out in the organizations they surveyed of 91 companies with revenue greater than $1 billion across more than 20 industries across the world, the shocking news  that only 24% have a growth strategy with a time horizon of beyond five years, 16.5% report having no formal growth strategy or a growth plan at all as they are seemingly “too busy executing”, “really don’t have time to focus on it” or “we don’t have a good process for formulating a growth strategy that we are confident about”

Then you get the “but of course we are committed to long-term innovation” but it is our “day-to-day decisions that undermine our stated strategy to change” Oh for heavens sake can this really go on? To make substantial change when you are facing the type of change and threats occurring today can easily take up to a decade to fully realize.

So the future continues to be pushed off, growth stays morbid and we resort to simply cutting costs, lowering choice, quality and resources to handle this, we continue to outsource our future to others, who are more than ready to take it on and learn, so as to take your place eventually.

So let the bell toll- let’s say goodbye to 50% of who we know today, you deserve it.

It leaves you utterly sad, even depressed. Innosight offers these thoughts below as a worthwhile thought, when so many of these larger organizations are not heeding or reading about their serious lack of commitment to innovation and the future. They seem apathetic or incapable to comprehend what this eventually means to the future of their organizations.

So Innosight suggests: “Leaders have to confront what might be called tensions, balances, or, even in extreme circumstances, paradoxes. They must optimize today, and discover tomorrow. They must be decisive and bet on moonshots, and defer to experiments. They have to focus, and enable serendipity. They have to leverage the core, and break its constraints”

It seems many just simply do not have the appetite to grow, to look towards the future when their own investment and return is tied mostly to the present.

It just does not seem boards are confident in innovation. There seems a reluctance in wanting to take ownership for innovation, one encouraging and investing more confidently in an evolving/ learning series of experiments to evolve the future of their business in iterative, exploratory ways. It is not a ‘core’ discipline or focal point as innovation continues to have been left to others outside the boardroom. That needs to change.

We are left to judge each company by deciphering ‘the smoke and mirrors’ offered that are claimed to form their “unique” innovation culture, to attempt to determination the staying power and their true belief and undertaking in a future, and make our judgement- mostly it should be yank our money, run like hell, until this future can be well-articulated and well-backed in action.

As companies sadly stick to their historical core as the business, falling to take the risks, invest in the new growth ventures and experiments to build towards a better shot at the future, so I say “just simply go, fade away and leave a puddle as your mess or contribution, and forget the thrill of reinvention and providing a ‘sense of destiny’ and taking pride in exploring more than simply exploiting, often just for your own personal gain”

So Goodbye, many of you in leadership positions, as you do not serve innovation well for its potentially exciting future. You are simply letting down the communities, the stakeholders, your customers, our futures, by not heeding all these ‘darker’ messages coming out of Accenture, Deliotte, Innosight and countless others telling you to change or die!

The “Grim Reaper” is knocking on many boardroom doors. Let him cut away the dead wood and we can all move ahead.

The post No Company deserves to survive with apathy in its future first appeared on Building Your Innovation & Ecosystem Intelligence.