Achieving innovation fitness is a journey- to get there we often have to manage the switchbacks as we build our capabilities and capacities to innovate.
Getting Started – Understanding the Needs & Imperatives of Innovation Fitness
Why we must travel this critical path for Innovation.
The meaning of dynamic capabilities and innovation fitness landscapes
Merging the theory with practical reality to produce new outcomes and positive results.
Focusing on resources and performance – why is this important
The problem is knowing what we have and what we really need
A firm’s ordinary capabilities are the ones that enable us to perform efficiently and effectively, those essential routines and practices that often require having a high level of technical need supporting these activities.
In contrast, dynamic capabilities are those higher level competences that determine a firm’s ability to integrate, build, and reconfigure both the resources and competences to possibly shape, have the power to transform and then be deployed to meet rapidly changing business environments to take advantage of these changing conditions.
Recognizing the importance of Dynamic Capabilities
Dynamic capabilities are about selecting the right things to do and getting them done, while ordinary capabilities are about doing things right. The former implicates dynamic efficiency, the latter static efficiency.
Organizations have been focused for far too long around the importance of financial capital. It determines and drives organizations destinies. We are caught in a constant focus upon our achieving a return on our (financial) capital as our measuring criteria. Organizations strive for improving their ROCE, RONA, IRR, EVA and a host of other financial measures.
As Clayton Christensen has been arguing the agenda of organizations begins and ends with the “search for numbers”. I think there is a time for changing this, we need to search for the knowledge that makes-up eventually the numbers.
There has been a distant voice for some time putting forward the need to appreciate and value the other capitals sitting within organizations. Much of the discussions have been housed under the term “intellectual capital” which denotes the sum of knowledge made up and contributed by our human assets, our organizational structures and our relationships that are developed.
These are the ‘capitals’ that transform into economic value through organization action. It is the financial capital that simply finances this.
Recognizing Dynamics and Building Innovation Fitness
The work of David Teece is hugely influential on exploring dynamic capabilities. It was my reading of one of his early papers, published in 1997 (with Gary Pisano and Amy Shuen) that got me started down the dynamics path and my quest to identify the innovation landscape required by each organization to become innovation fit.
Teece’s concept of dynamic capabilities is a theory about the source of corporate agility: the capacity (1) to sense and shape opportunities and threats, (2) to seize opportunities by mobilizing your resources to capture new value from those opportunities, and (3) to maintain competitiveness through enhancing, combining, protecting, and, when necessary, reconfiguring the business enterprise’s intangible and tangible assets by transforming them for continuous renewal. This makes organizations potentially dynamic.
Recognizing and adapting to today’s and tomorrows challenges.
The challenge is how to position or reposition today’s resources for tomorrow.
The emphasis needs to be placed upon building distinct capabilities for innovation success.
Announcing the building of dynamic innovation capabilities for your fitness
“the dynamics within the existing capabilities need to be fully understood and then you need to design the new capabilities on clear understanding of the direction, vision and mission required from innovation to be more successful in meeting the strategic needs”.
Irrespective, there are big, consistent growing questions still nag away in the CEO’s mind on innovation
Q: “What and where do I place my limited (and scarce) resources to maximise the impact of our innovation efforts and how can I be sure?”
“What are those capabilities that generate differential advantage?” How can the CEO or CIO identify the links and connections they want to make their innovation activity align more with the overall capabilities system they have in place? Where does the CEO place his ‘bets’ to get the limited resources he has available aligned to gain this better return on the investments in innovation?
Can we identify a common set of critical innovation capabilities?
I’d like you to work through these ‘thoughts’ to begin to evaluate the value of knowing your innovation fitness and what makes up your distinct dynamic capabilities:
Mapping out your innovation terrain
By firstly mapping out your innovation capabilities to the task at hand enables you to understand and relate to what is needed – we call that the context for innovation.
Innovation Fitness Landscapes helps in this task by identifying the opportunity spaces on where you need to focus your efforts‐ and applythe appropriate resources to navigate the terrain.
The Nine Steps needed for developing an understanding of your innovation capabilities to make them more dynamic.
This is my adopted approach to work through this in a systematic way.
No question, this is designed to make sure those involved take their time working through the different levels of understanding needed. A journey where you ‘transform’ your innovation capabilities is likely to be realistically over twelve months or more. So much does get in the way to deflect you, to block you, to divert you. This is the nature of organizations, any approach to making ‘transformational’ change, and this is what this is, needs to go at the right speed and deal with the obstacles and constraints in thoughtful, well designed and clear ways.
Why is this potentially a long journey?
The steps in building innovation capability
Well to appreciate what you require you must firstly need to understand not only what you have but what it currently provides.
Then you need to construct a clear strategic position of where you want to go in your innovation activities and these are totally different and unique to each organization.
Any journey like this needs to be well thought through, considered for all its implications and potential impact and disruption to what is existing.
It is a journey you have to want to travel and your fitness levels need to be progressively built up.
So these steps may have ‘individual wrinkles’ to them but most probably follow the same innovation discovery pathway.
When you climb mountains, the fitter you are the better you climb. Equally the higher one wants to climb (innovation ambition), the harder it becomes to climb to those new levels. Our ability to climb required two clear points of understanding.
Firstly what we are trying to achieve so we get a rough idea of what we want to achieve, in strategic objective, in our innovation goals and in aligning them. Secondly we require knowledge, a clear working knowledge of how innovation can work for us.
We learn by exploring, the more peaks we cover we improve our knowledge and experience. We build our knowledge landscape. The more we understand each other, the more we can collectively climb and scale our innovation fitness. The more we learn and scale the more we can explore sub peaks on smaller, experimental levels, all contributing to our growing knowledge and fitness to innovate.
Finding practical capability identification requires a given approach:
Initially a more path dependency one is explored, searching for existing routines, capabilities and knowledge (more backward looking) for factors that seem to have affected the past success. This then allows us to explore:
Identification and classification of existing capabilities
Identification and classification of required future capabilities
Then, prioritization of these capabilities in light of the core capability criteria and strategic goals.
The Gap analysis (self assessment and external clarification/ comparison)
This is achieved in a mix of interviews to find the Strengths & Weaknesses and the nature of required future core capabilities felt necessary.
In any competitive situation, the survival of the fittest dominates (Darwinian). Knowing your innovation fitness is essential in this race. The question often raised is where do I focus my limited resource to achieve a better fitness to be successful at innovation?
Mapping out your innovation capabilities to the task at hand enables you to understand and relate to what is needed. Innovation Fitness Landscapes identify the opportunity spaces on where you need to focus your efforts- the appropriate resources to navigate the terrain. The greater the ‘fitness’ transforms your landscape potential into accelerating opportunities into final tangible outcomes.
These critical factors give higher value potential or ‘peaks’ that are more valuable to your needs. The more ‘rugged’ the landscape can also determine the greater fitness for the rate of innovation. The height of the peaks in these landscapes, the greater value placed upon them, illustrates how intense the innovation challenge is, and the number of critical peaks shows how diverse it potentially is.
