Building bridges between stocks and flows

Lavertezzo ponte dei saltiI really enjoyed this thinking about stocks and flows that are necessary.

Let me share the part that works really well for me. This relates to approaching social media but it equally applies to building innovation capital, it is recognizing and then building the stock and the flows around innovation.

Robin Sloan does a brilliant job of explaining this:

“One of the biggest takeaways was the concept of stock and flow. Do you know about this? Couldn’t be simpler, and really, it’s not even that much of an a-ha.

There are two kinds of quantities in the world. Stock is a static value: money in the bank, or trees in the forest. Flow is a rate of change: fifteen dollars an hour, or three thousand toothpicks a day. Easy – too easy.

Recognizing the different capabilities to develop and grow

IFD Complexity WebA 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.

Organizational legacy often chokes innovation

Legacy often chokes new innovation
Legacy often chokes new innovation

Often organizations are weighed down by legacy; it chokes off innovation and much of the potential creativity. This comes in many forms; in its culture, in its history, its core markets or products, in its systems, structures and processes built around innovation practice.

Today, we are confronted with a very different global market place than in the last century. National borders and regulations built to protect those that are ‘within’ in the past have rapidly become a major part of the ‘containing- restraining’ factors that are rendering many previously well-respected organizations as heading towards being obsolete and not in tune with today’s different world where global sourcing determines much.

They are increasingly trapped in declining markets, starved of the new capabilities and capacities to grow a business beyond ‘traditional’ borders, so this means they are unable to take up the new challenges that are confronting them. They see themselves as reliant on hanging on to the existing situation as long as they can, often powerless to make the necessary shifts, failing to open up, finding it increasingly more than difficult to find the ways of letting go, of changing. They are trapped in legacy.

Greater fitness in innovation offers more value creation potential

The greater fitness you achieve equates to more value creation potential.

Achieving more dynamic innovation fitness
Achieving more dynamic innovation fitness

The ability to inter‐couple landscape entities, to constantly combine the different capabilities in different often unique ways and exploit individual interactions alters your dynamics to innovate and does improve repeatable cycle times from this constant recreation potential.

The key is to know what these capability points are – by dynamic linking those that are important and ignoring those that are not.

The value of fitness landscapes as part of your innovation awareness

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
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 apply the appropriate resources to navigate the terrain.

Innovation tension lies in our layers and structures

Reduce the tension in the layers or structures for innovation to emerge.

A really hard part of managing in larger organizations is in managing the layers and competing forces. Hierarchy dominates the speed of what we do.

The tensions surrounding innovation
The tensions surrounding innovation

Often we forget to reinforce the very design within our organizational structures, we leave role structures incomplete and uncertain and we set the deliverables in often ‘woolly’ ways so we can side step the often intransigence within our organizations way of working . This just further promotes uncertainly and it is not an adaptive organization but one left open so the leadership can side step when it suites their purpose.

In leaving this so open to ignoring one minute, using it as the ‘whipping boy’ the next they slowly immobilize those underneath. These create unnatural built-in tensions and often create a shearing effect.

They grind against each other, like tectonic plates that force further disruption and upheaval.

Today organizations essential design is for openness, agility and flexibility

Integrated Networks need to be dynamic
Integrated Networks need to be dynamic

There is a need in any framework design for building a new integrated innovation network that it needs to have openness, agility and flexibility purposefully built into it. It is more than likely that in the past design, the legacy within existing systems needs radically dismantling and redesigning to reflect the multitude of changes happening.

The reality today is we have to tear down much of what we have built up and in place to reflect the changes occurring all around us. We need to account both internally, in making a new structure for crucial decisions, based on those far more dispersion principles but also on the external, in how you will be reacting to competition and the challenges being presented in changing market conditions.

Nine steps leading to understanding your dynamic innovation capabilities

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?

Nine steps in building innovation capability
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.

Continuing the Innovation Journey- connecting the points

IFD 100 pc 1I’m constantly learning, reading, absorbing and interpreting what I understand and then attempting to provide my thoughts to others, those willing to listen about innovation!

Innovation capability building is my 100% focus from my work point of view.

I’m comfortable in much of the understanding of what makes up innovation, totally restless in so much more that is out there to explore and work through – I believe we need to significantly improve potential solutions, through experimentation and prototyping until they become recognized as relevant and applicable and become deeply embedded within our organizations as the accepted approach to innovation design and management.

Investigating, researching and reading all required a significant amount of time, all alongside needing to practice innovation, working to clients’ needs or pushing for their attention to changes taking place within the field of innovation management and what they needed to do about it.

Dynamic capability applied to innovation keeps gaining my increased attention

One area that caught my attention many years back, was the notion of “dynamic capability”, the organizations capacity to change its operation and adapt them to the environmental requirements in systematic and fruitful ways. Academic papers by Teece, Pisano and Shuen, by Eisenhardt and Martin and finally for me, Zollo and Winter, all fueled my thinking at that time.