These dynamics are made up of the capabilities and competencies that reveal and clarify what is required as the relevant traversing points needed to achieve improving innovation success, to move you more effectively towards your strategic innovation goals and build a fitter, more responsive and dynamic organization around its needed innovation capacities.

The lead explorer to walk you across this innovation terrain is Paul Hobcraft

By exploring and modelling the mutual dependencies you get to see how the existing and alternative future innovation system  will behave as you begin to map out and recognize the different emphasis points that make up your innovation system. You can begin to identify what are the more important dynamic ones that require a more dedicated focus and placing more of your resources behind, while others can evolve at their own pace or simply improve as they are far more dependent on the dynamic ones than you realized initially. These can get simply get ‘pulled along’ and rise equally in their performance.

There is a complementary set of forces; improving one often triggers improvement in another. What you have to guard against is possibly ignoring one might equally impact negatively on others. Recognizing dependencies is critical and their triggering effect makes innovation evolution even more dynamic.

We are looking for the ‘combination’ effect of a dynamic set of capabilities and competencies that generates improved performance. The issue is to know what and which ones?

The combination effect to gain a greater innovation fitness effect comes from managing this over four stages shown in the above visual of the journey of innovation fitness dynamics.

The four stages will be described in more detail in future blogs but briefly are:

1. The goal within these stage is to identify the key dependencies relevant for improved innovation within your organization to discover
2. what are the mutual dependencies that will have a more dynamic impact on your innovation system so you understand
3. what consequences come from this and how the changing environment will behave so as to consider the effect, that then leads to
4. what recognition and implications this has so as to put in place an ongoing, evolving set of innovation dynamics that keep you fit to perform innovation on a sustaining higher performance basis.

Again I want to emphasis here, this is an evolving journey but the critical recognition here is, for innovation to continue to be the driver of future growth and wealth, it clearly does need to have a greater understanding and recognition of its management potential within organizations.

This site www.innovationfitnessdynamics.com is determined to push beyond today’s accepted, often ‘lagging’ performance from innovation activity, and raise the innovation performance engine up within organizations. I feel we do have this critical need to have in place a growing clarity of the factors needed to consistently deliver a more ‘leading’ position of knowing what does actually have real dynamic impact, both on an organizations innovation performance and the individual contributions that contribute towards the required strategic goals and objectives.

This I feel states our journey and how we are planning this out to traverse across the terrain towards better innovation solutions, that make up the dynamics of innovation and provide a ‘fitness’ solution that is unique to your needs. Care to share and join the journey?

Paul Hobcraft

Mail to : paul*AT*agilityinnovation.com

www.paul4innovating.com

www.agilityinnovation.com

The post Moving along the path to innovation fitness first appeared on Building Your Innovation & Ecosystem Intelligence.

The importance is to develop the ability to achieve “new value recognition”in new and different ways.

How do you go about to recognize value when it is not linked to existing thinking?  Absorptive capacity can be a paradox. You require more external knowledge to ‘push’ beyond your existing knowledge learning and so absorbing from it; you are demanding more absorptive capacity to be in place.  Equally you need to combine this with the need to break down that “prior related knowledge” radically differently, so it can stimulate breakthroughs in your thinking. Absorptive Capacity can pose significant challenges to the organization. How you deal effectively with the absorption of knowledge determines it’s potential to be transformed for new innovative ability and this will be determined partly by  how you structure the attractiveness for a learning environment so it ‘takes hold’ and can be absorbed differently, for different needs.

Explaining the key components shown in the above diagram

These components make up the essential elements of a ‘knowledge adoption’ innovation system.

The ‘access capacity’ is the ability to connect and link to external and increasingly international networks of knowledge and innovation. This capacity represents the ability of firms, universities, institutions or individuals to secure benefits through network access, cultivating relationships and being active members. The benefits then can include privileged access to knowledge and information, preferential opportunities and influence. It requires ‘engagement agents’ who can identify sources of knowledge elsewhere; they can be individuals or teams of practitioners. They will require a combination of intellectual, organisational and financial resources to make contacts and diffuse new ideas. A culture of openness and learning is particularly important. Open innovation comes to mind where this should apply.

The ‘anchor capacity’ is about the ability to identify and domesticate external knowledge from people, institutions and firms. While external knowledge flows contribute to local learning, it is the ability to ‘anchor’ these external flows that matters most. Anchoring is the capacity to attract international people, investment and firms to set up in a collaborative form. It is also defined as a process of identifying, attracting and articulating the context between externally mobile knowledge and immobile local context needs. The quality of anchoring will decide the wealth, diversity, intensity and duration of the relationships between external knowledge and local learning within the firm and its ability to absorb and translate this new knowledge. Knowledge anchoring is enhanced by ‘anchoring’ agents, organisations (such as firms and universities) that attract new ideas, technologies or processes from elsewhere and adapt them to their local circumstances. Anchoring activities are often reflected increasingly in business or science parks, and other industrial clusters that form around each other due to mutual reinforcing dependence but also critical advantage. These ‘feed’ into the internal innovation pipeline.

Diffusion capacity is the ability to ‘diffuse knowledge.’ It is the collective ability of a firm to adapt and assimilate new innovations, practices and technologies and then commercialise them in the economy. Diffusion can happen through either ‘active’ or ‘passive’ emulation. The former takes place through activities such as purchases and imports of new patents, technologies or systems. The latter happens through applied learning, reverse engineering or efforts to catch up with the competition. Diffusion is a critical capacity for innovation performance. In open innovation this is the ‘transformation’ from idea to final concept.

The Knowledge Creation & Exploitation part is the ‘Development Capacity’

The development capacity are the components of the innovation knowledge adoption framework. Knowledge creation and exploitation are often understood as start and finish points for innovation. In the past it has been often assume these must take place within a specific context to be successful. However, knowledge creation and knowledge exploitation often happen in different and unexpected places. Developing that awareness, that ‘sense’ of potential is important. ‘Absorptive capacity’ is an important channel of ‘knowledge creation’ and ‘knowledge exploitation’, the two components of the ‘development capacities’ which we now define:

The capacity to ‘create knowledge’ is the ability of a place to generate new ideas, discoveries, designs and inventions. This capacity is often expressed in the production of scientific papers, patents, registered designs and graduates. This capacity can extend horizontally across a broad range of fields and sectors and vertically through specialisation and concentration in specific knowledge domains. A horizontally broad knowledge creation capacity facilitates knowledge absorption from wider fields of knowledge, while a vertically specialised knowledge development capacity gives a region a stronger absorptive capacity in complex domains of knowledge.This capacity, though classified as a ‘development capacity’, is nevertheless critical to any absorptive capacity approach.

The ability to ‘exploit’ knowledge is the general capacity to utilise knowledge for commercial use and to extract value from it. This capacity is about the application of knowledge for practical use. In innovation policy literature, this ability is sometimes referred as the ‘innovation capacity’. In this paper, we consider it only as an innovation output; it is not used to represent all innovation activity. While ‘exploitation’ activities involve the ability to generate new knowledge too, their main aim is ‘knowledge exploitation’ rather than ‘knowledge creation’. Knowledge exploitation requires agents and resources – as well as an entrepreneurial culture – committed to the generation of new social and commercial value from new knowledge. A culture that supports entrepreneurship and risk-taking is often required for a knowledge exploitation capacity to flourish.

Main Source: Extracted and (partly) adapted from the report entitled “Innovation by Adoption”, published by NESTA in October 2008.  The full report was written by Sami Mahroum (NESTA), Rob Huggins (University of Wales Institute in Cardiff), Naomi Clayton (The Work Foundation), Kathy Pain and Peter Taylor (Loughborough University – GaWC).

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Understanding Absorptive Capacity and how it works

“Absorptive capacity” is a term introduced through some academic research by Cohen & Levinthal, back in 1990 to describe an organizations “ability to recognize the value of new, external information (knowledge), assimilate it, and apply it to commercial ends”. Since then there has been significant academic contributions for exploring and validating this, in order to improve innovation performance and competitive advantage, yet it is still not well integrated into our innovation process. Why is that?

What we do need is to do is improve our HR management and network systems to build a more efficient transfer of knowledge throughout the organization so as to acquire and leverage new knowledge . This is part of applying the principles of absorptive capacity as we increasingly use more networks, external partners and collaborate with others we are accessing wider skills, inputs and competencies. We need to invest and learn what this does provide, to aid the innovation process. The theory goes that the more we understand, the more the innovative behavior and capability does goes up in potential and the more we have available a richer innovation choice .

The Model of Absorptive Capacity explores potential and realized knowledge.

The need for a distributed organization innovation knowledge system

In some studies by Van den Bosch et all (2003) they suggested the need for three combined capabilities to manage and absorb the flow of knowledge coming into the organization

1. System capabilities that are used to integrate explicit knowledge
2. Co-ordination capabilities that build upon teams that establish the routines for structuring communications
3. Socialization capabilities that begin to share a ‘certain’ ideology, understand the potential of new paradigms and work towards interpreting tacit information for the good of the community.

When organizations are acquiring new insights, new knowledge that is not as closely related to their existing knowledge base there needs to be a very active set of efforts to manage this new incoming flow. The aim here is to extract all its potential value, to absorb it and disseminate it across the relevant parties within the organization. Having the three capability parts structured clear helps establish different areas of capability focus and embed it more fully as an organizational approach to learning and gaining understanding.

Can you imagine where we  have the need for rapid learning of leading-edge knowledge that is required to be absorbed within the company, these require dedicated structured learning, and these cannot be left to individuals or ad hoc measures. When you are learning anew you are searching for cognitive structure, managing implicit, often un-codified knowledge (tacit) that is difficult to transfer and also increased complexity, where you need to absorb a greater range of ‘components’ and apply new‘ architectural’ knowledge. The difficulties multiply if you do not recognize the needs to structure knowledge as well as organize it so it can be explored in more open unbiased ways that you gain from, in diversity of thought.

The ability to use external knowledge has three sequential processes.

A)     Exploratory Learning– recognizing and understanding the potential value of the new knowledge that lies outside the organization

B)      Transformative learning– dispersing and assimilating the valuable new knowledge

C)      Exploitative learning– using the assimilated knowledge to create something different in knowledge or product and seek to exploit this in commercial ways.

The more open Absorptive Capacity Process leading to understanding and outcomes

The call for managing the effective use of knowledge

One of the central drivers of the competitiveness of organizations is its effective use of knowledge. It is the generation, acquisition, integration and application of (new) knowledge needs managers to manage learning. Knowledge underpins innovation, the more it changes, the more it becomes complex to discover, the more we have of this real need to upgrade how we experience, experiment and absorb learning. This needs structuring.

As we absorb more external knowledge from our collaborators the need is to organise this increasingly. We need to sort information into knowledge that becomes useful and actionable.   Absorptive capacity needs to be looked upon as something that should go beyond good theories into increased application through its application.

Absorptive capacity is an integral part of an organizations innovation capabilities and its healthy development is a real significant dimension of innovation management. I suggest we all need to consider its place within our fitness regime to achieve a growing  more ‘dynamic’ set of fitness capacities.

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We need to cultivate Absorptive behaviour and allow it to flow.

We need a system to capture and allow knowledge to flow. For me the adoption model seems to be one worth investigating. If we want to achieve the goal of distributed innovation we need to have in place this possible framework around absorptive capacity to encourage different learning behaviours.. Nesta (www.nesta.org.uk) produced a useful report some time back called “Innovation by Adoption” and I feel this has a good framework that support distributed innovation.

The report argues in a place with a strong absorptive capacity three main outputs subsequently result from the flow of external or distributed knowledge: (1) the creation of new innovation; (2) the creation of new knowledge; and (3) that it does lead to new economic and social value.

Innovation by adapting the adoption model within your distributed innovation needs.

If we agree that most innovations happen outside often self-imposed boundaries then we have to extend out all our boundaries and go beyond our present levels of innovation building. Go outside our box to expand it.  We have to open up. We certainly understand that today innovation is not confined with the walls of one particular company. The world ‘absorbs’ more innovation than we can turn into greater value but we need to attempt to capture this and see if and where its value might lie. This is going to be achieved more likely within a distributed approach asking everyone to contribute to innovation ideas and providing them on a consistent basis the likely content and context fit that they need to look for .

We need to continue to push innovation created often locally, back up through the organization so it can potentially turn these insights into  innovation that will find a place in our world that improved on the existing that was something that we contributed too, that can be highly motivating. For this to happen organization have to recognise the inter-dependency and reliance that a diversified, distributed engaged group of people can bring to accelerate innovation to share, explore and work on turning ideas into new solutions .

What we need to find is ways to absorb this flow of daily knowledge, quickly recognise where it might meet our needs and then fit these to the wider audiences available that search for innovative solutions. There is an awful lot that can derive from a more distributed innovation network that allows a greater flow across a networked organization.

Approaching absorption in two ways

Absorptive capacity captures and enables this flow in each direction. Nesta through its research into this absorptive need  also suggested a model called the AC/DC model where they argue you need to develop two broad sets of capacities: the absorptive capacity (AC) to identify, value, and assimilate and the development capacity (DC) of places to develop and exploit such knowledge.

AC/DC Model

We need to adopt a more distributed innovation model in our thinking

Applying these two models into your thinking to achieve a more distributed innovation model would help to capture, anchor and diffuse all the innovation that lies not just within the ‘walls’ of your organization but just beyond where your local people can see it, value it and bring it into the organisation as one of their contributions to innovation.

Permit people to ‘see’, to ‘engage’, to become ‘deeply involved’ then organizing around distributed innovation can lead to greater empowerment and sustaining your innovation engine and knowledge. Fortune will favour the connected mind not just the brave lonely few. Absoptive capacity has a clear role to play in building capacity to innovate.

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