The challenges of managing in today’s worlds are tough, very tough and demanding. It is so volatile, potentially disruptive and full of risk. Organizations are simply struggling to shed their clothes in the 20^th century and find a way to smoothly manage to become more adaptable and agile in form. They are adjusting to offer consistent responses to instability in the most effective ways, to keep adapting to the consistent market challenges, and in so doing profiting from meeting that latest challenge or disruptive opportunity.

The problem is you simply can’t manage this smoothly, it will be highly disruptive as the organization re-equips themselves and learns, often in the hardest way possible, through failure, through experimentation, through risk-taking. Innovation is increasingly seen as the pathway forward in capturing growth and grabbing any advantage, even if these are increasingly transient. Yet as we look towards building our innovation capabilities we need to work in totally different ways and see ‘things’ in new ways.

Innovation in itself is also a force of instability and we need to find ways to embrace much of its uncertainties by understanding its dynamics. We need to have a major shift in our organizational thinking, needed to find the appropriate new balance within those dual ‘tensions’ of ‘stability’ through efficiency, with its opposite, ‘change’ driven by innovation. It is these dynamic forces within the world we work that need us to respond by building that capacity for managing those ‘dynamic’ innovation capabilities, that today’s markets are requiring and organizations are needing to master.

The emphasis needs to point more to building dynamic innovation capabilities

Dynamic capabilities emphasize management capabilities and the inimitable (unique) combinations of resources that are constantly at work across all functions to make them distinctive and valuable.

Distinguishing innovation capabilities that are relevant are based on the type of knowledge they contain. Functional capabilities allow development of technical, practical knowledge. Integrative capabilities allow firms to absorb knowledge from external sources and this is where absorptive capacity and its structure comes into our required thinking. Innovation requires us to constantly learn, develop, mold and manage multiple situations and challenges. This requires the integration of critical capabilities to successfully stimulate innovation for effective and improving performance.

Many of the identified resources in capabilities have some level of complementary, improving one triggers improvement in another. Equally ignoring one can impact negatively on others. So each component, on their own, have limited effect, it is the combined effect that generates the improving performance. Equally, the needs do change over time and you have to constantly ‘refresh, challenge and stimulate’ these, otherwise, you can have core rigidly set in.

Integrating back or making anew

To this end, I have produced a conceptual model of what I believe is the ‘make up’ for providing an ongoing innovation performance engine – the innovation fitness landscape and the dynamics of core capabilities. I felt it needed a dedicated website and this is where you have ended up to be the ‘go to’ source of reference. It is a work-in-progress so please recognize this when you find the time to explore it. The incentive to do this ‘exploring’ is quite simple, you are dealing in increasingly complex environments and you need to know your capabilities and capacities to innovate. If you don’t you will simply get lost and perhaps forgotten. Innovation offers relevancy and a path towards a sustainable future but it needs fresh approaches. I believe I can offer some insights to help.

The need for all of us is recognize and embrace the need to build an organization-wide innovation capability that should pervade all aspects of the organization’s existence, forming its new core innovation value.

The post The world is working within increased complexity, are you? first appeared on Building Your Innovation & Ecosystem Intelligence.

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.

Financial capital dominates any discussions

Yet financial capital and all its associated aspects rules, no, it utterly dominates. It totally fails to tell us in numbers alone where and what creates the value, it simply reports it.

It is this financial capital through our profit and loss, our balance sheets hides the value, or spreads it out in ways no one really understands its make-up.

Certainly those attempting to judge an organization just have to rely on a ‘history of numbers’ and some ‘selective’ market view to make investment judgements.

Equally those often running our organizations have a restricted view of where their real capital lies, as they focus on the numbers and then work down.

Today,we are  in a rapidly changing world and we need to understand it differently

The reliance of financial capital being the absolute measure is being challenged thankfully. Our business world is facing considerable disruptions from the accepted past practices, performance has become more volatile, more dynamic, more reliant on understanding that knowledge is where the value lies.

“Business as usual” is thankfully in a steep but protracted decline, the necessity today is to be constantly evolving and learning and that comes from knowledge acquisition, assimilation and then transforming and exploiting this into new value. We need to find new models for evaluating our real value and capital stock.

These ‘absorptive capacities’ are where we need to manage our knowledge flows better to translate and direct our understanding of new, value creating capital. We need to report on these far more as they offer the ‘residing’ and new stock that gives us new innovation potential and fresh value.

Learning capital needs to emerge and dominate future discussions

We need to give increasing incentives for organizations to learn. We need to judge the quality of this learning, not listen to ‘bland’ statements often presented. We need to know where this knowledge is targeted in narrative, discussions, spillovers and interactions.

What is being exploited, what is being determined in the decision-making process to give greater confidence that our invested financial capital is “in good hands”.

Keeping reliant on just discussing the financials within organizations we know is not enough. We have to force better discussions on the make-up of the other capitals, as these are still poor, left to individual interpretation and variable and we need to change this.

We are increasing opening up

As organizations become more open (open innovation for instance) the strength of linkages, of knowledge exchange, the translation of these activities is becoming really valuable to understand and focus upon more.

Through many of our activities we actually ‘borrow’ and it is then the ‘dynamic linking’ that we bring into the process, gives up the increased potential of innovation. It is the ease of learning, the ability to acquire and apply knowledge that creates the potential for innovation.

How many organizations really articulate their knowledge capital in acquisition, assimilation and transformation? Do we know how ‘path dependent’ they are- are they lagging in the market, are they simply opportunistic, are they locked-in far too much in potential downside risks.

Do they suffer from cognitive failure, do they lack the appropriate competencies to meet the constant challenges occurring around them. How much of this can you really extract from cold, hard numbers? Not a great deal.

Recognizing where our true value resides

The real problem we have is the lack of appreciation of what makes up our value, the real underlying wealth creating value, the one that truly ‘generates’. The tangible part is easier to appreciate (plant, land, material etc.) but is becoming a significantly declining part of the total sum of value of our organizations- sometimes it is only making up 30 percent..

It is our difficulties of understanding the intangibles as it is a very challenging task. Yet this has huge implications on the ‘health’ of the organizations we continue to invest in. Most organizations resort to “inferring” the value. This needs to change. The value today is in the interactions between the different components that make up our intangibles, out intellectual capital.

We are in need to identify what ‘drives’ organizations and that is our knowledge stock

For gaining and sustaining real advantage, and showing why it has the potential for creating new wealth we need to understand our capital stock.

This needs to be far more forwards looking; it needs to be more open and more transparent and it needs to ‘flow through’ the organization to find the potential to find new value from innovation. The call is growing increasingly for a new valuation model.

Static knowledge where we view financial numbers, never take our knowledge beyond what we are reading, failing to connect it and advance it is just not good enough, we do need to understand the underlying dynamic capabilities that make-up the organization. We need to access, absorb and translate our knowledge stock, allow it to flow and be developed into greater value-adding stock and innovation outcomes.

The post Struggling with counting ALL the sums of our capital first appeared on Building Your Innovation & Ecosystem Intelligence.

There is a growing need for having some dynamic tensions within the organization’s system; these helps generate the better conditions for innovation to thrive. We are learning more on the better tools, techniques and approaches available for putting the learning tensions into our work, making them more dynamic, linked and increasingly relevant to the work to be done.

1). A common language is essential

Any dynamics in the system needs that ability to talk the same language, something that becomes common and embedded to support the routines and move quicker to the concepts and solutions, as others can ‘understand’ them as well. It is through working on the inner stories and appreciating the history, it is having an appreciation of events, good and bad, it is through local slogans, your jargon and dialogues that bring people together. The power of storytelling helps gain adoption and identification to those needs for working on a common cause.

2). Creating constant opportunities for conversations

So many organizations don’t work on the ongoing conversations, design workshops, road shows and dialogue sessions that give everyone linkage and growing identification. You begin to identify your sense of purpose and value contribution if there is a consistent diffusion of messages; these should be always lead from the top or moved up and down the organization to allow for these ongoing conversations.

3). Using the knowledge that resides

Organizations like to believe they are building domains of expertise but often they are actually building the silo’s to restrict the flow of knowledge. Knowing where the right functional expertise lies, the relevant skills, experiences or relevant insights ‘reside’ is increasingly important to throw open to all, to tap into, extract and contribute. This expertise can help with our daily routines by offering different thoughts, ideas and practices that may have a real impact on how you can change.

4). Wrapping up intelligence to give it real value and knowledge understanding

The bundling of intelligence is becoming critical. It needs to be increasingly shared across the organization at real time speed. As we look increasingly outside our organizations, our focal markets sensing and seizing the information and being able to connect it, to bundle it into knowledge that has potential application or relevance allows for absorptive capacities to really come to live. Those are able to learn to bring into the organization by accessing, anchoring and diffusing that external capacity for creating and exploiting new value.

5). Capturing and extracting tacit knowledge

Our ability to capture and access the tacit knowledge that resides in all our employees is a critical issue to achieve new dynamic tension. How do we harness tacit knowledge, capture it, even recognize its value we need to encourage a continuous learning environment, we need to have clear organization learning strategies. Tacit knowledge helps us tackle the unknowns associated with discovery. The more we share, put effort into collaborative ventures the more we learn. The more we engage with external experts the more we should gain from these exchanges. Context becomes vital, as does striving for that common language and association.

6). Allowing time to explore and improve our human capital

Tacit knowledge as it becomes embedded in shared values, assumptions and beliefs you can qualify and map tacit knowledge. Our tacit knowledge increases the human capital. It can, through creative acts give strong feeling and give a real sense of commitment. The more we explore, the more we ‘ignite our passions’ but you need to consciously find the time to explore by clearing the path to allow the absorbing to take place and then extract the knowledge through putting any challenge into context, allowing time to access, anchor and diffuse.

The ability to harness our dynamics is vital

The ability to make our environments more dynamic, more engaging, more challenging, more a place to learn and contribute allows greater movement and potential for innovation and growth. A growth that is for the organization and its people, to provide all the different intellectual capitals to combine, be those human (knowledge, skills and experiences), relationship (social and through our networks) or through the structural ones you put into place (where you pool knowledge, use routines and systems).

Good use of our intellectual capitals and knowing what these are, does allow for a greater unlocking of innovation value. The more we ‘work and encourage’ our learning capitals, combining the power that lies in the dynamic linkages we can forge, in acquisition, in assimilation and then into eventual transformation then this allows known knowledge to become new wealth-generating innovation

The post Putting some dynamic tension into the system first appeared on Building Your Innovation & Ecosystem Intelligence.

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 marketplace 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.

Legacy can choke an organization in so many ways to limit expansion. 

How can we break out of this and rethink? When we begin to investigate legacy to cut loose and design differently, it begins to infringe, it challenges, it simply attacks what has taken often years to build and those most involved become defensive and fit to hang onto what has been established, as it feels familiar.

It feels like ‘their’ legacy is being destroyed and what they have fought hard to gain now needs protecting. Most organizations never feel fully capable to address legacy, they even will deliberately design duplication into their operating model, they will recognize they are far from optimal and more often than not, live with the consequences. In today’s world, this is a real mistake.

The world is changing

You can’t afford to keep heads buried in the sand like an ostrich, although that’s actually a myth stating when ostriches are faced with an attack by predators they bury their heads. New global adversaries are altering our landscape and forcing us to become increasingly competitive, forcing us to often reluctantly alter our established ways.

We can’t afford not to refresh and renew on a constant basis. We need to not just adapt, become more agile but we must think through what, where and how we manage. We need to build a more dispersed network of innovation connections within and outside our organizations to gather and synthesize knowledge that has potential value and future worth.

To allow this to happen, for knowledge to flow into, within and across organizations we need to strip away many of the constraints built into our structure that are designed to ‘contain’ knowledge, whereas today we have to ‘spread’ knowledge far and wide, so we can make the new connections to build int this existing knowledge the  new value points where innovation resides.

Today we have solutions to make a real change and address those legacy systems.

Today we have a solution, we can migrate our current systems into the cloud, breaking them up and building some unique APIs that can ease the transition to cloud services by decoupling critical parts of a company’s cumbersome legacy infrastructure.. These become microservice architecture, providing modular and improved flexibility with the aim of decreasing time to market for example. Or building a suite of small services that allow more external people to contribute, a greater agility in response and build greater independence but can still be internally managed.

So we break down some of those legacy systems into vital chunks that can benefit from external partnering, so as to speed up innovation-to-market. These are driven far more by the business perspective not the technology aspect alone. You are looking to find increased business value by breaking out of some of your legacy problems.

Any journey starts with ‘letting go’

Control gives comfort; we constantly design this into the system. The larger we are, the greater the controls built into the system it seems but somehow, controlling for control sake, does need replacing; we need to let go of more than we realize to reduce the constraints placed on our business. We need to replace ‘command and control’ built up over numerous years with something different. The cloud offers a way forward by finding points of value that can be broken out to accelerate innovation performance.

We need to begin to ask a range of strategic questions that question our legacy so we can be released to move forward.

The post Organizational legacy so often chokes innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

A different intensity of innovation onion perhaps? Why, well we have the business of today, the emerging business of tomorrow and the future business that will provide a radically different set of capability building needs?

The struggle to date is that innovation remains hard to manage well; we strive to systematize it and then attempt to replicate any success we then have, so as to achieve more, yet more often than not. we do not take into account all the variables that came together for that particular winning outcome. Often this does not work on a repetitive basis as the variables that make up innovation can be different for each innovation event or activity but we can learn under a growing ‘range of’ differentiating capabilities.

I would argue there is the real, urgent need is to make the innovation capabilities and capacities as distinctive and unique as the circumstances ‘we’ are facing today and in the future but also highly adaptive and flexible, so you can be ready to call upon each of the components when needed, in new combinations that deliver on the result.

We spend far too much time copying others and not deliberately setting about building our own ‘distinct’ capabilities and capacities to innovate, building the necessary building blocks through our own learning experiences. These are always shaped by the context and content of your innovation, the organization’s position, its resources, commitment and leadership appetite for innovation. Each of our choices takes up on our own evolutionary paths, we can never truly understand other ones because we never really  “walk in someone else’s shoes” Copying only renders us the same, not a great ‘winning position in highly competitive market conditions, is it?

Can we find you a unique set of critical innovation capabilities?

I believe we can as I outlined here on discussing dynamic capabilities. Here I am exploring solutions along an evolutionary path, that search for the unique innovation dynamics that are needed so you will arrive at the distinct and adaptive ones to what the CEO and board want to achieve out their strategic goals from its innovation investments. You take a fairly structured approach. It is knowing the capabilities that matter most to their particular innovation strategy and the present organization’s innovation fitness to lay out the pathway to learning how to improve, focus and execute these distinct capabilities needed in a highly focused manner and move progressively towards them.

As I have explained recently I often break my explanations down on this building core competency into eight parts.

We have two levels to it. The first (or higher level) is the need for a 1) Unifying framework, 2) to gain alignment and this needs two essential aspects to be well-clarified. We need to establish 3) a working blueprint and a clear understanding of 4) the business focus orientation for innovation to reside in.

The outcomes of this top-tier framing then we can begin to construct the underlying level of 5) well-designed competencies and capabilities that need to be pursued so we need to move the organization or the innovation activities into ones that are seeking out this constant alignment, and this needs building 6) critical enablers and behaviours, a seeking out of 7) motivators and finally, 8) the dependencies we must have to map back so as to advance our core and build our innovation competencies upon.

The innovation accelerators model – I often keep coming back to this

I have been working on arguing you can have a unique model for some time. I think the way I have it structured is it is a formula for an innovation acceleration model. I’ve outlined this solution in a previous post. I think it is worth working through, it seems to move with the times of what we need to focus upon. Building an innovation framework that has real capabilities at its heart.

I have worked on a formula SCA = II + OC + EE + MLC + RNE for this.

Sustainable Competitive Advantage (SCA) comes from the combining effects of the following:

• II Innovation Intensity– its degree of adoption, the investments made, the multiple levels of activities and the focus of the intensity given to building capabilities to innovate.
• EE Entrepreneurial Energies– this os more on how you set about, promote and generate the internal environment as entrepreneurial to enable innovation in all its different forms to take hold and be seen as a learning environment people want to get involved with as they can readily identify with.
• MLC Market Learning Competence– these give a clearer awareness on what and where to acquire from and then take the market lessons from. The key need is to orientate always towards, and generally get to the heart of, where innovation takes place- in the marketplace and with your customers, knowing their real needs and also figuring out their unmet ones also!
• OC Organizational Learning– knowing the differences in the different ways of learning by linking the different intellectual capitals and combining the complementary assets needed to make them more dynamic.
• RNE- Relationship & Networking Effects– the supporting and enhancing aspects of making greater connections, collaborations and exchanges so as to speed up the process of innovation, reduce or contain costs and enhance your understanding through these external relationships and getting closer to knowing where latent knowledge lies, to assist and share this internally for greater impact and result for all.

I would encourage you to explore it, work it around in your own situation, it can provide a powerful catalyst to get everyone working at the critical parts of the formula and it is easy to remember.

So my additional ‘peeled onion’ to add to the stock of capability building for innovation is here

We do have to adapt out capability building increasing towards the future. We need to continue to differentiate ourselves and I would offer seven ‘generic’ thoughts or broad theme clusters that you might want to build around, to build your capabilities that will make you far more ‘innovation fit’ for the future.

1. Linking to a clear sense of purpose. If we are aware of the direction we can ‘open up’ the discussions about our needs to achieve this sense of purpose. A clarity of what ‘we’ have along with the gaps we need to bridge to get to this future purpose. This was my own attempt some time back to get at my own “Finding our true purpose”
2. Translating knowledge into value. Are we allowing knowledge to be gathered, understood, applied and diffused with our organization’s in thoughtful, well-structured ways. We need to learn how to amplify the signals in why this resonates and then we need to share these. I can never get away from the Absorptive Capacity needed to have in place and to ‘allow’ this knowledge to flow across the organization.
3. Achieving impact and intensity. We do have to strength our resolve to perform. Innovation work needs to arrive at distinct outcomes that offer impact and intensity. This conveys’ change, it challenges the existing by delivering something better.
4. Building the capacity to perform. How we assess and improve needs to be ongoing. We need to articulate the values and core needs within the organization, we need to set aside learning and exploring time and we have to show the commitments to sustaining this building ethic. We need constant walkabouts for testing and learning. The future depends on it, as we are in far more in fluid and adaptive situations that the past where agility, creativity, and ingenuity are all required.
5. Aligning People, Technology, and Innovation. Technology is dominating much of what we do and how and what we do it upon. We are having higher degree’s of connectivity, interactivity and sharing opportunities than in the past to be engaged in networks, ecosystems and different relationship forums than ever before. We need to harness the essential interplays this requires.
6. Exploiting and Exploring. The realization that we need to operate in ‘dual minds’ and structures is at last beginning to be recognized as essential to master. We need to be constantly striving for the innovation balance: between exploring and exploiting. We need to tackle innovation in tow different thinking hats These are about learning, searching and delivering the winning value of ‘new generation activity’ by recognizing how we balance out exploitation (extending the life) and exploration (new understanding). These need separation and different approaches.
7. Creating Sustaining Value. So many organizations require re-energizing, of being re-equipped for the future in different skills and behaviors. There are so many spaces to connect into and explore and this will come from the asset orchestration that you provide (structuring, building and leveraging).

We need to not just know the appropriate resources; we need to work on the skills, processes, routines, organizational structure and disciplines that enable firms to build, employ and orchestrate mostly our intangible assets relevant to satisfying customer needs and which cannot be replicated by competitors.

Assets that deliver the new innovation needed, through attracting in collaboration efforts and integrating these into you own evolving resources by turning them into being far more dynamic and evolving in nature to met the future challenges.

Under these seven broad ‘capability building’ approaches we can build your future innovation into being ‘sustaining’. We need to distinguish ourselves from others, as we equally have to compete with them. If we do believe we have the unique potential both in our people and in the opportunities out there, then you have to be highly purposeful in your committed intent to build the capabilities, capacity, and competencies on a very consistent basis that offer that uniqueness.

If we do believe we have the unique potential both in our people and in the opportunities out there, then you have to be highly purposeful in your committed intent to build the capabilities, capacity, and competencies on a very consistent basis that offer that uniqueness.

How you set about this building I have, within this post, suggested a number of ways to ‘peel the innovation onion’ and can only state my willingness to engage with you individually in this. This is of course if you believe innovation is essential to your future, as I certainly convinced it is increasingly becoming mission-critical to master, which is my starting point always for building the capacities to innovate.

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Although she is addressing within this paper the bigger more complex social and economic challenges we are facing in healthcare, alternative energy, water scarcity, climate management, poverty and economic revitalization, she is attempting to reframe these into problem resolutions from breaking down discovery into four distinct channels. I liked this thinking.

The new innovating world we face in the 21st Century

Her opening insight is in the twenty-first century we are all requiring more reliance on social technologies that are designed to allow the different technologies to emerge and be allowed to integrate, due to the diversity and diffusion of knowledge. This is different from past practices found within organizations. Dr Dougherty points out much of what takes place today is still based on nineteenth-century practices where organizations were designed to stabilize, scale up and optimize, mostly internally, the scientific and technological knowledge into large working configurations.

Today, in the 21st century, we need to reply on social technologies that allow for emergence, anchor it far more into the region, or specific problems or challenge, and not so much scale up into large working configurations that might be limited and to integrate more than optimizing. She discusses as examples drug therapy, cancer cures, or developing a technology platform to integrate the creation, storage, and distribution of wind power.  Innovation needs to be more external in its outreach in creating, combining and recombining knowledge, so it can accomplish particular uses and can materialize all this gained knowledge into something new that actually works in the real world but can be dealing with different configurations in different situations. As she points out knowledge is fragmented, partial and widely dispersed, where we are constantly seeking out all the unknown, unknowns. This is why I value the absorptive capacity framework for knowledge.

The complexity today is being faced with any innovation challenge that spans the globe.

The success of extracting knowledge is in the connecting, capturing those unique insights and interdependencies in new contexts that capture the ‘nuggets’ of local knowledge applied in local situations or applied to solve and overcome situations and bring these together to accumulate all these diverse nodes of knowledge.

Today with technology, with platforms and the recognition of ecosystems we can really tap into these point of diverse knowledge and harness them in new innovative ways and deliver them far more specifically to closer customer needs by understanding these. The whole network and relationship building opens us up to discovery and the communication platforms and social types allow for a greater exchange, so new knowledge emerges.

The framework of discovery suggested

What I liked about her thinking was suggesting to “disentangle the ecology of complex innovation into distinct problems of discovery“. These were broken out into four: 1. the Project discovery Problem, 2. The knowledge integration discovery problem, 3. the strategic discovery problem and 4. the governance discovery problem.

This is suggesting these four discovery pathways can help develop a more robust 21st century for understanding and then managing innovation in a more social related way within organizations.

Let me describe the four discovery pathways as direct quotes from her paper as it does a good job of the why:

“The project discovery problem is at the heart of innovation. It concerns building and materializing the product, program, or service so that it works to actually resolve problems. Project innovators ferret out specific elements that might constitute the emerging product and how they go together to generate desired functionality. Project work is very hands-on, concrete, embodied, iterative, and multi-functional, but occurs in large networks because emergent knowledge is noisy, fragmented, and far-flung”.

We need less work on general network structures among scientists based on patents (patents are inventions or inputs to innovation, but not innovation), and more work on how particular relationships enable the ongoing confluence of knowing and doing for innovation across many potential participants in concrete settings. We need less work on small teams and more work on how to collectively integrate noisy information, on the nature of experiments for particular kinds of problems, and on the reasoning processes, people use when deductive confirmation cannot work.

The knowledge integration discovery problem redefines R&D as an ecology-wide challenge of integrating diverse knowledge in ways that support project problem setting and solving. Knowledge integration brings together different technologies to solve problems, selects alternative paths as projects move forward, supports general questions that span projects, or sets up experiments and testing regimes.

We need less work on investing in science and technology in general and more on how these investments lead to actual innovation. Studies might examine the types of organizing that enable knowledge co-evolution among disparate knowledge communities for different grand challenges, how governments, universities, and publishing regimes may perpetuate the myth of the linear flow of knowledge from basic research into application, and how to make basic knowledge actually usable without thwarting the basic research goal of fundamental insight.

The strategic discovery problem involves creating the strategic direction to channel resources, focus efforts, and incorporate the new with the old. In complex innovation systems, the question becomes how to strategize across the ecology, and how to map forward into the long-term future so that innovators can persist with projects that take decades to develop, or with problems such as education or health care that will never be fixed once and for all, because these problems keep emerging.

We need less work on short-term collaborations or open innovation, and more work on ecology-wide strategizing over the long-term. For example, how can strategic managers use knowledge from projects and knowledge integration efforts to develop a variety of potential value creating opportunities? How can they use these potential opportunities to map the future, and how far into the future can they see? How can managers of individual organizations use this mapping for their own needs, and how can they work together with others and still compete? What alternate temporal structures and metrics enable managers to work toward very long-term goals, and how can these be organized?

The governance discovery problem involves creating mechanisms of interaction among organizations and agencies that sort out who gets what is accountable for what, and for how long. Complex innovation requires orchestrating collaboration among many organizations, institutions, regulators, and other agents. We already have many examples of non-market systems of interactions such as regional agglomerations, industry platforms, social movements, strategic alliances, or self-designing standards-setting bodies.

Research can consider how such existing mechanisms might evolve to enable people to come together for complex innovation. In addition, societies invest enormous resources into supporting commercial development, education, basic research, and so on. Research can consider the kinds of governance mechanisms that effectively leverage society’s knowledge resources for particular problems.”

In summary

We need to rethink our discovery pathways for innovation in our new socially connected world. We do need to integrate emerging knowledge in new ways

Deborah Dougherty is suggesting disentangling the ecology of complex innovation into distinct problems of discovery: generating new products and programs; developing and integrating knowledge across the ecology; strategically framing
innovation for long-term development across the ecology, and enabling new governance mechanisms in the ecology.

Each discovery problem is an essential part of complex innovation that involves many players. Each must be set and solved in its own right, yet each is entangled with the others. All four discovery problems encompass the entire process of problem setting and solving and in a more “connected” world, we do need to manage these to emerge and fragmented knowledge in new ways.

I think this outline of four discovery approaches helps us to think about this a little more. I am thinking about how to take this forward in my own thoughts

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To cite this article: Deborah Dougherty (2016): Organizing for innovation in complex innovation systems, Innovation, DOI: 10.1080/14479338.2016.1245109

To link to this paper: http://dx.doi.org/10.1080/14479338.2016.1245109

This paper was published in late 2016 by Innovation: Management, Policy & Practice and © 2016 Informa UK Limited, trading as Taylor & Francis Group.

Deborah Dougherty has written a more extensive book on this ” Taking Advantage of Emergence: Productively Innovating in Complex Innovation Systems”, published 25 Feb 2016, Publisher: Oxford University Press, ISBN: 978-0-19-872529-9

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For me, the bedrock of innovation is built upon competencies, capabilities, and capacities and all these involve people as well as technology. They go hand in hand in our connected world.

Building these is the core of my own innovation offering in consulting, in advising, mentoring and coaching. My work constantly “maps” back to this essential three “C” of competencies, capabilities, and capacities.

Let me offer some thoughts that build around a framework I work through.

I often break my explanations down on this building core competency into eight parts.

We have two levels to it. The first (or higher level) is the need for a 1) Unifying framework, 2) to gain alignment and this needs two essential aspects to be well-clarified. We need to establish 3) a working blueprint and a clear understanding of 4) the business focus orientation for innovation to reside in.

The outcomes of this top-tier framing then we can begin to construct the underlying level of 5) well-designed competencies that need to be pursued, we need to move the organization or the innovation activities into ones that are seeking out this constant alignment and this needs building 6) critical behaviours, a seeking out of 7) motivators and finally, 8) the dependencies we must have to map back and advance our core and build our innovation competencies upon.

Let me explain these a little more, they tie together.

• The Unifying framework needed. Competencies that are going to be built need to fit the core design and aspirations of the organization. These are strategically defined and combine organizational goals and individuals development. Knowing the vision, direction and intent of the organization will enable innovation to be designed top work with these. I believe there are different innovation types as pathways to pursue. A dedicated site has been put together to understand the potentially different innovation types (in collaboration with  Jeffrey Phillips over at Ovo Innovation).It can be found at http://cirf.pbworks.com and explores the necessary business architecture, provides a detailed innovation reference framework and examines the different innovation types through a unique lens. Each innovation lens builds upon different capabilities and competencies needed. We also do need a common language of success and innovation’s contribution to this and again in a collaboration with Ovo, we designed the Innovation Executive Work Mat (initial whitepaper) as the overarching need to have in place. The whole point of both of these thinking through positions was to raise the bar of understanding around ‘different’ innovation, create this better fit and strive towards this alignment strategically and operationally. The net effect is it does prompt a greater desire, clarity of purpose, identification, and fit, required at the senior management level and in general for innovation management construction.

• Gaining Alignment. Alignment is one of the hardest tasks, especially in large organizations. There is the need to address the corporate alignment, the granularity that always occurs in specific goals and tasks. Having a clear, well- articulated strategic innovation document, one of the outcomes of working through the Executive Work Mat frame you can address the multiple points of identification. You can determine the competencies required of everyone for innovation to be more within the core of the organization as well as you can address those that are specific. The approaches taken to alignment must continue to map back to 1) the business strategy, 2) vision and missions, 3) the innovation needs and 4) the pathway development that is taken to achieve this alignment.

• The Working Blueprint. My approach to blueprints might be different to others. It needs to have established the key dependency decisions, the honest assessment of the key aspects in the likelihood of success by determining the milestones to identify and move towards, the critical spotting of the gaps in critical competencies that are present today. I have built and continue to develop my thinking here through a dedicated website for what I call the innovation fitness dynamics, taking a structured approach to the development. This is a journey towards innovation fitness; it is dynamic and has nine stages to work through. This is a long journey of exploration and experimenting. This approach lays out a process to manage the development of the capabilities and competencies needed. The blueprint is staged and planned, dependent on the overarching strategic approach to innovation

• The Business Focus Orientation. I look at four aspects here a) is it competitive b) Is it well-structured and designed c) Is it highly entrepreneurial in its design and execution and finally, d) Is it built on a collaborative basis
  • Competitive needs to think through the action orientation, the business acumen that is needed, the customer engagement intent and the result focus outcomes expected.
  • The well-structured part is the decision-making process, the level of (dedicated) project management, how much is self-managed in learning, what level of supervisory skills and the design of a talent management approach.
  • The entrepreneurial skill set is how much agility, flexibility, change, risk taking, new knowledge, and expertise is gained and then applied to solutions pursued, that builds confidence.
  • Then in the collaborative part it is the levels of collaborations achieved, in the manner of communication and relationship building, the ability to manage conflict management, the development leadership applied and the interpersonal effectiveness by leading and influencing others in the pursuit of innovation solutions.

Then we set about a detailed structuring of what constitutes the core competencies

5. The Well-designed competencies that emerge due to the working through the above. These can then be described by knowing the knowledge and skills required. By building these to reflect novel and complex situations and innovation is often most certainly both you can begin to build a “sticky” competence set that will remain relevant even if content knowledge changes as it continues to align to the above. The importance of clarity in performance levels, expectations and the understanding of a constant improving metric build this competency framing up. The whole ethos is to seek out deeper learning experiences and having exposure on knowing where to apply these in meeting different challenges and opportunities. The ongoing dialogue builds from this dynamic learning approach to understanding how performance can become better by practice and learning objective. I very much like to use the absorptive capacity framework for this knowledge learning journey.

5. Critical behaviors. It is seeking and identifying those positive behaviors that advance innovation. These need to be at individual, team and organization levels. Again it is a learning journey, of experimenting, clarifying and then embedding ones that work. These need to be recognized as constantly fluid, adaptive and agile. Constantly asking what enhances perform at each of the three levels, what gives impact and movement and can be measured, adopted, seen and valued by others.

5. Seeking out the motivators. Innovation is tough as much of it remains unclear, in plain sight and needs to be realized. The whole motivation effect works on being observable, measurable and clear. The constant revisiting ‘intent and purpose’ gives identification, we need to shift to ultimate outcomes. Basic motivations rise as identification with an achievement orientation, exploring the prevailing attitudes, values and self-concepts become the well-seen framework to be judged against, where achievement orientation prevails and is recognized.

5. Finally building all the dependencies. Taking an open stance to innovation, its discovery, investigation, its progression in its different stages from concepts to prototypes, to final outcomes and commercialization requires a real ‘network effect’ of collaborators. Today we recognize that we need to have an externally focused outlook to learning, (relating to the actual world, outside-in) seeking expertise, open up to diversity and specialization as well as knowing where the leveraging points are within the internally focused needs (of our world, inside-out) of who does what, who can influence, support, decide and become more engaged and involved. Dependencies are highly dynamic and fluid. It is tapping into creativity, seeking out opinion and expertise and feeling a growing level of freedom. We need to work on the four parts here a) critical thinking b) complex problem solving, c) judgment and decision-making and d) active engagement and learning. We need to fill all the gaps

In summary.

Innovation needs to be dynamic; it cannot survive in a static environment, it needs to search out opportunities and quickly capitalize on these. The routines we build to support these dynamic environments equally need to be infused with this dynamic tendency. Asking constantly about our routines what has the potential to be far more evolutionary in nature, differentiating, critically enabling and supporting.

Innovation does need to be linked to a clear sense of purpose. The need to build the innovation capital comes from pulling together our intangible assets and most of these are learning capitals that our people, their relationships and the leveraging of the structural capitals give us the foundation for value identification, creation, and realization. Knowing how to set about the building of core competencies, building capacity and capabilities is critical to design in any innovation endeavor, or simply to thrive and grow. Setting about their design becomes critical. This provides a “snapshot” in my thinking and structuring core competencies needed in innovation designs.

So these are just my closing innovation thoughts of 2016. I wish you a highly successful innovating 2017 ahead of us all.

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The post Building the Core Competencies for Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

In this post I wanted to explain my thinking through on this ability to be ‘ambidextrous’, knowing the difference of when to exploit and when to explore as essential to leveraging innovation, in all its forms and watching out for some of the traps in not managing this well.

Managing this, in all honesty, though, is hard to get the balance right but highly valuable if you do achieve it, it can transform the business. Many of our organisations struggle to manage both successfully as they tend to focus more on separation mostly in organisational structures alone as their attempt to become ambidextrous. It is far more than ‘just’ this.  Get the balance right across the organisation’s design and in its leadership management, it becomes a very powerful mechanism for accelerating performances by delivering significantly new innovation and equally sustaining and leveraging the core business you have today.

Recently I contributed a blog post over on the Hype Innovation Blog ” Balancing Exploitation & Exploration for Changing Performance” that opens up the subject but then extensively dives into three examples of Apple, GE and Google that are working in highly ambidextrous ways, pursuing exploiting and exploring in their own unique ways.

The important point is that the make-up of how, when, what and where to exploit and explore, can certainly be very different for each organisation, all dealing in their different contextual settings. You need to develop a “dual mentality” in managing and be watchful for dealing with this as it can create a real deep-lying set of tensions, yet it is within these tensions and how they are managed will determine eventual success of getting this balance right.

We often face conflicts on knowledge acquisition, absorption and translation

How do you switch from the pursuit of efficiencies, from what is often well-established, into the probing of the unknown or not easily quantifiable? We need to balance the interplay between the two.

As we pursue the alignment and adaptation of the two, this is where we get into a serious conflict by attempting to manage this in one fixed ‘state’ or the other. You start questioning, looking for synergies, searching (often by default) for the complementary, attempting definitions, drawing connotations and meaning from these far too early and this has consequences. You muddle your thinking between when to exploit and when to explore effectively. Management is often looking to close something down, to make a decision based on the present known facts, exploiting as quickly as possible what we do best, yet there are many occasions they should stay open, wait and allow time to explore more, to gain more insight. Knowing when to do one or the other is the judgement needed.

You can so easily get into further conflict as exploitation tends to be built on past knowledge, or pursuing and acquire new knowledge to build on existing knowledge. Whereas the kind of knowledge needed for exploration, is significant new knowledge acquisition and requires rapid absorption, and one might not be necessarily helpful to the other, as the purpose and need are sometimes radically different.

You struggle to find the consistency of purpose or even commonality when the type of knowledge that is required can be so starkly different, built either on the known or in pursuit of the unknown. This is why gaining an absorptive capacity understanding becomes important in the context of what you are attempting to do. Knowledge ‘feeds’ advancement and equally provides the ‘fuel’ for innovation but they mostly come at you differently to manage, absorb and translate into their meaning.

Managing exploit and explore depends on your situation

Unless you have a “guiding star” that comes partly from a vision market understanding and mission, that can help you decide the emphasis between these two, it makes managing these dual activities as simply difficult. Is it one that is focused on productivity, cutting costs, ensuring ongoing quality and building reputation, or one pushing out by experimenting, adapting constantly and searching for viability and its validation, how can you determine where you put your emphasis?

I would argue it really does depend on your orientation and what you want to achieve. It is where the organisational focus lies and the necessary defining conditions  and the market dynamics will mostly decide that? How volatile or challenging is the market, is it growing steadily or rapidly undergoing dynamic growth? Do we have to pursue a more radical agenda of innovation or can we evolve on a more incremental path? Do we place our emphasis on consolidating our core or searching for concepts that radically alter our position?

Are you in pursuit of a logical and hopefully, coherent business model, leveraging all the efficiencies which need to work in an orderly, functioning, well planned and managed ways, one where you are making sure your innovation activity is built into its well-established structures and processes? Or are you wanting to encourage a greater freedom for individuals to make personal decisions and encourage the taking of initiatives to be more radical and distinctive in their innovation approaches, deliberately introducing this into their work design, offering high levels of flexibility and self-organizing, allowing for an emerging model to emerge as against fitting into a well-established and often rigid model.

The case for clear separation

There is a number of highly respected people who suggest clear separation must occur. They pose the questions: “Are exploiting and exploring at two ends of a spectrum?” Are they not so different that they need clear separation? We need to separate out the present day-to-day work, with the innovation future work. This has merit.

I think if you foresee a radically different business emerging then this clear separation makes greater sense but how do you reconcile some of the underlying values? How important is the culture, the history, the brand or image, how do you rotate or attract the necessary talent. How do you fund the ’emerging’ business, does this existing business finance this and if so, will it constrain the new business in open or hidden ways? if you create distinct entities, giving them completely different operating environment, will they be capable of being merged back later?

In my examples I used on the Hype post, the one that is a real test of management is the Google decision to separate out its moonshot’s from its core, by creating a new holding company, Alphabet, to treat them distinctly differently. As the founders, their view has been: “the whole point is that Alphabet companies should have independence and develop their own brands”, then separation becomes a clear decision. Yet it does seems there are some initial tensions occurring that will need well-managing and different management thinking to manage this transition, it will be an interesting one to watch how this evolves.

A dual management approach

The argument goes and it might surprise you, by supporting core businesses and new emerging innovation units actually requires leadership to be constantly inconsistent. They must totally live the dual agenda otherwise, it fails. It needs significant management attention to managing the tensions this duality brings. When leaders do take this ambidextrous approach, they are forcing change but it can be very demanding to get this exploit and explore balance right.

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The post So how do you manage exploiting and exploring for 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.

Adapting always seems a work-in-progress, or it is often something where we are simply making little or no progress!

We often stay ‘stuck’ in the way we do ‘things’ around here, never seemed able to break out into something new or different.

To adapt we need to open ourselves up to learning and adjusting our organizational ‘form’ in new ways.

In business, there should be a constant battle to reconfigure the assets and extend the existing capabilities. Yet often these stay ‘static’ not learning or improving.

In our innovation activities, there is an even greater pressing need to build into our thinking the ability to find more dynamic capabilities. It is a constant innovator’s dilemma to think through and get right.

What might help?
Recognizing our need to think differently
Here I am wanting to outline some opening thoughts for you to consider in becoming a more adaptive organization.

There has been a lot of discussion about finding new organizational forms that need to somehow reflect on pushing out and developing around unique combinations building into our existing structures these four distinct ‘classification’ states: a) collaborative, b) learning, c) emergent and finally d) ambidextrous.

These ‘states’ are viewed to be really helpful in accelerating an organization’s growth potential and improving greatly on the innovation cycles.

Partly this is being driven by a recognition that we are becoming more dependent on a growing set of challenges that include: a) gathering and synthesizing far more knowledge than ever before, b) the fact we are increasingly becoming dependent on the performance of others, c) the assets that we simply own and have in place are just not good enough today and d) our abilities to “read, react and respond” to changes occurring that just seem to be constantly accelerating away are becoming more difficult to keep adjusting too in our present organizational structures.

Somehow we need to respond in more agile, fluid and adaptive ways. Roger Martin suggested some time back “that modern leaders need integrative thinking to embrace complexity, tolerate uncertainty and manage tension in searching for creating solutions to problems“. It is learning to make different choices in a far more creative process, often more disruptive to our established norms.

All these are challenging our existing organization’s systems, structures and processes and it is a growing process of understanding that will emerge to form these new ways of operating, far more reliant on technology, rapidly available and adaptive systems and flexible thinking and design.

The need to become bolder in our thinking

We need to encourage fresh and bolder investments in knowledge, in infrastructure, systems and in managing these. Ones that focus on activities that pursue new approaches that lead to exciting innovation, that really does spurs growth. These are about learning, searching and delivering the winning value on the new innovation value scale of ‘new generation activity’ from recognizing how we balance out exploitation (extending the life) and exploration (new understanding). We need to appreciate the separation effect for innovation.

Most of our organizations today struggle with applying the ‘appropriate’ resources into these two ‘dual’ approaches. Many try to separate them, often hiving off the more radical innovation development part to protect it from being overwhelmed by the often overbearing focus on the short-term and exploitation. Yet this is a real mistake, as they are necessary to be combined to improve what we have, as well as add in a significant change to keep the business healthy (efficient and effective) and equally growing (through innovation)

We are living in a world of apparent contradictions

We need to manage with one eye on austerity, the other on emphasizing the need for innovation. The popular ‘answer’ to this is simultaneously exploring and exploiting, yet these two organizing and managing styles are hard to find the right balance we need. We want to have a stable environment but we need to equally be dynamic, constantly improving and introducing new innovations.

These are a significant range of questions we have to consider before we decide to establish the ‘appropriate’ position of how much we need to emphasise on the exploit and explore, both needed to be balancing the stability and delivering the dynamic. Much is dependent on the diversity and dynamism of the business environment we are operating under, the resources we have available or can call upon, the market conditions we are facing, as well as predicting where all of it is heading. Easy huh!

Equally, it is dependent on what we are attempting to do.

Exploitation is the “refinement and extension of existing competencies, technologies and existing knowledge” whereas exploration is “our ability to experiment with new alternatives” and each is certainly built on our learning and accumulating experiences. Exploitation on its own, or if heavily emphasized to the exclusion of exploration, can eventually lead to failure, whereas too much exploring and experimentation can limit exploitation. Each can become a “failure trap”.

The “success trap” is when exploration leads to exploitation and exploitation to more exploration, a reinforcing cycle through clarity of mindset and managing between routines and experimentation. These can have very different activities to manage and are the cause of many of the tensions within the balance needed in organizations to innovate the new and manage the existing. Each is often competing for scarce resources, a constant interplay.

The argument for establishing an ambidextrous organization has proffered different opinions for pushing for variations based on: a) clear separation, b) developing the abilities to switch, c) become self-organizing or d) using an external ecosystem thinking to establish the right mix between exploit and explore. Each is determined by a unique mix of considerations.

The answer for each of us is that it really does depend. It has a paradox only you can solve in your unique situation. It comes down to trade-offs. So what do we need to consider? Do you tightly couple these or seek degrees of separation?

We need to seek balance, strive for dynamism and accelerate innovations
With this ever-increasing set of tensions, we are in real need to shape capabilities. It has been suggested * that we have to resolve four closely interrelated ‘tensions’ to help us in leading to understand what, where and how we design ambidexterity into our management within organizations.

We need to consider how we would balance these four tensions:

1. Differentiation and Integration. How do we separate our exploitative and exploratory activities into distinct organizational activities or units? Integration is deciding the mechanisms that can address these. This deciding point between these two will often boil down to the degree of importance placed on the need for exploitation and exploration; these should not become mutually exclusive positions.

We must balance in constantly adaptive ways this duality. It is the specific task or activity that can largely determine this but it needs a conscious designing in.

2. Individual or at the Organizational level. The ability to ‘fuse’ any approach across multiple levels of need at organizational design and the individual’s ability to explore and exploit together, or at separate times, needs resolving. Having different teams, one exploring, one exploiting or having individuals who have a higher propensity for one or the other, to be blended into a diverse team solving a complex challenge that needs this dual thinking purpose are some suggested approaches.

Again it comes back to the challenges that need to be addressed, as the management of contradictions and conflicts needs different alternatives, in our creative thinking. The orientation between the short-term and longer-term need equally to be well thought through. We need to fit innovation into its appropriate context, contributions and characteristics of the people working on this.

Finally, here, it is the diversity in knowledge coupled with experiences. that give us richer linkages for innovation. It is the working consciously on the alignment and adaptability within the mix and at these different levels required. There is a fluid need to move between these levels of design and need.

3. Static versus dynamic perspectives. We do need to find a way to simultaneously pursue the two activities of exploring and exploiting. We need to reduce the static and emphasis the dynamic, by constantly adopting ‘certain’ configurations to meet the innovation needs we are working towards. Achieving a sequential state or pushing for a simultaneous pursuit of the two becomes the key consideration.

The key is to repeatedly and intentionally orchestrate the firm resources; it is striving to gain interactions not separating them. Hiving exploring off into a discrete unit creates problems in any down the line handing off back to the operating unit responsible for the execution of innovation. There is this real need to think through a more comprehensive innovation life cycle here, as innovation is certainly far more dynamic (or should be)

4. Internal versus External Acquisition and Interplay. The need is to gain and utilize the knowledge and this ideally comes from both internal and external resources. The stronger we have in place alliances, outsourcing arrangements and partnerships, we are building our ‘combinative capabilities’ and how we can consciously apply a more absorptive capacity approach to synthesize, apply, acquire and absorb knowledge.

This allows us to develop a higher degree of knowledge flexibility across organizational boundaries and find different ways to integrate this into our innovation thinking. We are always in need of novel, diverse alternatives to any innovative thinking.

Knowledge diffusion becomes vital to manage the exploit and explore and this needs to flow across the organization, not stay limited within one part, reducing the opportunities to leverage this acquired knowledge. Here lies the seeding of corporate renewal.

Each of these interrelated tensions needs a high level of resolution.

The level of insights into the strategies, structures and processes that allow them to be in this ‘dynamic tension’ for innovation to occur, is one we must constantly strive towards a balance and harmonization between the two activities of exploitation and exploration. These tensions will actually require a high level of constant and often contradictory levels of requirements. How can we design this into the fabric of the organization?

This set of challenges does require this deeper thinking about the development of a more ambidextrous approach to innovation. How can the organization be designed in adaptive ways around this constantly evolving innovation need.

The real hard questions to answer will eventually lie in asking “what are the similarities, differences and interactions between the individuals, a group’s and an organization’s creative capacity, diffusion capacity, absorptive capacity for knowledge and risk-taking capacity”.

Where are the balances needed to be achieved in organizational adaptation, innovation need and learning? How can we design the type of dynamic environment that I believe can evolve by an appropriate design unique to you, one that I regard as requiring the understanding of building our innovation fitness landscapes

Building these changing landscapes to meet opportunities and situations to respond to, at you need to adapt,  manage and operate within; then determining what you need to have available, knowing the how to go about bridging the gaps, to arrive at a state of being constantly adaptable as your goals adjust and change?

It is certainly complex and we all need to learn, adapt and work through this balance in our exploitation and exploration needs. It is one critical part of future organizational design. It does need individually working through to meet your own specific needs for growth and protection.

It does mean that the level of sensing, seizing and reconfiguring is critical to work upon and that means it has to be highly dynamic, in building the dynamic capabilities required for innovating because nothing can be static for very long in today’s world.

The key reference used is drawn from the paper “Organizational Ambidexterity: Balancing Exploitation and Exploration for Sustained Performance” written by Sebastian Rush, Julian Birkinshaw, Gilbert Probst and Michael Tushman. This paper has been at the core of the post.
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The post Striving for the innovation balance: between exploring and exploiting. first appeared on Building Your Innovation & Ecosystem Intelligence.