“Innovation capital is the sum of all that promotes the development and changes required for achieving innovation outcomes, within one organization or its broader networked environment, for marketplace advantage”

“These are made up of the resources, processes, knowledge, and capabilities, that are constantly evolving and highly dynamic to build greater innovating capacity.”

“These build upon the capabilities of ‘sensing, seizing and transforming’ to build new capital that focuses more upon the dynamics within innovation, that provide the true value creation in successful outcomes in the final product, services or executing within business models”

We need to value both “stocks and flows” in equal attention to build innovation capital

The ‘stock’ of innovation capital can render different productive value outcomes, is a bundle of the firm’s resources/assets and holds the renewal capabilities and they possess attributes that make it a “strategic asset”

Innovation capital is made up of many different assets that are often context specific, and interconnected and this makes it hard to build without taking a broader, more holistic approach to developing your capabilities, capacities, and competencies to innovate. You ‘map’ and align these to fit your strategic goals and aspirations.

We have a pressing need to clarify a new ‘valuing model’ for building innovation capital and each organization has a unique bundle of the firm’s resources and assets. It is the ability to integrate, reconfigure, renew and recreate these resources and turn these into new, more dynamic capabilities that build on a continuous basis the innovation capital.

This is one of my most important focus points to assist and aid organizations in their understanding “what makes up their unique innovation capital” and what needs to be added to deepen and strengthen this capital stock.

Building our stock then leads to the flow that then leads to building more stock. We need both stocks and flow

Most of our capitals are learning capitals

The more we strengthen our knowledge and value our people the more we can generate new knowledge, build greater narratives, deepen discussions, make better connections and build our interactions out across growing communities. The more we discover, the more knowledge we gain and this leads up to determine a potentially better decision-making that should, in theory, give greater confidence that our invested financial capital is in ‘good hands’. Our knowledge learning, the more dynamic, the more we search, absorb, called absorptive capacity and then diffuse, the more valuable it becomes.

The power lies in the linkages we can forge, in the acquisition, in assimilation and then into the eventual transformation that allows known knowledge to become new wealth-generating innovation.

My stated value position is…

I provide different framing techniques for helping to grow this necessary innovation capital and build the stock of the capabilities and capacities to enable and increase the dynamic flow of innovation activities.

The post Defining Innovation Capital first appeared on Building Your Innovation & Ecosystem Intelligence.

Much of my focus within my work is to move organizations towards recognizing and expanding their innovation capital or stock.

The hard part for many organizations is that many of the key elements of innovation capital consist of many intangibles as well as tangibles and this needs deeper understanding and appreciation. These intangibles are in most cases non-technological and embodied in the organizational routines and thinking of the employees.

It is focusing on building the stock of this innovation capital as well as making the flow more dynamic, ever evolving, adapting and changing to the different conditions being presented to the company.

Some of the critical elements that need to be considered can be described as follows:

• Innovation strategy that relates to strategic choices a firm makes regarding its innovation
• The selection of the type of innovation that fits best the firm’s objectives and the allocation of resources to different types of innovations.
• Innovation culture that is the mixture of the innovation-related attitudes, experiences, beliefs and values of the employees
• The integrating function of environment, culture and climates that stimulates innovation activities.
• Innovation structure that are formed to make up the innovation process, its governance and supporting intent
• The approach within the organization and the way the employees engaged in the innovation and how they are grouped and measured
• Knowledge (technological and non-technological) possessed by the employees engaged in the innovation process as much of the knowledge is tacit to varying degrees.
• The stock of knowledge can be increased by internal and external learning of an organization

It is the abilities of our internal learning as ongoing provides the creation for new knowledge within the enterprise.

Stocks and flows need equal attention to build innovation capital

The ‘stock’ of innovation capital can render different productive value outcomes, is a bundle of the firm’s resources/assets and holds the renewal capabilities and they possesses attributes that make it a “strategic asset”

Innovation capital are made up of assets that are often context specific and interconnected and this makes it hard to build without a broad holistic approach

We have a pressing need to clarify a new ‘valuing model’ for building innovation capital and each organization has a unique bundle of the firms resources and assets. It is the ability to integrate, reconfigure, renew and recreate these resources and turn these into new, more dynamic capabilities.

This is one of my most important focus points to assist and aid organizations in their understanding “what makes up their unique innovation capital” and what needs to be added to deepen and strengthen this capital stock.

I provide different framing techniques for helping to grow this necessary innovation capital and the capacity to enable and increase the dynamic flow of innovation activities.

The post Understanding that innovation capital becomes your new core first appeared on Building Your Innovation & Ecosystem Intelligence.

We have to establish a way to map our ‘terrain of reality’ in not just how we are performing but what lost opportunities have slipped through, simply because we lacked the awareness to seize on these opportunities when we first spotted them.

We have significant gaps in our innovation capabilities and competencies. Have you ever really audited them? Taken them through a structured examination?

We do need to achieve a ‘reality’ check or we stay in a state of, forgive me, ignorance. We don’t see the possibilities we only see the possible and in today’s world that is a losers mentality. We need to push ourselves but before we do, we do need to know where we are.

Through my work on building the Innovation Fitness Landscapes that are relevant to you today and then structuring the place you want to be by starting to address the questions: are we focusing on the right ones to deliver on the challenges we are facing?”, “what can we do differently?” and “how can we identify those critical ones”? and “how can these be structured to clearly move us to the new capabilities we require?”

My role here is to be the guide towards building improved innovation capabilities and capacity

My role is to help in this task by identifying the opportunity spaces on where you need to focus your efforts‐ and apply the appropriate understanding and identify what resources are needed, so my job is to help you to navigate the terrain. Here is my journey outline described as a typical story that we all need envision and go through.

Through an innovation fitness landscape plan, you can access where you are and what needs to be achieved to get you to the desired point you see as where you need to be.

We call this “mapping the terrain of where you would like to be.” Your preferred place after you have accessed the competitive situation and what needs to differentiate yourselves, by being realistic about your present operational performance and a rigorous evaluation of how you can perform.

This is asking those searching questions around whether you have the commitment, resources, and determination to make a significant change in changing your capabilities or capacities to innovate. How are you both internally coping in an era of challenging technology change conditions but equally how you are seen to be externally coping with the pressures, rigors, and changes occurring in your marketplace.

You need to arrive at your preferred place after you have accessed the competitive situation and what needs to differentiate yourselves and being realistic about your present operational performance and a rigorous evaluation of how you can perform, whether you have the commitment, resources, and determination to make a significant change. How are you internally coping but equally how you are seen to be externally coping with the pressures, rigors, and changes occurring in your marketplace.

Arriving at a clear point of view

The intent is that we have to arrive at a clear “point of view” of both the reality of where you are and where you would like to be. These have to be explicit, to achieve a conscious awareness. I believe we have to go through some very specific and recognized steps, I outline the nine stages we need to work through the process here. These stages are a mixture of discussion, investigation and structured analysis and diagnostics.

This set of reality checks needs a clear, defining pathway in how the organization will need to change, a level of clarity of how you see your innovation capacity is not at the required level. Then we identify and describe the required outcomes of ‘fitness need’ of the structured work to be undertaken through the different parts of the Innovation Fitness Landscape assessment, establishing those capabilities you are likely to need, the more innovation dynamic capabilities. It is establishing these, that drive your innovation performance towards your stated needs and goals, ones to close the gap in present capabilities and required ones.

This moving from the present to the preferred requires this journey across the mapped terrain and the nature and character of that journey needs to be clarified, on what is needed from you and all the people involved to achieve your (transformation) goals. Those growing innovation dynamic capabilities become part of the enduring strategy that informs all those involved and mobilizes all that is needed to get you into this new innovation position.

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

These are the search for your dynamic points for innovation. These are unique to you, they make you distinctive. They lead you to new growth, new creations, new opportunities to innovate. You evolve. You constantly look to combine in different ways to stay ‘dynamic’ and sustaining. We are setting about building your innovation capital.

If you would like to learn more, then please contact me and we can set up a clarifying conversation to talk through this specifically, related to your unique position. Contact me at paul@agilityinnovation.com

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The post Peeling away the terrain of innovation reality first appeared on Building Your Innovation & Ecosystem Intelligence.

They might be operating at the two ends of the current internet trading spectrum and are coming from different market maturity positions but it is the asset management that is becoming critical for delivering the profit or dragging performance.

Now Amazon is far from “asset heavy” when you compare them to the Industrial companies like GE but asset orchestration is seemingly getting far greater management time for all companies it seems. The lighter you are, the more likely you are to be more flexible and adaptive to respond to more disruptive challenges being faced by industries that are undergoing the shift to being more “digitally enabled”. Alibaba is very much a good asset orchestrator.

I wrote a post some time back called “Asset Orchestration is required for more Dynamic Innovation” and offered a thought (or two) such as “you must orchestrate the capabilities, to purposefully build what is needed to deliver the final result”. At the time I had been reading some work undertaken to frame this asset orchestration by Sirmon et al during 2007 and 2008 that focused on the different actions of the manager, or asset orchestrator.

In this research they (Sirmon et al) suggest there are three primary stages of structuring, bundling and leveraging resources for the purpose of creating new value for customers and gaining competitive advantages, however temporary in today’s world. It is why this needs to be dynamic, ever evolving, to keep orchestrating your assets continually and it was not until recently I made a further set of connections into asset orchestration. Let me repeat these as they are increasingly important in the world of platforms and ecosystems.

Let me repeat these as they are increasingly important in the world of platforms and ecosystems.

The three primary stages of asset orchestration can be broken down:

• Structuring involves acquiring, accumulating and divesting resources to form the organization’s resource portfolio.

• Bundling of integrating resources to form capabilities, that can stabilize or provide incremental improvements to existing capabilities, or that enrich and extend existing current capabilities and thirdly, pioneer, which creates new capabilities.

• Leveraging involves a sequence of processes to exploit the organization’s capabilities to take advantage of specific market opportunities. This includes mobilizing, offering a clear plan or vision of needed capabilities, coordinating for ways to integrate these necessary capabilities and finally, deploying to achieve a resource advantage (or gain) that promotes market opportunities and instills more entrepreneurial strategies to exploit new resource configurations

A new moment of recognition for me was tucked away in my past research

The catalyst to this recent light bulb moment (well for me) was a thesis written by Javier Busquets, while at the Copenhagen Business School. His paper was “Orchestrating Network Behavior for Innovation“, written in 2010 but becoming increasing relevant to today’s world of managing assets more lightly.

We are seeing a change taking place around the building of networks and the way organizations are forming coalitions through ecosystems and platforms and in combining new technologies and blending business fields. Again I think Alibaba is doing a really good job of that. They are deliberate orchestrators. They are agenda setting, mobilizing, consolidating and coordinating different points of emerging value.

Within the thesis of Javier Busquets, he evaluates much of the published literature that ties up with dynamic capabilities, the network effect and capacity building and the constant way these orchestrators keep extracting more value from the network, that continues to expand.

I have been building my own understanding of these in (yet another) dedicated posting site for building Innovation Fitness Landscape Capabilities into Organizations.  Orchestrators seemingly are keeping pushing the boundaries and moving their relationships into this constant dynamic evolution. Arguable orchestrating, as seen this way, sets a new innovation path we all need to understand and I keep pursuing.

I particularly valued Javier’s Chapter 3: “Orchestrating Network Behaviour for Innovation” as it connected again a part of separating out in the ecosystem and platform work Jeffrey Phillips and I are undertaking, the differences between old economies and new is increasingly coming up.

One highly relevant observation

One comment he made was “orchestrating is a function of (1) changing the rules of the game to keep the game alive and (2) avoiding disruptions, thus ensuring continuity through the connection between the old and the new, or between past behavior patterns and the present and future ones.”  It is balancing the difference forces coming into play increasingly in a world of ecosystems and platforms of leveraging external resources and keeping them highly dynamic.

Shaping new boundaries

So is asset orchestration becoming increasingly critical in the age of ecosystems, platforms and managing technology and data? As we build our understanding of the power of this connectivity we are constantly changing the rules. As Javier Busquet suggests, it is about “shaping new boundaries“, ones of opening up new space, opportunities and sources of innovation, to build new platforms for discovery and collaboration potential and build new, differentiating capabilities to innovate.

Combining views- the three horizons and modes of commitment to innovation

One visual got me excited. It just fitted with my extended view of how the three horizons can be taken out and extended further. In adapting his original diagram I have added this 3H view.

It takes the 3H framework into the very need of today, developing the thinking of each of the three horizons to work towards our transformation from the solo organization offering (disconnected) products and services into ones that connect technology by platform participation and ecosystem exploration for greater innovation. Here is my adapted visual and opens up my thinking even further.

In summary

So I do feel asset orchestration is rapidly becoming a critical management need to manage effectively. It is recognizing its potential in managing the asset dynamics to deliver innovation that stays ahead of the curve as we expand out and collaborate on a range of platforms and ecosystem engagements to navigate towards a different future.

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The post The New Game Or Is It? Asset Orchestration first appeared on Building Your Innovation & Ecosystem Intelligence.

The critical role of innovation is without question needed for the future growth, wealth creation and organisations potential survival.

Who is to drive the human change required here within our business organisations?

I believe within our human resource groups they must provide the people solution to building innovation capacity, they should contribute to providing lasting design impact and central engagement role in building innovation into the core fabric of the organisation. They become central to helping deliver, distinctive, radical, even game-changing innovation and that needs clear, distinct capabilities, capacities and competencies to be design into and innovation management system.

Those in human resources should be good facilitators, the catalysts of leading change required to make innovation more centrally the core of our organisations. They need to  play a pivotal role in the needs to facilitate and underpin top-line growth with establishing the organisation design and deliver the resources for bottom-line impact, determining why people are the essential essence of innovation and how they are going to deliver this ‘resource’ into the innovative mix.

HR needs to make sure all the necessary structure and appropriate resources are designed into the organization, in every activity for making innovation the ‘way of life’ One that it is well understood as corporately vital, fully integrated in outcomes, that have definitive metric and measurement designed in ,resources well support and consistently trained and ensuring there is this ongoing, sustaining enhancing in building the innovation capabilities and capacities. They can help deliver the dynamics needed in innovation.

To take innovation into the organisations core needs HR

If HR took innovation into the core of organisational design, then a mandate for each person becomes a required necessity so as is to get fully involved and engaged in innovation activity. An essential part of this is to ensure the valuable experience is built-in, on an ongoing basis, that enhances the desired capabilities for the future of the organisation and themselves, to grow in confidence and experiences. If innovation is seen as core, you begin to break down the present barriers and mindsets that restrict innovation today by current behaviours, blocking innovating activity or placing constraints in allocating the required resources to ‘allow’ innovation to flourish.

HR can find clear ways to foster innovation in more open ways, it can cut across borders, discourage silo’s and promote collaboration. HR can become a powerful connector, platform provider for building networks, relationships and being a key component to building the learning that innovation requires.

Future leaders will be different

Future leaders need to emerge not from managing existing assets well but in managing in increased uncertainties, being more adaptive, agile and responsive to changing needs. CEO’s are demanding creativity, flexibility and speed to size up, quickly seize and grab breaking opportunity. These newer demanded skills come from knowing how and where to go, to be well-connected across platforms of knowledge, having close client connectivity and being able to extract all the essentials, resources and commitments to enable execution. Adaptability to constant change has a very different mindset to be developed in our future leaders.

HR- being on the cutting edge of innovation

HR does need to step up and define a new mandate for innovation and become essential in delivering a new cutting edge to innovation. If innovation is ever going to achieve a core place within organisations it has to be deliberately designed in for skill definitions, leadership development and knowledge and experiences gained. HR needs to cultivate, mobilise and capitalise the future design of innovation and then deliver this as part of the top team within organisations.

If this means employing external mentors, coaches and innovation expertise to bring HR up to speed, to help them to deepen their knowledge and the people connection, then it is well worth it. Care, of course, is in finding those that have the depth and breadth of required experience to work alongside them, to build up and transfer the appropriate understanding of those innovation needs.

I believe HR can determine where the true innovation premium lies, in the people and set about ensuring that the daily fabric of the organisation becomes innovation as a new core, well supported and constructed to deliver sustaining invention, creativity and innovative solutions to aid the growth organisations clearly need today.

HR clearly needs to take on a more pivotal role for innovation.

They can become central for a lasting place to plan and significantly contribute to building innovation capability and capacity, or stay more passive and operate always in the outer periphery of today’s business needs and watch as this role diminishes in the future corporate relevance, as it is one where innovation does need to play, to become core.

Building capabilities and capacities for innovation are essential to our organisation’s future well-being and for me, the HR groups within our organisations do need to step up and become far more engaged in constructing this innovation design through building the capacities needed.

Can HR step up to the challenge of laying out a clear organisations design for innovation and then deliver all the parts this means?

The post The role Human Resources can play in Innovation and its needed Design first appeared on Building Your Innovation & Ecosystem Intelligence.

The object of the game is to navigate one’s game piece, according to dice rolls, from the start (bottom square) to the finish (top square), helped or hindered by ladders and snakes respectively.

Originally from India the game is a simple race contest based on sheer luck and I am beginning to wonder if we are playing a new version of this with innovation? This is called “bust or boom” or “success or failure” or even “maybe or maybe not,” or even “will we, won’t we.” It just all depends on our luck in rolling the dice, a serendipity with a darker twist that many companies seem to be playing with their innovation capability building.

The game came to mind as I read through a recent survey on Innovation

I have just been reading an Innovation report / survey from Accenture called “Clear Vision, Cloudy Execution” and I really do think we are playing with innovation as a game, it has some really serious implications within it that need more drawing out than possibly offered in my view. We should be getting worried that many bigger companies are losing the innovation game.

Accenture in a survey conducted with 500 US Executives leads with this conclusion:

“US Executives are unrealistic in believing they have the capabilities they need to achieve their bold goals. The truth is that most struggle to generate the returns they seek from their innovation investments”

Yet it seems companies are confident in their innovation performance, awarding themselves high marks as innovators, even rating themselves as very positive in their performance against their (known) competitors. So tell me where is the growth then? Why are our public companies continuing to buy back their shares, shrink their work forces and continue to chase the cheaper investment alternatives of relocating where the tax breaks continue to bolster the returns of short-term thinking?

Accenture in their report details (this opens a PDF file) rightly  points out “confidence is a good thing” but in their experience “that companies that believe they have superior innovation capabilities are less likely to take steps to improve their innovation processes, culture, capabilities and operating models”

Also “that leaders are less likely to appreciate (and explain to management teams) that innovation is a complex discipline that requires diverse approaches“. This is when you are on the ascendancy (often mistakenly) and throwing the dice and progressing up the ladder of my snakes and ladders analogy.

The issue seems to be on not really understanding how they innovate or what is needed to innovate consistently.

The snakes that are all around, according to Accenture, are that companies don’t learn from past mistakes, miss market opportunities and are risk averse. They have badly slipped back on these.

It does seem to have become a “board” game of playing with innovation on a “shall we, shan’t we invest, sustain or allow” what we have gained to slither away as we roll the dice one more time. This time we land on the snake and slid back on our innovation progress from a series of market failures and often start again, often with a change in the innovation leadership.

Before I get ahead of myself let me explain the origin of snakes and ladders  

Referring to Wikipedia: the game snakes and ladders was originally from India. “The game was popular in ancient India by the name Moksha Patam. It was also associated with traditional Hindu philosophy contrasting karma and kama, or destiny and desire.

When the game was brought to England, the Indian virtues and vices were replaced by English ones in hopes of better reflecting Victorian doctrines of morality. Squares of Fulfillment, Grace and Success were accessible by ladders of Thrift, Penitence and Industry and snakes of Indulgence, Disobedience and Indolence caused one to end up in Illness, Disgrace and Poverty. While the Indian version of the game had snakes outnumbering ladders, the English counterpart was more forgiving as it contained each in the same amount.

This concept of equality signifies the cultural ideal that for every sin one commits, there exists another chance at redemption. Have we this same luxury with the management and building of innovation?

The sins we are still committing in the name of innovation pursuit.

The Accenture survey of executives and managers within 500 U.S. companies reveals that six in 10 (60 percent) said their companies do not learn from past mistakes. This is nearly double the 36 percent who admitted to this three years ago when Accenture last conducted a similar survey.

Nearly three-fourths (72 percent) indicate their firm’s often miss opportunities to exploit underdeveloped areas or markets versus 53 percent three years ago.

More than two-thirds (67 percent) believe their companies are risk averse, a large increase from 46 percent revealed in the previous survey.

The survey also shows that 82 percent admit they do not distinguish their innovation approaches between incremental versus large-scale transformational change – meaning they use a single “one-size-fits-all” approach to achieve different goals.

Also most respondents said they have “big” innovation ideas but are missing an organizational “home” with the company. So their ideas often go nowhere.

“A significant gap exists between what U.S. companies want to achieve in the innovation arena versus what they are able to do,” said Adi Alon, managing director, Accenture Strategy.  “They want to innovate yet they need to take different and bolder actions to achieve transformational, major revenue-generating innovation. True innovation requires aggressive changes in technologies, operating models and talent.”

The recognition that the chances of redemption are certainly getting less

Yet also emerging from this survey was this really far more bullish view on disruptive innovation compared to the survey undertaken three years ago.

For instance, 84 percent said they believe innovation is key for their long-term success compared with 67 percent three years ago.

The same percentage of respondents – 84 percent – said they are looking for the “next silver bullet,” meaning a market-defining innovation rather than incremental iterations of the same products.

Creating new products is a priority for almost half (47 percent) of respondents, an increase of 20 percentage points from three years ago.

Accenture believes the building blocks of successful innovation are being put into place, few have assembled those fundamental elements in a way that drives the changes needed to generate the investment returns. I would really disagree with this with what they are indicating as the “sins of slippage” reported.

Accenture conclude “companies are embracing innovation as a tool to drive their business forward” but “they need to learn how to flex their innovation muscles with new thinking, new collaborations and new approaches to execution.”

They also are suggesting that it seems organizations have not yet learned clearly enough on how they innovate and can’t distinguish beyond achieving incremental performance gains and this executive desire wishing for transformational change. It still seems hugely at odds with their actual record (of performance) and the realities, shown in their responses to this survey and their belief and assertions of having innovation prowess and dominance. There is a significant mismatch occurring. This needs a far greater “call out” to recognize this set of inherent weaknesses.

Companies are seemingly playing this innovation game of ‘snakes and ladders’, rolling the dice expecting the “silver bullet” to power them up the winning ladder but then finding themselves suddenly landing on the snake (of reality) to slip back down. Innovation seems to still be left to chance, just like my game suggested and that is a risky game.

There are more snakes than ladders in the new board game of innovation

It is about time this “board game” of innovation snakes and ladders is put away and recognizes we are far more playing the “game of thrones” where the struggle is constantly evolving Kings and queens, knights and renegades, liars, lords and honest men…we are in a disruptive world where we are all wanting to play the ‘Game of Thrones.’

This game of thrones includes start-ups, entrepreneurs, venture capitalists, competitors unheard of previously as suddenly arriving, emerging entities from ‘distant’ lands and those who see as adjacent or making new combinations powered by collaboration and new technologies, all wanting to surround and dethrone the incumbent. This is today’s reality.

Listening to the messenger we might be mistaking our real position

I disagree with Accenture that “embracing innovation as a tool,” it needs to be a real core, not simply a tool ,within our companies; better funded, understood and defended, it should not slip back as it seems to have done, indicated by the results from this survey.

Equally I feel in the results that companies are not on the right path unless we enjoy the game of constantly slipping back is not how I would be reading these results, yet Accenture are suggesting this.

I do think they (Accenture) have some of their conclusions wrong and are not delivering the serious messages this survey is bringing out in a way they should. Innovation is not a game to be left to chance, the roll of the dice or the ‘quiet’ acceptance of playing seemingly ‘snakes and ladders’ with it.

Having “building blocks being put into place” after years of talking about innovation is a real concern. I would have thought companies should be far more ahead than this. If the survey results are indicating such deterioration’s in some of the most critical aspects I feel the report seems more advocating a “quiet acceptance” whereas the results are a disaster.

I can’t understand the approach here. I would argue Big Corporate America is deluding itself on its innovation prowess it has serious issues to address if it truly believes growth will come from innovation if it is accepting this deteriorating outcome. It is the consultants role, from its data, to paint the ‘realities’ of this in starker ways. I would.

Accenture might have reported this outcome differently than it chose too. I think they missed the opportunity to deliver a darker warning here. Perhaps they felt not equipped to deliver this starker message but I believe they should have, the deterioration is worrying.

The world is not waiting for those steadily putting in place their building blocks

In my take on the world today, the reality is, we are all facing an increasing world of disruption and simply believing in finding (by chance) or just looking for that ‘silver bullet’ is not a winning position, it is a gambling one. Have our larger companies taken up the role of a gambler, enjoying the thrill of simply rolling the dice but more than likely not have more than ‘equal chance’ of winning the game. Are they feeling beaten already? It increasingly seems so. Innovation is an imperative we can’t afford to let slip back.

Having a good, clear focus on innovation, its value, contribution and the commitment it needs helps stack the winning odds in your favor or at least, equips you to fight in a really changing, challenging world we are presently in.

The real warning signs big US business is in deep serious innovation trouble

It does still seem that many US executives are deluding themselves on their innovation competences. Their mistaken beliefs and lack of real understanding of the complexities within good innovation management should not left to the ebbs and flows of chance, whim or short-term thinking. The need is by seriously putting into place a dedicated structure, well resourced and competent team,  built from a comprehensive understanding of innovation and its management. That requires a deeper thinking than most are prepared to do.

If executives continue to accept not to learn from past mistakes, constantly miss opportunities to exploit, big ideas are going nowhere and remain risk adverse, yet they keep looking for the ‘silver bullet’ as their solution, they are in deep trouble.

Watch out others are playing a different game

It is far more likely to come far too late for many incumbents as others, schooled in lean and agile thinking, searching for unmet needs or under-served opportunities will have disrupted them, well before this as they are constantly learning from their mistakes, consistently experimenting, exploring and exploiting opportunities by pivoting constantly, in the pursue of big ideas and embracing risk. That is a bedrock of much of the thinking that goes into innovation, market development, change exploration and growth generation

I would be very troubled to read this Accenture report if I was Corporate America.

The tone of US companies being on the right pathway, suggested by the authors, doesn’t help when you have such big boulders causing giant gaps in this innovation journey. It does seem the need to find a new pathway of innovation needs urgently finding.

We can’t afford to play this game of ‘snakes and ladders’ with innovation anymore and this survey should be a real wake up call to all those living in their ‘corporate’ ivory towers the real world is ‘eating you for breakfast, lunch and dinner’, the attacks on your established positions are constant, global and relentless. If you don’t feel surrounded, you soon will be.

This is the right time to wake up to the realities and reading a report / survey as seemingly benign but potentially lethal as this one from Accenture, one that on first read it might seem, is ‘clothed’ in reassuring tones,  yet it does seem to have some very worrying messages within it, believe me.

I would be very worried within the large US companies equally if they just take the suggested medicine offered here in this survey , they need to really forge a new more radical innovation pathway but will they simply keep playing the innovation snakes and ladders they seem to be doing?

The post Are we playing snakes and ladders with innovation? first appeared on Building Your Innovation & Ecosystem Intelligence.

Many innovators are simply happily working away with no specific guidelines, apart from the general remit of “we need to be more innovative”, it lies in the boardroom that is not communicating the board’s needs clearly enough down the organization.

Building up our capacity to innovate does need to understand and reflect the organization’s business activities, as innovators need to grasp the value creation aspects that will deliver the necessary capital-efficient and profitable growth, and then ‘go in pursuit’ to achieve their contribution to these goals.

Even the basic questions often remain unclear, those of how are we looking to grow revenue, save costs, reduce working capital or improve our fixed capital? Managing our innovation activities can help in all of these. Actually if you ask I expect the CFO would say “all of them” but each does have implications on understanding of the fit and eventual role of innovation’s contribution.

Then where equally does risk fit into the strategic equation for innovation?

Innovators often lack the clarity or governance guidelines to know if they can or can’t ‘push’ for groundbreaking innovation.

Risk is kept vague so we can often avoid the unknowns associated with any really different innovation, it becomes ‘the art of avoidance’ by the person who wants innovation but not the risks associated with it.

Innovation is not the usual

Recently in a PA Consulting report called “Innovation as Unusual” they were suggesting the innovation spend just in the UK alone, is flushing some £65 billion down the drain each year, as nearly half the organizations waste good ideas, are far to risk averse and fail to invest boldly around more ground-breaking ideas.

So we are still seeing the majority of organizations are struggling with innovation and in the process they are losing out financially, forgoing huge opportunities in not achieving future competitive positions or foregoing the chances to radically alter their market position. It seems innovation remains incoherent within many organizations still.

PA Consulting in this report were suggesting there are five innovation killers – fear, lack of focus, innovation engine failure, the wrong ROI and finally, a real reluctance to invest. Pretty bad I think?

In one of the outcomes of the report it asks “can we continue to allow 47% of senior executives to describe their innovation activity as a ‘costly failure’?”
Some things need to radically change and having ‘coherence in the innovation activity needs to be central to this needed change. So where do we start?

Maybe we should all start visualizing first.

Recently XPLANE, visualization thinkers who apply a design thinkers approach, produced two brilliant visualizations on the organization, one as the Cost of Confusion and the other as the Value of Clarity. (direct pdf links)
Xplane quite rightly suggests that a picture is worth a thousand words, well for me, these two visualizations I would regard are worth millions to any organization wanting to understanding why their strategy and innovation efforts go wrong and how to begin to put them right.

I would suggest you download them and circulate these around your organization, starting with all your board members and then you really can begin to enter that necessary set of discussions about coherence or a lack of it.

Leveraging the power of the three horizon methodology for innovation

I greatly favor the three horizon methodology to work through for achieving this coherence in understanding. The three horizons offer an excellent framing technique to bring this ‘coherence’ that we need from our ‘here and know’ activities and future innovation efforts. This coherence leads onto knowing what innovation capabilities are needed, what are missing and those really critical ones required to defend the core more effectively alongside (yet separately) needed to expand the potential in the future.

Dedicating time to knowing your innovation capability fitness

I have been constantly working away at what constitutes the dynamic capabilities for innovation and those, shall we say as more static and simply repetitive. It is identifying the difference, and then knowing how to apply these that are dynamic and highly valuable to obtain, against those that simply require a little dampening down.

We then ‘map’ these to the innovation needed to build a growing innovation capability set. This work has a dedicated website for the building up of the case for focusing on this under www.innovationfitnessdynamics.com.

Knowing what are the critical factors for innovation and their dependence for sustaining innovation success is becoming such a vital necessity to understand so an organization can place the appropriate resources behind them.

The question is, which are critical, which naturally occur when others begin to be put into place, which seems to have limited or no real effect on changing the dynamics of innovation?

Deciding that capabilities can be better leveraged requires a separation of exploit and explore.

The aligning of strategic direction (and importance) with any capability needs is in the understanding of what activities are diverging with the core and those converging.

Then we need to figure out the future core and start moving towards it. It is the two dynamics of exploitation and exploration we should be leveraging for our innovation and future growth.

Today we need to exploit and explore and our capabilities need to be built fit for one of these two purposes. Exploiting is today’s business need, to leverage and improve on the existing business and equally, in parallel, explore for tomorrow’s new business growth.

The need to diverge and converge

The diverging ones need to have a real emphasis on improving performance, how they are managed for cash or to eventually sell or dispose of. Then we have those that are converging onto the new ‘known’ core of the business to grow and expand.

So by recognizing these, and that is not easy in itself, you are beginning to know and identify the capabilities you need to have in place to fix today so as to make it as healthy as possible, alongside those new capabilities that will create a new winning set of growth and value propositions that give the ‘promise’ of what can come by applying different mindsets, resources and thinking.

We certainly need bolder investments in knowledge around the make-up of innovation capabilities

I certainly believe there is a real call for fresh and bolder investments in knowledge, in infrastructure that focus on activities that spur new approaches that lead to innovation. These are not just the traditional ones based on managing today’s core.

It is finding those innovations that provide new value, the new generation activity that is occurring from recognizing how we can build, yes build for further exploitation (extending the life) and exploration (new understanding) and manage each as separate risk evaluation exercises with different metrics of progress.

We also need a deeper innovation grounding of internal workings and alignment

What I feel we need is a deeper grounding in what is actually going on inside organizations within their innovation activities and how these align to the needs of strategy and what is clearly missing. We start here as it gives us all this clarity and coherence, missing in much of our existing understanding.

We have the real opportunity today, in finding new ways in combining the four emerging forces of knowledge, technology, entrepreneurship and innovation, which will drive the growth models of tomorrow. It is these that are forming the new innovations ‘black box.’

It is mastering this new ‘black box’ of actual innovation activities, exploring and exploiting the necessary innovation capabilities that are required to be ‘going on’ in organizations to achieve a closer coherence, one that can radically improve the innovation performance.

I have plenty of ideas, frames and methods built up to help you make innovation fit and be more coherent in its contribution.

The post Achieving Innovations Capability Coherence first appeared on Building Your Innovation & Ecosystem Intelligence.

“Innovation capital is the sum of all that promotes the development and changes required for achieving innovation outcomes, within one organization or its broader networked environment, for market place advantage”

“These are made up of the resources, processes, knowledge and capabilities, that are constantly evolving and highly dynamic to build greater innovating capacity.”

“These build upon the capabilities of ‘sensing, seizing and transforming’ to build new capital that focus more upon the dynamics within innovation, that provide the true value creation in successful outcomes in final product, services or executing within business models”

We need to value both “stocks and flows” in equal attention to build innovation capital

The ‘stock’ of innovation capital can render different productive value outcomes, is a bundle of the firm’s resources/assets and holds the renewal capabilities and they possesses attributes that make it a “strategic asset”

Innovation capital is made up of many different assets that are often context specific and interconnected and this makes it hard to build without taking a broader, more holistic approach to developing your capabilities, capacities and competencies to innovate. You ‘map’ and align these to fit your strategic goals and aspirations.

We have a pressing need to clarify a new ‘valuing model’ for building innovation capital and each organization has a unique bundle of the firms resources and assets. It is the ability to integrate, reconfigure, renew and recreate these resources and turn these into new, more dynamic capabilities that builds on a continuous basis the innovation capital.

This is one of my most important focus points to assist and aid organizations in their understanding “what makes up their unique innovation capital” and what needs to be added to deepen and strengthen this capital stock.

Building our stock then leads to the flow that then leads to building more stock. We need both stocks and flow

Most of our capitals are learning capitals

The more we strengthen our knowledge and value our people the more we can generate new knowledge, build greater narratives, deepen discussions, make better connections and build our interactions out across growing communities. The more we discover, the more knowledge we gain and this leads up to determine a potentially better decision-making that should, in theory, give greater confidence that our invested financial capital is in ‘good hands’. Our knowledge learning, the more dynamic, the more we search, absorb, called absorptive capacity and then diffuse, the more valuable it becomes.

The power lies in the linkages we can forge, in acquisition, in assimilation and then into eventual transformation that allows known knowledge to become new wealth-generating innovation.

My stated value position is…

I provide different framing techniques for helping to grow this necessary innovation capital and build the stock of the capabilities and capacities to enable and increase the dynamic flow of innovation activities.

The post Defining Innovation Capital first appeared on Building Your Innovation & Ecosystem Intelligence.

Much of my focus within my work is to move organizations towards recognizing and expanding their innovation capital or stock.

The hard part for many organizations is that many of the key elements of innovation capital consist of many intangibles as well as tangibles and this needs deeper understanding and appreciation. These intangibles are in most cases non-technological and embodied in the organizational routines and thinking of the employees.

It is focusing on building the stock of this innovation capital as well as making the flow more dynamic, ever evolving, adapting and changing to the different conditions being presented to the company.

Some of the critical elements that need to be considered can be described as follows:

• Innovation strategy that relates to strategic choices a firm makes regarding its innovation
• The selection of the type of innovation that fits best the firm’s objectives and the allocation of resources to different types of innovations.
• Innovation culture that is the mixture of the innovation-related attitudes, experiences, beliefs and values of the employees
• The integrating function of environment, culture and climates that stimulates innovation activities.
• Innovation structure that are formed to make up the innovation process, its governance and supporting intent
• The approach within the organization and the way the employees engaged in the innovation and how they are grouped and measured
• Knowledge (technological and non-technological) possessed by the employees engaged in the innovation process as much of the knowledge is tacit to varying degrees.
• The stock of knowledge can be increased by internal and external learning of an organization

It is the abilities of our internal learning as ongoing provides the creation for new knowledge within the enterprise.

Stocks and flows need equal attention to build innovation capital

The ‘stock’ of innovation capital can render different productive value outcomes, is a bundle of the firm’s resources/assets and holds the renewal capabilities and they possesses attributes that make it a “strategic asset”

Innovation capital are made up of assets that are often context specific and interconnected and this makes it hard to build without a broad holistic approach

We have a pressing need to clarify a new ‘valuing model’ for building innovation capital and each organization has a unique bundle of the firms resources and assets. It is the ability to integrate, reconfigure, renew and recreate these resources and turn these into new, more dynamic capabilities.

This is one of my most important focus points to assist and aid organizations in their understanding “what makes up their unique innovation capital” and what needs to be added to deepen and strengthen this capital stock.

I provide different framing techniques for helping to grow this necessary innovation capital and the capacity to enable and increase the dynamic flow of innovation activities.

The post Understanding that innovation capital becomes your new core first appeared on Building Your Innovation & Ecosystem Intelligence.

I recently participated in a survey for APQC that was looking to identify the hot topics within product development and innovation. One or two hot spots surprised me, others less so.

In the round-up of results almost two-thirds of survey respondents have placed refining the identification of customer needs and remaining competitive in terms of profit at the top of their product development agendas. I like the increasing emphasis on identifying customer needs

Among the potential research areas respondents were asked about, they felt that developing talent to drive innovation was the most important. The second one was around rapid product development: How to Move Products to Market Faster.

The one that really caught my eye was organizations have allocated the most funds to improvement in developing talent to drive innovation. This is heartening but also a worry.

We need to really stop and think about this before spending further funds

I think before we jump into spending more funds on developing talent to drive innovation are our organizations that clear on what they want innovation to achieve? Growth is one but how? What type of innovation is needed, what are the implications? Have we created the right conditions? I could go on but spending to develop your talent to drive innovation you do need a good understanding of the what for and where this needs directing.

A second voice of concern also caught my attention

Also this week a conversation caught my attention that confirms this growing concern I have had that innovation is becoming a major strategic issue. It does seem Strategy and Innovation concerns have converged.

Recently Rita Gunter McGrath a Professor at Columbia Business School and certainly globally recognized expert on strategy in uncertain and volatile environments was discussing the three top hot button concerns at the leadership level of large organizations. She discusses this here with Booz & Co.

So what are hot button issues keeping our leaders up at night according to Rita McGrath?

The three hot buttons she is constantly hearing across organizations are firstly leaders feel their organizations have not got the right talent or skills in the right place to lead projects.

The second is around the struggle of innovation and growth, and they are simply struggling in how to do innovation. In Rita McGrath’s view the organizations do not have systematic systems in place, when organizations do innovation it tends to be ‘one offs’.

The third and final hot button at present at the strategic level is a lack of line of sight and worrying about what is actually going on. These are leaving leaders not comfortable to make clear, confident decisions.

So are we seeing the effects of how our organizations have been managed over the last few years?  Is it all coming home to roost? The leadership may worry over innovation and poor growth but it is in really in their hands to do something about it. Spending funds on developing talent to drive innovation is part of the equation but it is only part.

So how are we going to develop our talent for innovation?

Does the leadership of organizations ever listen or read about innovation in enough detail to understand all the implications, constraints and pieces to put into place? Have they recognized their role within developing innovation as a core discipline within their organizations?

To care about developing a clear, strong innovation set of capabilities you need to observe and reflect on what is causing poor innovation results. A significant portion of the blame is because the leadership, for whatever reason, simply does not get fully involved. They need to determine and build the innovation capabilities into the core of their organizations day-to-day operations. It needs to be recognized as a core competence alongside all others.

How often do we hear about the constant time spent on validating innovation, arguing the innovations corner, the pleading for more resources, the layering on of unnecessary structure, demanding impossible ROI’s and the intense focus on the short-term. Innovation is often just failing to connect into the mainstream of organizations, yet we are told our leaders are worried about growth, not having enough developed talent to manage innovation and the projects yet innovation is in their top priorities.

 Yet they worry over ‘line of sight’. Their third hot button

Of course they do, innovation is constantly being driven into the dark corners of the organization, it is being treated as opportunistic, like a light bulb you can turn on or off when it suits the whims and fickleness that our organizations leaders often seeking to respond to a crisis expecting innovation to dig them out of it. Innovation needs to become systematic.

Innovation needs far more serious attention at the top of our organizations, it needs strategic innovation leadership. Until leadership leads by focusing back on the longer-term, innovation is going to deliver continued disappointments. Also leadership in organizations requires stability to sustain and deliver on their initial promise.

Aligning leadership, the strategy needs with innovation activity.

Leadership needs to recognize their role in making innovation a more sustaining discipline. They need to give this a focus where they initiate and provide the essential strategic inputs into a well-designed innovation framework and ensure this is put in place.

To develop the talent to drive innovation you have to put into place all the conditions, structures and guidance this needs. I’ve written consistently about the need for this by suggesting the value of the Executive Innovation Work Mat approach.

Setting the strategic innovation framework through this work mat approach allows for the structure to be put into place that will develop the talent to drive innovation. It provides the conditions and strategic innovation guidance.

Resolution for innovation starts at the top.

If our business leaders want to resolve the present hot buttons of poor growth, sporadic innovation and achieve a clear line of sight as Rita McGrath is suggesting, then I’d suggest you take the time to read what I have written about this, here on this site by entering ‘work mat’ into the search box for starters.

Gaining better understanding of structuring and building innovation capabilities

Building innovation capabilities to drive innovation takes time. I would suggest you find the opportunity to read the ‘White paper’ or the foundation document on this innovation work mat. Also some of the supporting articles over at my Issuu dedicated page here, where you can find different papers that can be visually picked out by the one to six billiard balls to understand the thinking behind this framework further.

Try to answer the seven parts to the innovation leader’s litmus test or exploring the ten great intractables for innovation resolution.  Each prompts the thinking. Innovation needs to challenge prevailing organizational thinking. Innovation surprisingly enough does needs to be justified so as to build its sustaining business case . it is through this structuring you gain the serious attention of senior management for them to address the role they play within this innovation framing.

I would argue you need to make the innovation value proposition afresh

Then, and I am being deadly serious here, you need to go and actually sell what systematic innovation really means as a real value proposition to the leadership.

This VP needs to focus on what needs to be done to turn innovation into the engine of growth and through its strategic design, put in place the vehicle to attract and develop this innovation talent. You are tackling the leaderships hot buttons of concern.

Any development of talent needs a well-structured approach but you need to put in place an awful lot to really give the type of returns these ‘driving innovation’ needs. If leaders are worried about poor growth, disappointed with innovation and worry over ‘line of sight’ then innovation capability needs radically redesigning. Much of the present innovation is caught in a legacy trap, this needs overhauling. How will you think about addressing this?

Do you want to really develop the talent to drive innovation? If so then talk to me, I believe I can deliver a clear return on your investment of allocated funds.

The post Developing talent to drive innovation first appeared on Building Your Innovation & Ecosystem Intelligence.