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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The post Building Differentiating Capabilities for Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

We need to clarify how to identify the existing prevailing or dominant system and the challenges to its sustainability into the future, i.e. the case for change (horizon 1). Innovation can lose the ‘fit’ aspects over time as the external environment changes.

We also need to think through the desirable future state, the ideal system you desire and the emerging options. Those that can displace what you already have. Often you can find elements in the present that give you encouragement (horizon 3); keeping yourself open to all options that could lead to transformational change.

Often the struggle is to draw out the nature of the tensions and dilemmas between vision and reality, and the distinction between innovations that serve to prolong the status quo and those that serve to bring the third horizon vision closer to reality (horizon 2); This is the space of transition, often unstable, called the intermediate space where views can collide and diverge.

We work this framework in a specific sequence of H1 – H3 – H2.

There is a good reason we look at H1, then H3 and then H2 in that order. Horizon two is the toughest one, as it needs to balance between today’s existing innovation and those seen as important to the future. H2 is you transition horizon, one where you need to learn, to gather, to pilot, prototype, place limited bets and investment to learn and adjust as you work towards improving your understanding and knowledge for making the ultimate move of managing what is or shaping in horizon three.

To get there, you will adjust, pivot and constantly reshape as you learn and experiment. This is the value of this horizon 2 as you work out how the landscape is changing and requiring constant adjustments. The horizon 2 tends to work on those sustaining innovations (h2-) and those transformative innovations (h2+).

There are always plenty of uncertainties to map and resolve
Clearly it’s not acceptable to stay still and be good at what you already do and expect this to just continue out into the future. We need to consciously evolve in how to counterbalance today’s business needs with new business opportunities offered out in Horizons 2 and 3. These are providing you with a more robust innovation portfolio of options under investigation and development.

Having different perspectives will enhance your innovation activities
The 3H framework offers a perspective that accepts the need to both address the multiple challenges that occur in the first horizon, foster the seeds of the third and, allocate appropriate focus and resources to manage the transitions from one to another. We secure, build and explore across these different horizons.

What makes the model valuable to innovators is that it ‘accepts’ that competition is restless, markets are evolving, and that change is a constant. The three horizons approach offers the methodology for constructing plausible and coherent innovation activities projected out into the future. It looks for emerging winners.

This is not a planning tool; it is providing a valuable evolutionary perspective that dialogues can be formed around so decisions on where to focus and what resources to apply can be made on a more plausible and coherent set of activities, projected into the future, searching for emerging winners that can change and challenge your existing business.

The need is to address the challenges in horizon one and nurture the seeds of the third. It is not an either/or, good/bad discussion. You need those robust discussions to form fresh perspectives. The key is in listening out and becoming adept at managing these conversations between the ‘voices’ of the three horizons.

The three voices that need to be in the same room
The different voices involved can be highly engaged, all wanting to add their perspective:

• You have the voice of today, the incumbent, the manager(s) responsible for delivering today’s result, very much operational and result orientated, that are more concerned with managing the existing, maximizing returns and keeping the organization going efficiently and effectively.
• Then you have the second voice, the voice of the entrepreneur, the one eager to experiment, try out new things, wanting to push further, to explore and extend, accepting some aspects will not work but keen to investigate, experiment and learning from these discoveries.
• Last we have the third voice, the voice of the aspirant, who is looking to build a different vision, believing in different, more pioneering, perhaps radical solutions that seeks to visualize things in their ‘mind’s eye’, far more aspirational. This concepts often can seemingly look on first ‘take’ to be totally incompatible to the reality of today but are picking up on ‘weak signals’ that are out there that signify a changing future that might impact your own.

It is the combination of these different three voices that need to come together and frame the innovation journey by using the three horizons framework.
You really should give it a far greater consideration within your innovation toolbox, it ‘aids’ the framing of your present to future needs and gives ‘voice’ to all the different thinking and opinions on building the innovation pipeline, balancing the portfolio and helping to identify all the gaps and opportunities that need resolution.
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Publishing note:  This blog post was originally written on behalf of Hype and with their permission I have republished it on my own site with some small adjustments. I recommend you should visit the Hype blog site where they have a range of contributors writing about a wide-ranging mix of ideas and thoughts around innovation, its well worth the visit

The post Drawing out the different voices within the three horizon methodology for Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

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

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

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

By learning from these experiments or adaptive walks you can quickly operationalize routines that can be quickly absorbed across the organization and so reduce uncertainties and strengthen the capabilities.

The ability to create ‘natural tensions’ from this fitness learning triggers the need to further explore and search out different combinations, this adds even further to your dynamics of innovation understanding.

Tensions can be healthy if channeled correctly, these are the ‘value insight’ moments where diverse knowledge suddenly combines into new potential innovation activity.

We need to search for clear distinctive capabilities so they can emerge and combine in new ways; these are your dynamic points for innovation.

* These are unique to you, they make you distinctive.

* They lead you to new growth, new creations, and new opportunities to innovate.

* You evolve. You constantly look to combine in different ways to stay ‘dynamic’ and sustaining.

If you would like to learn more then please contact me and we can set up a ‘decent’ conversation or meeting to talk through this specifically. Contact paul*AT*agilityinnovation.com

Of course there is a terrific amount of good material on this website to explore and to help you. I encourage you to do just that, to go on your own ‘walkabout’ of this site, take the appropriate time and then we can begin the expedition this is more ‘fit for purpose’ for you and your organization’s specific needs.

The post Greater fitness in innovation offers more value creation potential first appeared on Building Your Innovation & Ecosystem Intelligence.

We are sometimes comfortable or confident enough to move into adjacent areas, to expand and feed off the core but these are less than transformational in most cases. This space is the one we are the most comfortable to work within, this is the horizon one of the three horizon model approach outlined to manage innovation across a more balanced portfolio of investment.

In summary, the three horizon model for innovation is actually a reasonably simple idea: with Horizon One (h1) being the current business focus, Horizon Two (h2) being more the related emerging business opportunities and Horizon Three (h3) being those that are moving towards a completely new business that can have the potential to disrupt the existing one.

The complexity lies underneath this simple idea, you need to manage these different horizons with completely different mindsets. You need clear well-structured ways to extract the real return from managing a comprehensive innovation portfolio based on knowledge, experience, intelligence but exploring plenty of the unknowns about the future and openness to get you there, as ready as you can be . Its necessary today.

The seeds of destruction lie in horizon one

Within our ‘business as usual’ attitudes lies the seeds of destruction. Today there is a relentless pace; we are facing stagnation in many maturing markets. We place a disproportionately high amount of our resources here to defend what we have and what we know; we actually subvert the future to prolong the life of the existing. We constantly look to make it more efficient and more effective but this is in the majority of cases just incremental in what we do, both in innovation and our activities. These are often simply propping up the past success instead of shifting the resources into the investments of the future.

This is why the three horizon approach has real sustaining value because if we don’t have this longer-term, transformational perspective we are just prolonging the existing until it gets disrupted by others. This is where the working across different horizons for ‘thinking’ through innovation does need different tools and mindsets and these should be based on (h1) see and operate, (h2) adjust your thinking frame and solutions, (h3) more evolutionary. Each has different techniques to explore as I’ve previously outlined in my navigation guide to this approach.

Clayton Christensen has written about this theory of disruption in his book “The Innovator’s Dilemma”. Professor Christensen then went on to write extensively on this and one further book “Seeing What’s Next” co-authored with Scott Anthony and Erik Roth develops this disruptive theory into how the future will unfold and how to make wiser choices on these insights. The three horizon connecting approach is an excellent methodology to use to help in managing these wiser choices.

The hardest part is to traverse across into horizon 2 for new ‘breaking’ innovation

We do need this longer-term perspective and we do need to traverse into the future in clear thinking through steps (or horizons). Our horizon one does begin to decay faster today than ever, it does not fully cover off the strategic fit we want and can begin to lose its dominance over time. We need to manage this transition, not let others manage it for us.

It is how we manage this transition becomes so critical. We need to exploit developing trends that are emerging (h2) and begin to tune into possible options in the future (h3).  Within these options will emerge the winners and become the more dominant systems or solutions that we should be moving towards, even from today. Some of these only have faint emerging signals but they need to be brought into the innovation portfolio activity to explore, often in novel ways.

The horizon two is beginning to address some of the current decay arising from the core within the existing activities (or system). Here we have the highest tension.

The discussions that centre on often conflicting views of the future, compared to the existing realities and those providing the returns for today’s business. Often we can detect change but we consciously ignore it. This is the place where the disruptor’s are at work, existing or new competitors, working at displacing your products and market positions. They look to be more agile, they might have greater entrepreneurial ways, they are ready to explore emerging practices far more than the established leaders, they look to leverage different business models and are certainly not handicapped with legacy and mindsets stuck in the past. Increasing competition is today’s certainty.

Horizon Two needs a totally different mindset.

You need to see H2 with different metrics, with different perspectives, with more open minds. This is not easy. This needs to become the meeting point or “the space for transition” where you begin to let go of just protecting your core and open up your thinking to experimentation, prototyping, exploring different business models and begin to figure out how these will impact your existing core, to become more agile and adaptive than you are in the existing system or structures

These horizon (h2) concepts being explored  really do need ‘ring fencing,’ so you can protect these from all the ‘vested’ claims that your horizon one focus will continually demand to keep, so as to bring in the results in this calendar year. It is a real fight, these ideas or nascent concepts ‘give off’ negative results, they are still a mix of the tangible and intangibles where you can’t get the ‘hard’ fix on the ROI, on their real market value or potential.

Many executives ‘defending’ the core will ‘attack’ or hold back any release of their resources to help these emerging initiatives. It is a ‘hard-nosed’ reality.  It needs a very high level and conscious set of decisions coming from the top to determine these new moves. Do not believe that when most executives ‘just’ react and shrug their shoulders regarding h2 as a natural, everyday occurrence, it is far from not. Many have to come ‘kicking and screaming’ to supporting emerging activities. Far too much ‘invested’ interest comes into play. They see this more as a threat not an opportunity. It is not their sand box so why should they ‘play’.

The tensions are not just visible but played out in many subversive ways.

Just take performance metrics, if these are solely structured on the calendar year, are you realistically expecting a dilution of focus as their compensation is totally caught up  in this. Horizon two poses a real challenge within any management of our organizations. If it provides current small bases of volume, no real meaningful profit from the investments made it can be a hard sell across the organization.

Projects that focus on the future work mostly are based on ‘best’ assumptions. Sadly it is often executives expect to see the same ‘hard’ metrics being applied as the existing business. We ignore significant differences and  this is a huge mistake. So you get these clear sense that many are sceptical or pay lip service to the products of the future as the thinking, judgement and value orientation are at such odds with the existing measures and metrics they apply to run today’s business and how they get judged.

Often we then impose a set of metrics to compensate for this resistance.

This allows for a sudden rush of promising new products entering the market, of chasing and competing for those same resources as the ones focused on the core. The push to validate, explore and experiment might make the situation worse. You introduce waves of inefficiency into your highly tuned supply chain, you detract from selling and competing in tough market conditions and you then hear that comment “we took our eye off the ball”

This new ‘push’ for establishing the rising stars ends up that most of the promising concepts never really cross the finish line of moving from ‘interesting’ to main stream. The core also starts to suffer from these multiple distractions and eventually ‘innovation’ gets a bad rap. Many promising ideas get starved or killed off from emotional reactions.

The demand from supporting horizon two products or emerging concepts demands managements serious attention to getting resource allocation, response and focus into ‘actively’ managing this very real and tangible ‘innovators dilemma’.

Managing the rising stars or future potential one is hard in existing structures.

The concepts that emerge from horizon two will include the rising stars of the organization and will, over time, become even the new core business. These are a mixture of step-outs from today’s core, or extensions that have come from the adjacency work consciously being undertaken or are truly emerging as new activities that need new depth in capabilities and time to build.

These all have the potential to shift the organizations revenue base and challenge today’s cash generators. These need careful ‘portfolio and resource’ allocation. These extend the organization from your existing into new competencies, new markets and new challenges. Just please don’t use the same measures or metrics when you mix H1 and H2, although there is a huge temptation because it is just simply easy.

Horizon two is where you work through your future options

This is where you try out, experiment, explore. This is the transiting point (my space of transition) where you work through different dilemmas and paradoxes to shift the organisation through this horizon two to position it for the longer-term future. This horizon is a real point of disruption to be well-managed as you navigate from shifting resources from today’s core to that third horizon, the predicted future where ideas and proposals are still forming.

Horizon two actually ‘claims’ more time and attention than on the surface it deserves but this is the wrong mindset,  it simply needs too. This is not about supporting the ‘existing’, this is working actively on the ‘preferred’ as it is working to reduce current shortcomings, injecting new life and vigour into the present to offer a broader sustaining future.

Horizon two investments should be challenging ‘business as usual’ and should contain many of the catalysts for renewal, for the future growth. It is renewing the ‘fitness for purpose’ through innovation taking you along different pathways to the long-term successors of your business.

Horizon two can be a powerful catalyst.

 It can alter the way you are currently doing things, in new business models, in new systems, structures and delivery. It points you to a new, hopefully preferable future, worthwhile to pursue and attractive. It refreshes, it can invigorate and this horizon holds the keys and transition path to realizing that vision laid out in the ideas forming in horizon three.

To battle the increasing pace of obsolescence, we need to not just see and operate in today’s world; we must look towards the future. We must break out of incremental steps alone in our innovation activities, they just don’t simply ‘cut the mustard’ any-more, they are simply not good enough, in our rapidly changing world where increased competition is appearing from anywhere. We need to build out new capabilities, capacities through new innovation competencies.

We not only need to envision our future and the part we want to play within it but need a clear approach to working through the challenges and tensions to achieving a real balance in our innovation portfolio that work towards the same goal of being a material part of the business.

That is managing innovation not just in today’s horizon (h1) but in traversing into the future with more breakthroughs (h2) and transformational innovation (h3) that is organized around the three horizon methodology.  Making that essential traverse through horizon two is the toughest part. It needs carefully managing to have any really sustaining pathway to the emerging future.

The post Traversing different horizons for transformational innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

Let me outline the rationale for adopting this within your organization.

Clarifying our options requires multiple thinking horizons
For me, the three horizons have great value to map different thinking and possible innovation options over changing horizons.

You can frame innovation in alternative ways by using this approach. Innovation has multiple evolution points and working with this framework allows you to significantly improve innovations contribution.

It goes well beyond the present value of ‘just’ fitting your existing innovation portfolio and directional management into a one dimensional, viewed in the present, framework.

You can see opportunities completely differently beyond the existing mindset and activities, it takes innovation from tactical to strategic, to foresight in your evaluations.
Innovation is constantly facing disruption; it is constantly going through life cycles and new waves of different activities. We need a far more robust, well thought-through way to apply our innovation resources to meet and anticipate these changing events.

I’ve outlined the three horizon methodology I subscribe too, in a number of different blogs and these can be viewed here, here and some further thoughts here. They each contribute into your understanding of this emerging frame so I’d ask you to spend a few minutes viewing these if you feel this has real value to you and how you need to manage your innovation in better ways.

The innovation perspective for the use of the three horizons framework
We are all well aware that organizations struggle on innovation –  they seem to have real difficulties to climb out of the incremental traps. One of the primary reasons is that they fail to apply different mindsets to evolutionary thinking and stay locked in the ‘here and now’ and this is such a huge mistake.

I believe the three horizons can be specifically set up for a specific innovation engagement to allow you to have some far more stimulating and added value to your discussions around innovation, these can go from detailed to broad evolutionary explorations and so, radically alter many of your present constraints and debates.

We need to separate and structure different mindsets to develop innovation capabilities.

Structuring the approach, by looking across multiple horizons, allow you to evolve the entire innovation portfolio and begin to recognize the many gaps that exist within your thinking, within your capabilities and capacities to innovate.

By looking at this through separate lenses assists you in allocating the appropriate but usually different resources needed to be applied to each of the time horizons and challenges that lie within.

There is this prevailing or dominant system where many organizations stay firmly engaged, that needs radically challenging, as this is the famous incremental trap where growth performance stays restricted.

The three horizons ‘asks you’ to apply three totally different mindsets to see constraints, weaknesses and often very limited opportunities differently, it alters your thinking into a far more evolutionary approach.

The big idea of the three different horizons

The (big) idea is you go beyond the usual focus on fixing problems in the present and begin to plot and map some of the future disruptions that might occur as you move forward. You work and think through three different time and clarity lenses focusing on different horizons.

The three horizons also seek to capture the linkage on the transition points and possible disrupting junctions, as well as highlight those potential gaps are presently seen that needs clearly resolving.

It can provide the ‘distinction of choices’ as well as begins to highlight present organisational realities. The more you ‘see’ the more you can fill those gaps. The more you can foresee, the more you can become ready for managing the transformation that will be needed.

The three horizons will also help you with innovation differently than the S-Curve approach, as it is more evolutionary where you are work far more concurrently and building capacity and understanding progressively on the future “predictions” as they emerge and become clearer.

To approach the three horizons I see this going through different phases
a) Firstly clarify the burning needs relating to your present position and required future position by asking what improves existing activities, what extends the current competencies and takes you into new avenues to develop/ mature. Link it to your known strategy but keep questioning this to keep it fresh and relevant to ever-changing market conditions.

b) Then by deciding and weighting accordingly the winning needs you begin to articulate and frame these. These concept storyboards provide the necessary linkage; it captures emerging trends for constructing plausible and coherent innovation activities projected into the future.

These begin to shape the decisions on resources and to determine investment options. This offers a clear shaping of the search for emerging winners yet you are still able to constantly scan the horizons for changes.

c) By looking across the three horizons separately you allow H2 to have the discussions for the “space for transition” and resolve the constant dilemma of “protecting core or investing in new” debates.

d) The H3 starts exploring fundamental different premises for replacing “business as usual” with exploring nascent ideas, concepts that might replace what you presently have, it begins to shape your thinking and awareness of what is needed to build capabilities and capacities.

e) Often these H3, even some in H2 are weak signals today where many unknowns prevail but allow you to straddle between (h1) improve, (h2) extend and (h3) change.

Planning across these different horizons needs different tools

Planning in different horizons needs different tools and these are based on (h1) see and operate, (h2) adjust your thinking frame and solutions, (h3) more evolutionary. Each has different techniques to explore.

For me innovation portfolio allocations require the double axis of knowledge needed, over the axis of known knowledge, to manage the dimensions of innovation concern, to see and operate accordingly. This is something I’ll explore at another time.

Managing with different mindsets

Different mindsets and discussions are based on (h1) operational: the here and now, (h2) more entrepreneurial: attempting to detect shifts and adjusting in agile ways, (h3) more futuristic: based on values, visions and beliefs. Each needs separating.

There is a need to work through “typical” dangers – competing voices, mixed signals and all the uncertainly dimensions. What you must consciously stop doing is looking backwards (legacy) and keep the mind ‘free’ to project forward. There is a lot of work specifically on the mindset traps and how to avoid them, or to find the solutions, to surface them and address them.

The value of visualization to align dissenting as well as consenting opinions

Work through the visualisation and turning the “talking into planning” you can work through three options (h1) what’s now, (h2) what’s next and (h3) what’s the goal to drive towards in descriptors and actions (resource allocations and specialised need to develop for example). This helps further extend your horizon thinking and relate this into the actions you need to take.

The three horizons for innovation is very useful. In the words of Mahatma Gandhi ““First they ignore you, then they laugh at you, then they fight you, then you win”.

The three horizons does allow you to pick your fights and show others how and where you can possibly win in better ways than just in the ‘present’.

Can you see the three horizons value?

The value of the three horizon approach for innovation is where I partly wish to take my work beyond its present position through far more testing and exploring its application across different challenges and business segments.

I’m looking to engage with organizations on this – do you want to make a proposal? I’d welcome the opening conversations on this with you.

The post Mapping innovation across the three horizons first appeared on Building Your Innovation & Ecosystem Intelligence.

There is a continuing need is to build the management of innovation into a clear organizational capability, where innovation becomes a continuous effective innovation process.

To this end I have produced a conceptual model of what constitutes the ‘make up’ for providing an ongoing innovation performance engine- the innovation fitness landscape and the dynamics– that determine the appropriate capabilities and capacities available & required. I felt it needs a dedicated website to be the ‘go to’ source of reference. It is a work-in-progress so please recognize this when you visit it here: http://bit.ly/wX5q8R.

This is an evolving journey, any terrain that we travel over does offers very different challenges to build innovation capability into the very fabric of organizations, it needs building and structuring thoughtfully. You will see there are so far already thirteen categories making up this quest to map out and build out this innovation fitness. Each category is part of the total workout we need to go through. I’d suggest be selective in reading these, take your time and as you explore these progressively you will begin to see the overarching ‘fit’ these have with each other but each person, each organization will have different needs to get innovation fit. The more you explore, the more dynamic they become in possibility but it does takes time, for you and for me to build this fitness regime. We do always need a clear starting point and also a journey’s end in mind. See http://bit.ly/A0en7f for the ‘about’ story we all need to reflect upon.

The recognition that innovation for us all, to make it sustaining, does needs dedicated  investment in the understanding of the makeup of the capabilities to build a required ‘innovation performance engine.’ This is to provide more of the rich potential for wealth and value creation required in most organizations. It is an area of serious under-development at present, when you compare this with the focus on physical assets and general make up of offering support with limited direct knowledge application, within the majority of organizations.

The makeup of innovation

Innovation is made up of both tangible and intangible assets. It is the marriage of these two that makes innovation a unique capability to manage in well structured ways. It is the people engaged in innovation activity that make it work.  Everything else, the process, structures, technologies and management systems are just the contributing enablers.

The struggle to date is that innovation remains hard to manage well; we strive to systemize it and then attempt to replicate any success we achieve. Often this does not work as the variables that make up innovation can be different for each innovation event or activity.

The important point though is successful innovation contains core elements and processes regardless of industry, form, or type of innovation, we are pursuing.  Much of the difference though is in its varying degree’s based on these core elements. Our search was to find those core elements so as to leverage and strengthen them even further to strengthen an organizations capability to innovation continuously in a sustaining manner.

We as organizations strive to achieve distinct competitive advantage, and innovation is one of those real contribution points this can achieve this. The need is to make the innovation capabilities and capacities a distinctive, not easy to copy, unique set. These are shaped by the context and content of innovation, the organizations position and its choice of evolutionary paths it has decided to take or needs to take.

The emphasis points needed for 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 the absorptive capacity develop comes in. Innovation requires more of a higher-order integrated capability approach to constantly learn, develop, mould and manage multiple capabilities. This required 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 individual components on their own have limited effect, it is the combination 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.

Shifting away from the accepted norm

Innovation understanding and building strength in competencies and capabilities takes an organization beyond the accepted norm of managing efficiency, quality, being responsive and reacting with speed- all challenging within themselves. Innovation represents today’s competitive advantage statement that should be supported by these others. We must avoid dysfunctional consequences and why the existing systems and structures do have to ‘fold into’ new innovation based ones.

Organizations need to shift from the one often still found today, of a higher focus on stability, efficiency and effectiveness for profitability though that current preoccupation with performing routines and formalised structures. The challenge in today’s world is to be adaptable, agile, adjusting to offer consistent instability in the right ways to keep adjusting to the consistent market challenges. Innovation in itself is a force of instability. The shift needed to be made is to balance the dual ‘tensions of stability through efficiency, with change driven by innovation. It is the dynamic forces within the world we operate within that require us to respond and mirror, with equally the capacity for managing dynamic innovation capabilities.

Integrating back or making anew

The challenge is to integrate all of the organizations capabilities into the innovation process, not as many do today, try to integrate innovation into the existing structures- it does not work. The linkage and mechanisms need to be focused on creating new knowledge and competitive advantage, not searching to maintain obtained knowledge offering known results, today we are searching for resolving the unknowns, yet to be articulated needs to grow our markets in ways that customers strongly relate too and reward us for in multiple ways.

So the combination of efficiency of the existing structures needs folding into the more knowledge intensive ‘creative’ new one for achieving competitive advantage.

Innovation capability is defined as the ability to continuously transform incoming knowledge and news concepts and ideas into new products, services, processes, systems and new business models, for the benefit of the organization and the stakeholders. Innovation is about synthesising as well as operating in the two paradigms of efficiency of the existing and innovating new to the world.

The need is to recognize an organization-wide innovation capability that pervades all aspects of the organizations existence, forming the core value system to the measures and behaviours that are exhibited and on show on a daily basis for all to appreciate, assess and value.

Being nimble, flexible for managing across the different domains.

The need is to build a nimble, flexibly effective innovation performance engine that is quick to adapt to those constant changing market conditions. High performance deliberately and systematically enable and motivate the chaotic and complex domains (reference the Cynefin model on this) of novel and emergent practice that ‘present’ divergent behaviours and where the dynamics of innovation lie. Equally knowing the reinforcing practices and processes that make up of existing good and best practice are needed to make these more efficient and effective and reliable in their management.

Each part of the innovation fitness dynamics though is designed to reinforce and extract the innovation performance required of them. It is identifying the elements (both dynamic and more static repeating aspects) that make up the fitness landscape for managing innovation’s performance. I can only encourage you to begin to explore the categories that make up our terrain map to begin to consider your own innovation fitness journey of building capability and capacity that makes you a more dynamic organization to respond to different challenges in todays more fluid and adaptive world.

Ó      PAH 22.02.2012.W-I-P

Paul Hobcraft

Mail to : paul*AT*agilityinnovation.com

www.paul4innovating.com

www.agilityinnovation.com

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Understanding Absorptive Capacity and how it works

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

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

The Model of Absorptive Capacity explores potential and realized knowledge.

The need for a distributed organization innovation knowledge system

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

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

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

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

The ability to use external knowledge has three sequential processes.

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

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

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

The more open Absorptive Capacity Process leading to understanding and outcomes

The call for managing the effective use of knowledge

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

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

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

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Previously I had discussed the difficulty of setting rules for innovation. What is required is a looser approach to mutual adaption and mutual adjustment. This arises from working through the same rules and resources to access, integrate, expand and recombine knowledge as part of everyday daily jobs. The understanding of absorptive capacity helps

Possible a starting point is through three simple rules and resources I came across but can’t find the reference to at present, regretfully but these are powerful in their intent and engagement:

• Mapping organizational and project innovation processes in the context of a shared responsibility for innovation relies on the rule of taking full responsibility that allows all “to see” the space of innovation that exists.

• Generalizing organizational and project knowledge in the context where knowledge is a central task relies on the rule of supporting routines for getting to that space and for keeping it open for all to share and explore. a) This helps people be collectively consciousness of what they know and how they now, build up and having expertise in are all dynamic routine activities to become competent experts, and b) it also fosters respect for knowing and leaning what others know and contributes to skills more towards understanding higher-level conceptual frameworks.

• Spiraling across cycles of adaptation in a context of constantly looking for new opportunities relies on the rule for constantly searching for new opportunities that creates an organization in which people are used to innovation, so that it becomes a second nature– “the chaos is that we are constantly innovating”. Also the rule provides people with vital resource of having ways to deal with inevitable surprises of innovation.

Emerging space of innovation

These could be particular kinds of new knowledge to adapt in manufacturing, products, and service provisions. The Manager’s role here is to prompt knowledge clusters and learning exposure- the more the better. This valuing knowledge provides for a propensity for a common language (emerging) and methodology. The use of knowledge also provides for outcomes, not ongoing.  It brings common purpose and identity.

Emerging space could be to improve customer satisfaction by different delivery times for example and can also give a sense of possibilities by enacting and situating the knowledge appropriately top address this.

We need to find ways to combined general knowledge for wide awareness of available options, and specialized knowledge for assessing the systemic impact of specific options to move towards the development of “T-Shaped skills” being available constantly to apply to different problems. Choice can stay fluid and it gradually ‘firms up’ to allow greater exploration and evaluation as we ‘master’ knowledge and progressively experiment.

Lastly the ability to innovate is always with the people, it is not in a procedure , or through technology or the process. Innovation needs to be structured into everyday work to make it dynamic, not as it is found often today of being a static, boring environment. Building consciously in the capabilities to innovate with the intent for this to be more ‘as routine work’ then I do feel these three simple rules just seem to make such good sense. Managing innovation preciously is not possible. What do you think?

The post The Moving Space Required for Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

Firstly what we are trying to achieve so we get a rough idea of what we want to achieve, in strategic objective, in our innovation goals and in aligning them. Secondly we require knowledge, a clear working knowledge of how innovation can work for us.

We learn by exploring, the more peaks we cover we improve our knowledge and experience. We build our knowledge landscape. The more we understand each other, the more we can collectively climb and scale our innovation fitness. The more we learn and scale the more we can explore sub peaks on smaller, experimental levels, all contributing to our growing knowledge and fitness to innovate.

Exploring the rugged terrain early helps.

The terrain is identifying the opportunities or possibilities a ‘field’ holds for us. The more we can survey, the more we pick up patterns, insights and understanding. As we begin to map these out we begin to appreciate the height of the efforts (in this case our mountains) to clarify the intensity and ruggedness of the terrain we have to traverse and manage to get to that peak. The number of peaks we wish to scale or need to can tell us how diverse a challenge this might become. The more we can map these out, the more we can identify what we need in making this happen. Knowing the correct innovation type, the capabilities and capacities to build and deliver certainly helps makes us more effective, especially when resources are scarce.

The more we have insights for innovation the more we can build the right fitness models or regimes. Equally the more we survey, the more our competitors come into clearer focus, the better we can predict what they are doing themselves.

This adds up progressively to a fitness map to innovate

All of this adds up to identifying the fitness to innovate. The level of appropriate capabilities and capacities needed to support this venture. We help identify the correct type and number of activities that are appropriate through different protocols, workshops and techniques

Mapping out your innovation capabilities to the task at hand enables you to understand and relate to what is needed. Innovation Fitness Landscapes identify the opportunity spaces on where you need to focus your efforts- the appropriate resources to navigate the terrain. The greater the ‘fitness’ transforms your landscape potential into accelerating opportunities into tangible outcomes.

Higher value potential and rate of intensity determines need.

These critical factors give higher value potential or ‘peaks’ that are more valuable to your needs. The more ‘rugged’ the landscape can also determine the greater fitness for the rate of innovation. The height of the peaks in these landscapes illustrates how intense the innovation challenge is, and the number of critical peaks shows how diverse it potentially is.

The ability to identifying the emerging patterns provides the need to act and invest, making adaptive walks, so as to move you to the higher fitness points where innovation viability is enhanced and needed to be so as to resolve the challenges faced. Greater fitness equates to more value creation potential. The ability to inter-couple landscape entities and exploit individual interactions alters your dynamics to innovate and improve repeatable cycle times.

Fitness landscapes provide increased understanding of not just your existing position but ‘point’ to where to place your resource to improve your innovative capacity. Mapping these clearly and knowing the innovation rugged terrain you have to travel provides the appropriate focus and intensity you require closing the gap and achieving peak performance.

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Do we know what  the dependencies and complementaries for building and sustaining innovation success are? How do you sustain innovation, is it more through the structuring of everyday work, by creating a particular set of social rules and resources that foster specific routines? Really, that does seem to me as sounding a little too easy, or we all would have got to this point but we haven’t,when it comes to managing innovation. Innovation seems to conflict with everyday work.

The reality is we can’t ‘create’ rules or specific routines when it comes to our need to constantly innovate, there is a host of constantly changing variables, risks and conflicts that need constant adaptation to those specific circumstances, yet we can learn more on the underlying principles and approaches.  So how do we manage this in everyday work, inside organizations hell bent on managing efficiently. Certainly I buy the argument that Innovation should become part of everyone’s job on a daily basis so they have the space and potential to work on it constantly but what does this require? This is part of our journey within seeking innovation fitness through its dynamics.

Here we begin….

Is the debate then, “dynamic” or seeking “routine” for sustaining innovation success?

For me the argument points to the capacity to build “dynamic capabilities for innovation” around the critical situation we are all finding ourselves in, of rapid ongoing change. ‘Rapid change’ calls for constantly developing and leveraging dynamic capabilities and this need to be fully understood so the appropriate resource and commitment can be placed behind them. The world of innovation is based on consistent, never ending competition, a constant price/performance rivalry, increasing quest for improving returns and the ‘creative destruction’ of existing competencies all certainly contribute to rapid change without doubt.

What are the firm-specific capabilities that can be sources of real evolving but equally lasting advantage, and how can combinations of competences and resources be developed, deployed, nurtured and protected? These need to be difficult-to-imitate combinations and integrative enough to give new sources of competitive advantage to stimulate new growth and financial return.

Strategic innovation often changes the ‘game’; what it explores and exploits to stay dynamic.

What are dynamic capabilities?

Dynamic capabilities are those skills, process, routines, organizational structures and disciplines to build, employ and orchestrate intangible assets that are nor replicated easily by others and constantly change to meet customers’ needs.

Dynamic Innovation Capabilities need to advance knowledge creation and absorption, extend and integrate what is learnt into something more worthwhile, something new. These capabilities need to learn how to modify constantly the way we operate, reconfigure and redeploy. This involves the dynamic of sensing, seizing and transforming (Teece et.all) at the three interdependent levels of the individual, firm and network to coordinate/ integrate, learn and transform constantly and to reflect constant change that is taking place.

Two different academic views but does one lead to the other?

Dynamic Capabilities are defined by Teece, Pisano & Shuen in their different papers on the subject as “the firm’s ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments so as to achieve new and innovative forms of competitive advantage”.

Everyday Dynamics are where people know what is expected of them and what to expect from others and have a common ground for negotiating collective action in particular situations that create an ongoing social fabric, where innovation naturally flows. Zollo & Winter suggest a dynamic capability “is a learned and stable pattern of collective activity through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness”

Both definitions require learning and exploring

Both of these ‘dynamics’ arise from learning and constantly adapting within organizations and these aremore likely to come from systematic methods or they become to chaotic.  Innovation nearly always requires structure, process and being worked through in systematic ways unless you perhaps are a sole inventor/ innovator or responding to a real crisis that is novel. To work with others successfully you need a certain structure.

Capabilities for innovation are complex, they are structured and multi-dimensional and have a constant flow of energy. Often today organizations strive to keep these far too much in “equilibrium” (zero level) but the reality is that our markets being served are not in this ‘equilibrium’ and are constantly being disruptive, more ‘dynamic’ than ever.

We cannot keep a ‘business as usual’ mindset ,we need to recognize we are operating in potential set of constant unstable circumstances.  This is a  complex adaptive system and we need to treat innovation and building capabilities within this so they are both dynamic and everyday. We require adaptive organizations constantly modifying and remodelling their innovation capabilities to antiscipate and react to consistently changing market conditions.

We need to become far more aware of the dynamics that surround us that are needed for innovation to work constantly. We need our journey to evolve, we need to walk on.

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