I had been looking forward to a nice break up in the mountains of Switzerland, in a place near St.Moritz for five days of some walking, catching up with good friends over some great meals.

The evenings playing different card games or board games, as the temperatures dropped outside to minus six centigrade, the competitive nature raised the inside temperatures significantly. All good plans sometime get disrupted.

Regretfully a few days before, I ‘pulled’ some ligaments around the knee and this rendered the walking to some pretty tame stuff but the company, food and drink seemed to compensated a little I must admit, it eased the pain.

So I had some time on my hands so I decided to go back over the whole area of disruption to get a broader understanding and how this is driving so much within our innovation activity at present.

Disruption is all around us, coming at ever-faster speeds

Disruption has been going on around us over different generations. Something simply disrupts something else, such as the change from the horse and pony to the car, onto trains, then aircraft; or the telegraph replaced by the fixed telephone, then onto the mobile phone; or the mainframe computer to the personal computer onto today’s smartphone. Everything invented seems to have been disrupted or seems about too.

“A disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market leaders and alliances”             – (a wikepedia definition)

The term was defined and the phenomenon really came to a our more collective attention, through some pioneering work of Clayton M. Christensen that began back in 1995. This work highlighted today’s force of change as technology-led to bring out the changing conditions usually found in disruptive innovation occurring all around us today.

As we think ‘disruptive’ we also do need to recognize that no all innovations are disruptive, even if they are revolutionary. Equally Disruptive innovations tends to be produced or driven by outsiders as the incumbent’s fight to keep hold of their established position and regarding changing as simply as too hard with such a legacy of assets established.

It often seems the incumbent only let’s go, often in dramatic fashion, when a disruption has actually taken hold and suddenly takes off or seemingly from nowhere, catching those in established market by stripping away critical points of value within the existing market. They, the incumbent, then struggle to regain any form of leadership mostly, due to this poor recognition and preparation they should have been undertaking on an ongoing basis of exploring and experimenting.

Adopting new business practices is not so simple for the majority

Even though many of the existing incumbent firms of today have some pretty smart people they simply can’t get their heads around often their collective poor-decision making, cumbersome processes, often providing a calcifying culture and lack of bold leadership, that is opening the doors to the many inspiring disruptors.

The established firm have so tightly linked their processes, planning and planning cycles but not evolved increasingly around a higher level of fluidity, agility and extracting from a broader network. They stay resolutely internally focused with this often dominating vested interest in preserving the status-quo wherever they can.

There are so many ‘blind spots’ and lack of understanding about the power and force that technology is enabling. So many are being encouraged to actively work on new ways to enter the game and find a new model that simply disrupts and ‘slices off’ a nice part of the pie, or completely changes the way the equation of price, performance and value can be dramatically altered.

This change in the value proposition results in the consumers growing acceptance to change from the previous accepted and known. It simply shifts the market forces dramatically away and becomes unstoppable, utterly disrupting and altering perceptions and past positions. The application of technology is the catalyst that creates this disruptive process.     .

You feel the only blame is on the incumbent themselves, no wonder the talent entering the employment market are reluctant to join many large established organizations and would prefer to be part of the disruptors, in new ventures and defining and delivering new value propositions, building not defending positions, so as to deliver to customers wanting more ease, convenience and connected value than they are receiving today.

The digital technology led age, with the availability of venture money and extremely savvy techies, seeks to feed off the incumbent’s reluctance to cannibalize the present profitable revenue streams, render existing assets and investments as obsolete and see the fundamental assumptions about the business and the market as different to their own understandings.

The world of managing within a business has changed. This lack of seemingly rigorous internal constant challenging and exploiting alternative positions in real time, and exploring these through experimentation and discovery is rendering many firms unable to adapt and not be as agile and responsive as they could be. They stay often in this constant state of inertia, denial and myopia, even though they, within themselves still feel ‘dynamic and responsive’. A real dilemma that is extremely hard to get right. I feel “restless without consistent experimentation” needs to be embedded within the soul of many organizations.

They, the incumbents, see things in rational ways, based on past experience, whereas the usurper has no inhibitions and can only see inefficiencies, inept understanding of changing customer needs and fat, slow-moving incumbents. We must learn to walk in other peoples shoes to understand and ‘see’ differently.

The new cooking recipe for business disruption.

A light bulb went on for me as I sat there, near St. Moritz reviewing disruptive innovation. I remembered the terrific value we all seemed to have obtained from the pioneering work of Doblin and its ten types of innovation when it came out some years back. This allowed the collective ‘us’ to suddenly see innovations simply beyond products. We were able to combine them in new ways. The ten types of innovation framework took us beyond a stereo-type view of innovation, it opened up our thinking.

 A new framing of connecting disruptive innovation

I see the work currently being undertaken by Deloitte University Press as emerging as another important step, it allows us to frame and think disruption along recognized points of value, old and new. They have defined the nine patterns of disruption as shown in the graphic below. Incidentally the Doblin group is now part of Deliottes.

I think this has a great place to frame your disruptions, no different from the ten types of innovation.

The nine patterns of disruption (according to Deliotte)

Deliotte University Press has been exploring the disruptive forces at work in a “Patterns of Disruption” extended article and then providing a recent case series on these nine patterns of disruption shown above. I urge all worried or simply interested in understanding disruptive innovation to read these as an excellent point of reference. It can become a really powerful starting point to look, explore and determine ‘your’ possible points of disruption

Getting closer to understanding today’s business disruption phenomena

Here we see the basic ingredients for making change in these nine patterns and a new recipe for challenging and making change as ‘relevant markets’ can be redefined, providing a different source of value creation and recognizing that unmet need of the consumer. It might be something as powerful as the ten types of innovation in exploring the disruptive innovation points of value.

It is the new conditions of lower cost of entry and asset light, that technology is putting the potential into the hands of anyone to allow us to re imagine and recombine, to look to eliminate waste, improve choices, offer greater connected convenience, more personalization but on a different scale and scope. It is allowing us to challenge and exploit direct and indirect costs, to reduce lead times, focus upon new response times, to gain new identification and improved relationships, by connecting all the parts differently, that can create a change in finding new creation value points.

Exploring quickly, learning from these, developing the ability to pivot from this new set of insights, to firstly establish a new base line approach that taps into the right conditions and having the ability, resources and confidence to quickly scale this and mature it out into a broader offering of its interconnected parts that keep adding more value. Large established forms can achieve this, no differently than the small and nimble but in different ways, it lies in the art of orchestration, mobilization and clear, resolute commitment.

Becoming hyperaware, taking decisions and executing on these well is a great step forward for many.

We are certainly breaking faster with the past than ever. In the past we saw the future based often on the past, today we must see the future by exploring and experimenting constantly, based on our agility to recombine based on the technological potential we have increasingly available. Although all these have such a short history and are always changing we need to be more at the forefront of this exploring. It is our embracing all forms of this technology revolution that allows us to frame our thinking differently, it alters our thinking constantly and our organizations need to be set up to evolve in the same responsive ways.

We need to build a greater hyperawareness, the ability to detect and monitor changes and that is coming at increasing speed through more data flowing towards us. It is our ability to absorb this and translate its meaning in different, value-added ways to give it new value from a customer and market perspective. We also need to make better informed decision-making and acting upon these through faster execution and these ‘skills’ need to be far better put in place within most organizations. We need to cut through the existing ways of doing business as normal and challenge everything, everywhere, constantly.

We need to think of these ‘forces of disruption’ as the ‘era of displacement’ as we are all caught up in this technology revolution. The headlights are full on and blinding all of us, it is how we quickly respond will give us a better chance of emerging out of this period of (digital) technological revolution. Technology should not disable us, it should be enabling.

The post Caught in the Headlights of Disruptive Innovation. first appeared on Building Your Innovation & Ecosystem Intelligence.

One of my favorite books is “Dealing with Darwin– how great companies innovate at every phase of their evolution” written by Geoffrey Moore. It is well worth a read.

When you work through his other books and connect thinking of “Crossing the Chasm” and “Inside the Tornado” you really appreciate the learning stories coming out of Roger Moore’s studies of the Technology Adoption Life-Cycle.

We all need to rethink a lot as the new challenges come rushing towards us.

In his work, Geoffrey Moore talks about ‘traction’ and I think this is a great word for thinking about how to gain diffusion and adoption in product, service or business models, to gain market and customer acceptance.
Over three posts I am looking at different aspects of “diffusion and adoption”

The first post outlined the different theories and establish their value in our thinking.

The second post relates these theories into their to achieve success in penetrations of our target markets and increasing sales through growing adoption.

This is the third and final post in this series, it looks at how Rogers’ theories relate to us in today’s connected world, and in particular with reference to Apple and finally offers up some of the reasons why diffusion can fail to occur.

Seeking even more than ever, the One-2-One (1to1) of many
Marketing departments talk penetration, “message penetration, market penetration” and so often ‘force’ customers to become aware and then buy. Does this really work today? I doubt it.

Also many organizations hang on to old media ways to get their message across when the use of technology, the internet and social engagement may seem harder but I believe is far more rewarding to engage with the customer on a more personalized basis. I regard this as 1 to 1 of many.

Today we are in an ever-faster world

Connectivity is driving the diffusion rates of nearly everything. Just take a look at the following table:

Even this table is already out of date on the speed to reach critical mass. Companies are not just setting hurdle rates on launch dates but demanding innovations that have critical mass in revenue and when they achieve critical mass.

It is not unusual to set 18 months to achieve critical mass from the inception to settling on the critical factors that make a value proposition to drive penetration. This can only come through engagement and that comes through technology making the connection to the user.

Just study how Apple manages its diffusion and adoption cycle

There are lessons for us all to learn here. Apple has not been the first in markets, they are a classic fast learner and follower.

Yet they master the convergence of ‘breaking’ technology, design, user experience, pushing materials used and providing ease of use within the make-up of the product, and deliver this ‘bundle’ through the sheer generation of excitement and buzz.

The huge difference is their deep understanding of what can be put together that achieves this diffusion and adoption. What can others learn from this integrated approach to product and people?

Take the iPod for example

The first digital music player entered the US market in 1998 and it was not until 2001 Apple released the iPod.

The market had already shown signs of plateauing at the time of Apple’s launch, which must have been worrying.

Yet it was the unique factors of Steve Job’s clear vision of what a musical experience should have, Apple’s superb understanding of design and usage of materials, and its building upon the growing brand recognition and reputation as front edge.

Yet Apple also benefited from previous product releases because the behaviours and expectancies were being understood and were able to be articulated far more to validate and confirm Steve Jobs emerging view on what customers actually wanted- their own unique choice of music in the palm of their hand.

Steve Job’s innate sense of driving a solution to a winning value proposition by demanding all the parts to be incorporated, often taking uncompromising positions, was the additional factor. For example, being determined to offer a progressively growing store of downloadable music provided that incredible ‘complete’ usage experience. It met an un-articulated need but saw the different signals in its convergence of a total package.

Apple gave everyone in the adoption curve something that set their imagination alight.

Recommendations compounded so even late majorities and laggards felt compelled to buy, and the sales simply exploded.
The basic criteria with the theories of Roger’s Diffusion and Adoption were met.

Then look at the Apple iMac

For the consumer, Apple took away complexity. The learning gap became dramatically reduced.

It was quickly understood you took your computer out of the box and plugged it in.

The complexity of most of our past experiences in complicated set ups, the need to download and fiddle with conflicting software, had been taken away.

Apple set about integrating the system and providing a better user experience. It did away with proprietary connections, set USB and CD-Rom drives as their standard, dragging along most in the industry. It again focused on pushing to the maximum from Rogers characteristics of innovation.

The iMac proved to be phenomenally successful, with 800,000 units sold in 139 days. It’s translucent plastic case, originally Bondi blue and later various additional colors, is considered an industrial design landmark of the late 1990s.

Again design, attention to details, focusing on user needs to reduce complexity, offer relative advantage, make the way forward as compatible and integrated, allowing a fast set up to gain immediate experience and a great design or observability ticked all the boxes of Rogers Five Factors.

Then we get to the iPad

Where do you start? The iPad had built-in Wi-Fi and, on some models, cellular connectivity.

An iPad can shoot video, take photos, play music, and perform Internet functions such as web-browsing and emailing.

Other functions—games, reference, GPS navigation, social networking, etc.—can be enabled by downloading and installing apps. As of October 2013, the App Store has more than 475,000 native apps by Apple and third parties.

There have been five versions of the iPad. The first generation established design precedents, such as the 9.7-inch screen size and button placement, that have persisted through all models.

The iPad second generation  added a dual core Apple A5 processor and VGA front-facing and 720p rear-facing cameras designed for FaceTime video calling.

The third generation added a Retina Display, the new Apple A5X processor with a quad-coregraphics processor, a 5-megapixel camera, HD 1080p video recording, voice dictation, and 4G (LTE).

The fourth generation added the Apple A6X processor and replaces the 30-pin connector with an all-digital Lightning connector.

The iPad Air added the Apple A7 processor, the Apple M7 motion coprocessor and reduced the form factor for the first time since the iPad 2. iOS 5.1 added Siri to the third and fourth generations and the iPad Mini.

There have been two versions of the iPad Mini.

Apple were delivering wave upon wave of new technology in a rapidly accepted format.

A story of design, combining technology, understanding the unmet needs of the market, combining revolutionary materials. It filled a need, and it ticked all the boxes again of Rogers Five Factors of Product.

Yet we had by this time the real effect of the People Difference.
Apple have such a powerful body of innovators and early adopters creating such a pre-launch noise, it draws in early and late majorities.

Apple has been a fashion ‘must have’ statement.

Demonstration of products in Apple stores are ready to be put to any user test, the staff are providing you a ‘user experience’ and support structure that understands our needs and provide all your personal reasons to adopt.

The advocates of Apple products are phenomenal. They are nurtured, engaged with and pampered, as they generate such chatter and noise it can’t be ignored. It delivers the powerful messages Apple want to get out there for accelerating sales at mind-boggling speed.

Apple has institutionalized its product and people diffusion, and adoption process – can you?

We can all take away some powerful learning from this by aligning the theories of Rogers, articulated originally in 1962 and see how they seem highly relevant to Apple’s approach to its thinking.

They have added triggering (conversations, user experiences) with contagion and have been working the different tipping points to gain market traction, penetration and constant appeal to stay up to date and in tune with the latest and greatest.

Lastly let’s remind ourselves why diffusion often fails to occur

1. Getting the price wrong and staying stubbornly rigid with it
2. The wrong identification of the target markets
3. The poor selection of channels often because they are known, and they’re the sales forces’ most comfortable point of contact
4. A really poor communication of the product or service benefits
5. The unique attributes are over-hyped and quickly not seen
6. The new product really does not give many benefits over existing products
7. It simply has no innovative advantage, it was more of a cost-reduction exercise
8. The ease of access to the relevant information about the product is complex, difficult, time-consuming and unclear. It becomes complex
9. The real needs and expectations of the consumer were actually ignored, never discovered or just not met
10. The product or service offers no really clear value proposition to switch and buy.
I’m sure you could add a few more but I leave those to you.

The principles of diffusion and adoption I believe are both important in innovation.

Working the diffusion and adoption theories and putting these into your practice is something that needs an integrated approach, it might develop over time, perhaps through serendipity but knowing its principles helps you begin to map out the pathway.

This is the third and final post within the discussion on exploring diffusion and adoption for innovation.

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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. 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 Exploring Diffusion and Adoption for Innovation – Part 3 first appeared on Building Your Innovation & Ecosystem Intelligence.

The future within our engagements will determine diffusion and adoption

It is all about letting go but also grabbing more at the same time, and then finding ‘it’.

Technology has opened up the door to both scale and fragmentation and social business is the one pushing through this open door.

We are increasingly facing the Collaborative Economy everywhere we turn. Social business is becoming the denominator of success or failure.

We are needing to confront the new questions that are emerging
New rules are emerging – you could say new theories – and where are these fitting within the corporate mindset?
The shift of what our customer means to us, are we still competing with them, pushing them to accept a value proposition that forces them to begin to look elsewhere?

Are we still determined to hang onto control, in the (mistaken) belief we know what is best for our customers?

Are we really bothering to learn the power of networks, cultivating communities, fostering co-creation and optimizing shared value, instead of just creating and selling things?

Are our structures and processes still stuck in the past or are you transitioning to managing a more social business that operates in more dynamic ways?

There are a huge number of new rules and ways to manage. It is the ones that master these that will succeed in diffusion and adoption at very different speeds than we can imagine today.

In three posts I am discussing different aspects and challenges within diffusion and adoption for innovation

The first post outlines the different theories and establish their value in our thinking.

The second post, this one, relates these theories into their to achieve success in penetrations of our target markets and increase sales through growing adoption.

The third and final post in this series looks at how Rogers’ theories relate to us in today’s connected world, and in particular with reference to Apple and finally offers up some of the reasons why diffusion can fail to occur.
Back to this blog……..

We are all in need of answering numerous questions and finding our way.

Social media is for many business organizations, the new kid on the block

It is relentlessly chipping away at the fabric of how organizations have been organized. In less than half a decade societal and cultural shifts through technology, the transfer to global open digital networks have taken us way beyond “just the internet” for connecting.

We are in need to engage in totally different ways. It is really not good enough to sell just products and services anymore. These are basic value propositions. Customers are looking on how these are connected into different “bigger pictures”. 

The questions of your sustainability approaches, environmentalism, corporate social good and responsibility and a growing interest in governance are shifting their thinking.

Your customers are wanting to connect and establish a different level of trust than simply those invested in a brand name, that is becoming table stakes or even irrelevant.

We are moving into a very different territory. Grasping the changes to your business are highly challenging.

Large organizations are being challenged by the sudden rise of self-organizing communities where people come together online and create shared value that often forms an immediate organization to challenge the existing. Traditional business models need to learn to adopt in different ways themselves.

In an era of high-velocity online start-ups, where the next generation of digital businesses are taking up the space as they focus increasingly on the dynamics of social business where does this leave our existing organizations?

Everything has sped up, we diffuse and adapt in seconds

There is an urgent need to “letting go and grabbing more”. Traditionally “we” provide products and services and many of our existing organizations are slowly coming to grips with providing on-line services.

The belief is this is enough to satisfy customers, keep them buying and using the product or service. Is it?

The social connected economy has reversed the relationship. Consumers just want to use and have provided product and services on ‘their’ demand and seek increasingly the platforms where they can easily go to find out and then use the required products and services. Often they don’t want to buy these, they just want to rent them to do the appropriate job.

The whole movement of jobs-to-be-done, identifying customer needs is yet again a place of increased focus. The larger organization still struggles with this as it wants to fit this ‘seen’ need into their structure and system.

They are spending growing time adapting while others are pivoting quickly to capture this fluidness in need.

In many ways diffusion and adoption lies more in the organizations inabilities than the customers. Perhaps the theories of Rogers have reversed.

It is the power of people and how organizations react and determine differences that will determine diffusion and adoption, as explained by Everett Rogers. Dion Hinchcliffe, an expert on next-generation enterprises suggests an Engagement Fabric.

Are we in a reverse situation for diffusion and adoption?

Consumers race to diffuse and adopt, it seems our larger business organizations struggle. The organizations are the ‘laggards’.

We need to think about the organizations ability to engage at scale. Perhaps we need a further theory to add to Rogers ones. The interpretation of the Engagement Fabric goes like this for aiding diffusion and adoption:

The organization as one does need to engage to any, not many. It is the ability to allow information to flow; we learn to aggregate stories or decipher trends to engage back to new groups of audiences that see your diffusion as valuable to their adoption.

The organization continues to throw open its store. The ability to engage and promote self-organizing communities to exchange and extend around our product and services and keep them as engaged stakeholders who you work to keep involved in the evolution that triggers better innovations.

Simultaneous engagement that is constantly synchronized with the evolving story, built more on business and social value, less on your product or service. Constant insights and thinking get captured for its ongoing community value and ability to keep improving on the product or service offered.

Making the space highly visible and user-friendly. By ensuring ‘ease of access to knowledge you are allowing conversations to build and become increasingly valuable to all involved in the community.

The ability to analyse, interpret and filter. Offer the place that captures the many good insights so as to set about the continued building of value into your products and services.

So we need to transform our own internal design to better diffuse and gain increasing adoption

To quote from Dion Hinchcliffe whose future thinking I have drawn heavily upon for this post makes this comment:

We need to rapidly move to an engagement platform

Diffusion and Adoption are even more of a business organization’s challenge to adapt to the most significant set of changes since the internet.

It is the power of all the disruptive technologies, the power of social business and the incredible impact of all the connected networks are accelerating acceptance or rejection.

Diffusion and Adoption is so far more complex but the principles of Rogers theories, offered nearly fifty years ago, can help to understand a single innovation perhaps.

It is today the way you build your platform for engagement which will determine where you stand in any adoption race for the health of your business and its model in the future.
It is the business organization that is in its race for adoption.

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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. 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 Exploring Diffusion and Adoption of Innovation – Part 2 first appeared on Building Your Innovation & Ecosystem Intelligence.

According to Professor Clayton Christensen and drawn from his book “Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change”, by Clayton M. Christensen, Scott D. Anthony, and Erik A. Roth published by Harvard Business School Press, the only way to look into the future is to use theories.

“The best way to make accurate sense of the present, and the best way to look into the future, is through the lens of theory.” The theory of innovation helps to understand the forces that shape the context and influence natural decisions.

This might not be fashionable for many because as soon as you introduce “theory” into the discussion for many of my practical colleagues they want to dismiss it.

Going back to Christensen “good theory provides a robust way to understand important developments, even when the data is limited. “Theory helps to block out the noise and to amplify the signal”.

Diffusion of Innovation Theory is important for our innovation understanding
One set of theories I believe we simply cannot ignore even more today lies around the work of Everett. M. Rogers where he outlined his thinking in his book Diffusion of Innovations the first edition was published in 1962.

The fifth edition (2003, with Nancy Singer Olaguera) addresses the spread of the Internet, and how it has transformed the way human beings communicate and adopt new ideas.

Over three posts I will look at different aspects of “diffusion and adoption”

The first post, this one, outlined the different theories and establish their value in our thinking.

The second post, relates these theories into their to achieve success in penetrations of our target markets and increase sales through growing adoption.

The third and final post in this series looks at how Rogers’ theories relate to us in today’s connected world, and in particular with reference to Apple and finally offers up some of the reasons why diffusion can fail to occur.

First we need to have a clear grounding or reminder within the theories
By developing our understanding of why some products seem easier to diffuse while others can take longer or often fail, innovators can improve their likelihood of understanding the differences through exploring these different diffusion and adoption theories.

Besides the classic “S-shaped curve” associated with diffusion, it is useful to also reflect on this tougher curve to manage from its development costs into profit requires a greater focus on the commercialization stages.

Product and People determine diffusion and adoption
According to Rogers, the rate of diffusion can be attributed to a combination of “product differences” and “people differences”

Product differences
Research suggests that up to 87 per cent of the variance in an innovation rate of diffusion can be attributed to the following five product characteristics. These are known as Rogers’s Five –characteristics of Innovation.

Relative advantage refers to the degree perceived to be better than the product (or service) it replaces.

Compatibility is the extent to which an innovation is perceived as being consistent with the values, past experiences and needs of potential adopters.

Complexity is the degree to which the new innovation is perceived as being difficult to understand or use.

Trialability is the degree to which the new innovation can be experimented with, piloted and used on a limited basis.

Observability is the degree to which the results of an innovation are visible, observed and communicated to others and where the rate of adoption can often be determined.

People differences
Once the product’s position in relation to the Rogers Five Factors is known, the diffusion process is best managed by focusing on the people’s difference.

The classic bell curve is broken down in the five categories of adopters. 

It is from this initial work of Rogers we then got Geoffrey Moore’s classic on “Crossing the Chasm” which recently has been significantly updated in a recently released book around the Technology Adoption Lifecycle.

The chasm can happen throughout the early adopter’s phase, you have to be alert and responsive enough to find solutions quickly enough to bridge this and ‘cross that chasm.’ Pivoting on the parts that are good, exploring the parts that are needed.

The five adopter categories are:

Innovators– venturesome, risk-taking, information seeking, early seeking status and very experimental, enjoy the degree of early challenge or even uncertainty involved.

Early adopters– Often respected opinion leaders within their social groups, seen often as role models for others.

Early majority – more deliberate before adopting new ideas; interact frequently with peers and trendsetters. They like to merely stay ahead within the curve from that more informed decision-making.

Late majority – Tend to be sceptical, cautious to adopt but ‘feel’ pressure of peers to adopt, tend to need intervention strategies to overcome barriers and see their ‘needs’ resolved by the innovation

Laggards – Traditional , last in the social system, often they pay little attention to opinions of others, they have more a clear point of reference in the past to overcome, are often suspicious of new innovations and their decision process is often lengthy.

Then we have the decision process or stages of adoption:

Awareness and Knowledge – refers to a customer’s acknowledgement of the presence or existence of the new innovation and where they form a general perception of what it might entail and is often driven by the intersection of need recognition through marketing communications. This is the point of being inspired to find out more.

Persuasion and Interest – this occurs when a consumer processes the available information associated with the innovation and considers the product or service’s appeal on this. This positive or negative attitude tends to be based on the five characteristics mentioned above. Here the consumer actively seeks out information and details.

Decision and Assessment – Having considered the persuasion factors the consumer will come to a decision about whether to adopt or reject the innovation. Their activity in seeking out advice, data gathering, comparing or making different assessments happen clearly here. They consider the switching costs and weigh the advantages up. This is the hardest stage to understand.

Implementation and Exploration – These are the series of activities to put the innovation to use. The consumer employs the innovation to a varying learning degree. The usefulness is determined and they may search for further information about it.

Confirmation and Adoption– is mostly concerned with post-adoption behaviour exhibited by the adopter, reinforced by the innovation’s actual delivery against the relative advantage ‘claims,’ its complexity and compatibility on their understandings. The individual finalizes their decision to continue using it or searches for extending its use to its full potential.

So in summary for this opening post:
Diffusion is the manner in which innovation spreads. It is the degree how we facilitate, accelerate, and sustain it.

There are constant difficulties in exploiting these different theories within organizations, the questions are where to place the emphasis and the means of communicating these. The process is contingent upon the structural, cultural and size and scope considerations.

You have to watch for that constantly changing the implementation requirements and lack of sufficient resources or application, as they considerable constrain the innovation outcomes and often you don’t spot these until it is too late

The execution or commercialization stage of any new innovation often fails to address the theories offered by Rogers adequately enough, then organizations often suffer poor diffusion and adoption rates, unaware of the considerable efforts this stage of understanding diffusion and adoption needs to address.

The second part of this post will deal with….

My second post in this diffusion and adoption discussion will deal with managing within a far more fluid set of conditions than we have seen to be facing previously.

The combination of technology, social media and the internet gained a ‘closer’ relationship with final consumers encouraging engagement and feedback has introduced a far more dynamic environment.

Innovation adoption or rejection is getting riskier, and far more complex and we need to bridge the learning gaps far better and smarter. Are Roger’s theories still relevant or even more so today and in the future?

Then the third post provides different examples of diffusion and adoption and offers a starters list of why diffusion can often fail to occur.

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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. 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, it’s well worth the visit.

The post Exploring Diffusion and Adoption for Innovation – Part 1 first appeared on Building Your Innovation & Ecosystem Intelligence.

I wrote about “The present jobless innovation era we face” raising up the theory that Professor Christensen points towards, that we are working on the wrong types of innovation to create jobs.

We are measuring our businesses in financial metrics that were more designed for periods of scarce money supply and not what most of our companies have today, cash in abundance, sitting on their books and a world ‘awash’ of cheap money. Professor Christensen calls this theory of his “the Capitalists Dilemma.”

Risk-aversion is dominating our Western thinking
The present situation is that we are in a period of risk-aversion where the innovation ‘bets’ are more incremental, more short-term pushing for greater utilization of existing assets that are designated by Professor Christensen as “sustaining or efficiency” innovations. He believes we need more “empowering innovation” – those that create jobs and invest capital across longer-term horizons than today.
In Professor Christensen’s original article he had published in the New York Times in November 2012 he believe the solutions are complicated and he has looked to “seed the discussion”.

Firstly he rightly points out that the “challenge is not framed properly” as he suggests “even if there is robust growth there won’t be (necessary) job creation”.

He argues Governments can’t dictate. I believe there is continued risk of even more exit of the migratory capital to lower cost countries and projects where the conditions seem more attractive unless the ‘dynamics’ surrounding the need for innovation plus jobs can change significantly.

We certainly need “innovation + jobs” and not exported!

In my view and to a large view until we focus on all the factors that need to promote innovation plus jobs, our economies in the West will never recover that sustaining ability.

A place where capital is deeply invested again, so  it provides growth ‘within our borders’  that can, over time, allow us to return to prosperity.

We need these “sustaining and efficiency innovations” as they liberate capital but it is in providing the right conditions for this capital,plus all the idle cash today that is simply sitting on businesses’ books, to be moved towards this “empowering innovation” we need for job creation.

Professor Christensen ‘floats’ three places to start in making changes within our economic  systems to allow innovation activity to break free and become job creators.

Firstly, To change the types of metrics we use, to move these into more people orientated ones.

Secondly, to change the capital regimes that shift the thinking on investment incentives, where longer term productive investments held can make that horizon shift due to these tax incentives put into place for investing in longer term, bigger budget innovation.

Thirdly is changing the politics where consumption has dominated into different “empowering” decisions. I’ll come back to this another time. My feeling is, as these stand they are little too “apple pie” for me – sweet, initially satisfying but not enough.

Getting your jacket off

Let’s firstly go where the jackets have already come off with a far more substantial set of proposals to “win” this innovation race. Rob Atkinson of the Information Technology and Innovation Foundation (ITIF), a Washington DC-based technology policy think tank along with Stephen Ezell have explored this innovation dilemma in their book “Innovation Economics- the race for global advantage” (released in September 2012) and offer a web site on this whole area www.globalinnovationrace.com

Within the book, the web site and ITIF they outline the arguments for significant innovation change and provide many sensible solutions to win the innovation race.

They have put these under the eight “Is” needed and cover each one in a chapter. These are under the following (organizing) headings:

1. Inspiration. Setting Ambitious Goals
2. Intention: Make innovation-based competitiveness a National Priority
3. Insight: Improving understanding of innovation performance
4. Incentives: Encouraging innovation, production and jobs IN the United States
5. Investment: More public funding for Innovation and Productivity
6. Institutional Innovation: Doing new things in new ways
7. Information Technology Transformation: broaden the IT transformation base
8. International Framework for Innovation: Everyone plays by the same rules.

Key digital platform technologies are places for real job creation also

They (ITIF) also suggest there are at least six key digital platform technologies today that need significant longer-term capital investment.

These are broadband- the critical enabler, next-generation wireless communications that speeds it all up, health IT for easier access to a comprehensive view of patients, intelligent transportation systems for real-time intelligence, a smart electric grid to ‘sense’ location of power, contactless mobile payments to use their cell (or mobile) to pay across society.

They quite rightly suggest without Government help to catalyse the deployment of these platforms progress will be slow.

Then we have “Innovation Economics” as a growing doctrine
The book and Wikipedia I would think have the same source but the Wikipedia source does provide a terrific outline of this growing doctrine that is suggested should reformulate conventional economics theory so that knowledge, technology, entrepreneurship and innovation become positioned at the centre of a model, and not independent forces trying to influence it.

This Wikipedia source goes through historical origins, offers the innovation doctrine as a more advanced theory, provides evidence and the geography associated with many successful innovation efforts, that are deliberate concerted efforts by combining markets, institution and policy-makers and use the geographical space. This then finishes up with worldwide examples and countless references.

Competitiveness and Innovative Capacity

In January 2012 a report came out from the U.S Department of Commerce in association with the National Economic Council entitled “U.S. Competitiveness and Innovative Capacity. This report may be a long read of 160 pages but lays out many ways of “Moving Forward” across a well laid out set of the parts that make up the innovation context

These steps suggested include 1) rising to the challenge, 2) the keys to innovation, competitiveness and jobs, 3) Federal support for research and development, 4)Educating our work force, 5) Infrastructure for the 21^st Century, 6) Revitalizing Manufacturing, 7) The Private Sector as the Engine of Innovation to offer a fairy comprehensive evaluation of the issues, challenges and investment opportunities to bring about a more “empowering innovation”.

Again within this report in their “Moving Forward” suggestion lies ten recommendations or factors that are suggested as ways for the United States (or even Europe) to regain a pre-eminent capacity within innovation.

It is a race each country engaged in innovation activity will want to win as this building of innovation capacity is the bedrock of economic growth and future prosperity. Otherwise, if we fail to grab this fully, we will face continued decline, short-term disruption and long-term stagnation.

Jobs can be created; our skills need adapting and refining

Of course everyone will continue to need a basic education or knowledge but they will need sharpening the skills and their motivation more. When we lack motivation, we lack that curiosity that becomes so important to innovation. The intrinsic parts of being curious, persistent and willing to take risks needs to be instilled far more into our education and thinking.

The call for education reform is gathering but we need to be careful in the rush to ‘reform’ we don’t “throw the baby out with the bath water” in our haste.

I was reading and storing away for future reference an article “What 100 experts think about the future of learning” that again places learning into its multiple parts: of using technology, sharing education openly and differently, where creativity and innovation fit to foster a new spirit, the internet and new media and its potential impact on teaching and learning, leadership, educational technology , the brain and psychology, technology education, different teaching methods and our institutions.

The list does provide a fairly comprehensive view for the impact of learning in the new ways we need to move towards.

Need a job? Invent It.

Thomas L Friedman offered a view in a New York article piece “Need a job? Invent it” suggesting these are dangerous times where high-wage, middle-skilled jobs – those sustaining our past economies – are in the past. These have become only high-wage, high-skilled to recalibrate this middle-class and their dependency.

The article further explores the view of Tony Wagner, a Harvard education specialist, that we need to send out every child as “innovation ready”, ready to add value to whatever they do. Wagner argues “the capacity to innovate – the ability to solve problems creatively, or bring new possibilities to life – needs these skills of critical thinking, communication and collaboration and are far more important to meet today’s challenges than academic knowledge”.

So who is doing this right out there in the world? “Finland is one of the most innovative economies in the world,” Wagner said, “and it is the only country where students leave high school ‘innovation-ready.’  They learn concepts and creativity more than facts, and have a choice of many electives.

Who is putting in place those stronger foundations within this innovation race?

I finish here on the competition and it is everywhere. Not just in a region of one country, or on one continent but across the world. The race is truly on, on who organises the relevant conditions to allow innovation to thrive, to offer the place where “empowering innovation” and where jobs are part of the equation.

There are examples in Europe- not just in Finland, Norway, Sweden but in Switzerland, parts of Germany, regions of Italy, Spain, France, Ireland and the UK. They benefit but equally suffer from centrally driven policies ‘handed down from Brussels at the EU level or constrained in “restrictive” thinking at National level.

Many of these “selected” places are simply “pockets of innovation” and lack this cohesiveness and coordination to really accelerate innovation into far more “empowering”to benefit society as a whole.

The BRICS of Brazil, Russia, India, China and South Africa are the emerging group are all developing or newly industrialised countries, distinguished by their large, fast-growing economies. These are the emerging new superpowers where they are experimenting but laying in the necessary building blocks to support and accelerate innovation.

They are sucking in the capital and provide the horsepower in people, both those that have gained from a focus in high skilled areas and those with basic education.

These combine in that drive to move up the social scale. Ambition is a highly motivating force and those within the BRICS have it. They are searching for advancing their global innovation advantage and know what it means to them personally and collectively.

Coming back to Professor Christensen he suggests the Chinese and Taiwanese in one interview. “Because they measured return on invested capital, every semiconductor company in the U.S. except Intel decided to outsource their microchip production.

All that production went to Taiwan. Morris Chang [who pioneered the $28 billion semiconductor foundry industry] now owns half the chip production in the world”. When Professor Christensen asked him why he wanted chips on his balance sheet, he said, “Because I measure profitability in cash, not ratios.” I don’t see why American companies can’t think that way.”

Technology Convergence – What’s your plan?

Lastly in our lightening round-up of emerging innovation power spots, one that we all really need to take seriously, South Korea. This came from Rohit Talwar, CEO of Fast Future under Technology Convergence – What’s your Plan?

I leave it in its entirety, as it states so clearly the organizing power of a country that is determined to win a larger part of the innovation race and is intent to achieve it:

“I have just returned from South Korea where I was delivering a keynote speech to a cross-industry forum on how to prepare for and benefit from the opportunities arising from industry convergence.

South Korea has made a major strategic commitment starting with government and running through the economy to be a leader in exploiting the potential opportunities arising from the convergence of industries made possible by advances in a range of disciplines.

These include information and communications technology, biological and genetic sciences, energy and environmental sciences, cognitive science, materials science and nanotechnology.  From environmental monitoring, smart cars, and intelligent grids through to adaptive bio-engineered materials and clothing-embedded wearable sensor device that monitor our health on a continuous basis – the potential is vast.

What struck me about the situation in Korea was how the opportunity is being viewed as a central component of the long-term future of Korea’s economy and how this is manifested in practice.

Alongside a national plan, a government sponsored association has been established to drive and facilitate cross-industry collaboration to achieve convergence. In addition to various government-led support initiatives, a range of conferences are being created to help every major sector of the economy understand, explore, act on and realise the potential arising out of convergence.

I am fortunate to have had the opportunity to visit 20-25 countries a year across all six continents and get to study and see a lot of what is happening to create tomorrow’s economy. Whilst my perspective is by no means complete, I am not aware of any country where such a systematic and rigorous approach is being taken to driving industry convergence.

Those who study Korea know that this approach is nothing new for them – long term research and strategic planning are acknowledged to have played a major role in the evolution of its knowledge economy and rise of Korea and its technology brands on the global stage. Coming from the UK, where it seems that long-term thinking and national policy are now long-lost relatives, I wonder why it is that so few countries are willing to consider – or capable of taking – such a strategic approach.”

To sum up our need for Innovation Job Chasing

Until we see a change that indicate a longer-term view of profitability and start measuring innovation differently we are stuck far more in the present jobless innovation era I outlined in my last article

Yes, we do have a “Capitalist Dilemma” but it runs deep in its fault lines and its many weaknesses nicely highlighted by Professor Christensen but for me, any current dilemma needs deeper evaluation today, not in 12 or 18 months’ time.  We need to look far more boldly at the Innovation Solutions and the economics and knowledge creation within this.

In all real honesty, it  is urgent and vital for each countries race for global advantage and future prosperity we become organized and see that “empowering innovation” and job-creation become more central in our thoughts and future decisions.

Can we really overcome the barriers to innovation we have, as each of our developed countries are so mired in old-style legacies? We need ones that can still take making profit into the equation but in different ways to ‘release’ capital funding that does bring jobs fair and square back into the innovation solution we actually need, to solve growing societal challenges? Ones that seek collaboration across all sectors of society, who recognize much needs real change.

These need long-term investments and all  the relevant parties working on solutions. At present far too many are playing the waiting game and that has to change.

It does seem many are also simply “re-arranging the deck chairs on the Titanic” who will be overtaken by events and not providing real solutions of a current problem.

The post Innovation Job Chasing – A Race Needed To Win first appeared on Building Your Innovation & Ecosystem Intelligence.

This idea ‘hit the world’ when he wrote a piece in the New York Times last November, 2012. I gather this has been one of his best, if not his best read article ever.

As I’m sure you are aware Professor Christensen must be regarded as if not the top, then one of the top experts, on innovation. For me he sits at the top, so when he explores a theory, you stop to think about what he is trying to explain. It takes some of us mere mortal awhile to grasp and relate to these ideas and theories.

Theories into solutions sometimes is a long wait for wrong reasons

Firstly an aside, I need to get this off my chest. Although I suspect a book will eventually emerge, perhaps only next year 2014, far too often this is a little later than preferred or when really needed. The ‘currency’ or present day relevance often suffers from this parallel world of academics, moving on a much slower level.

They are still working within the publishing strictures and structures where a book has to be firstly written, reworked, proofed by editors, printed, bounded and distributed.

As you might guess here, I just wish some of these breaking theories that emerge from the academics could be sped up, they are seemingly just caught up in the dogma of rigour, validation and peer review. Weighed down in this legacy they often fail to provide the valuable insights that can alter the present day where the theory or dilemma has arisen.

That valuable thinking to address the very problem we need a solution too is today not having even further debate after a book comes out, sometime in the future. We need to begin to travel the road, not just survey it!
Actually it is rather ironic in one of Professor Christensen’s own theories, the disruption theory, that this is one of the real challenges within the publishing industry,  of being “disrupted,” as they fail to deliver in this faster world in the new alternative mediums many are looking for,  that he of all people chooses the old slower avenue of a printed book. Still he chooses to use this medium, such a shame when he expands on the very theories that explain much of what is presently going on today.

The world has sped up and I would urge Professor Christensen to get out of one of the very traps he has previously identified, and explains so well to others, for himself.  I would suggest his insights and suggested solutions are applicable to today’s problems and need exploring now. Can we afford to wait?

So what makes “the Capitalists Dilemma” so relevant today?
The basic concern today in most developed economies is the lack of real growth and the worrying concerns that each capital stimulus round seemingly does not offer that number of new jobs you would expect.  Old ones are being constantly being stripped away at a much faster rate. We are seemingly caught in a broad jobless economic recovery.

At the heart of this dilemma seems to lay the issues of the type of innovation being employed, the way we measure profitability, where this capital is being invested to offer increased returns and the lack of political and leadership will, or understanding, to change this.

Again when you read the article Professor Christensen talks of a doctrine of New Finance, taught over recent years by him and countless others in Academia, of failing to catch up with the new realities and teaching theories we need to operate in a changing world.

One of those is the need is to ‘account’ more in creating new jobs and people (gainfully) employed do not seem to be as much within any capital equation. Our new norm is certainly bringing increasing financial returns but without this job creation.

We seem to be faced with focusing on jobless innovation outcomes that are measured by magnifying each dollar invested by the classic ratios of RONA (return on net assets), ROCE (return on capital employed) and I.R.R (internal rate of return), used more when capital was scarce and costly so you husband resources.

Today capital is abundant and cheap – no, really!

Today capital is abundant and cheap, new skills are becoming scarcer, education is lagging the new knowledge economy need and we are applying these old rules of measuring outcomes in the wrong way in our changed world.

Professor Christensen argues that successful companies are making the right economic decisions within the wrong situation or economic needed times. Capital is not scarce, it is abundant, yet it seems we are investing in the wrong types of innovation. We still are measuring capital as though it was scarce when it is not.

Companies continue to drive assets off their books, they choose innovations that provide fast returns, they continue to outsource and they consistently keep the time horizons deliberately short for improving the rates of return and constantly higher dividends in focusing on the quick wins.

The politicians have not grasped the need to change the thinking to invest in longer term innovation that makes for more breakthrough and radical innovation activity.

Those that employ more people, kick starts new economic activity with fresh investment, new equipping to supply these new activities, and finally also attempt to reposition dividends in their longer-term value for the recipients.

Awash with money

In the Economist there was a recent article “A world of cheap money”  stating: “The message from the rich world’s central banks is clear: the era of ultra-loose monetary policy is here to stay.”

The Economist goes on to state: “Unfortunately, the effect on output has been more muted. America’s GDP is showing signs of accelerating. But Europe’s economies are flat or shrinking. Overall, rich-world growth is likely to be barely over 1% in 2013, little better than in 2012″

“Given the gap between financial froth and feeble growth, are central bankers doing the right thing? Supporters argue that cheap money is essential for economic recovery, particularly when (as in Europe and America) austerity-minded governments are tightening fiscal policy. Critics counter that low rates simply pump up asset bubbles, distort financial markets and risk inflation”

Clearly “monetary policy should not just operate in a vacuum” and it is Professor Christensen’s insight on where innovation is playing it part, or not in most cases, that can hold one of the real keys for rethinking how we measure success. Let me explain if you have not read his thoughts on this.

There are three types of innovation in his view where jobs occur or are lost.

These are summarized by Professor Christensen as:

Empowering innovations: these create jobs, because they require more and more people who can build, distribute, sell and service these products. Empowering investments also use capital — to expand capacity and to finance receivables and inventory. Empowering innovations are essential for growth because they create new consumption.

The second type is “sustaining” innovations: these replace old products with new models. They replace yesterday’s products with today’s products and create few jobs. They keep our economy vibrant — and, in dollars, they account for the most innovation. But they have a neutral effect on economic activity and on capital.

The third type is “efficiency” innovations: these reduce the cost of making and distributing existing products and services. Taken together in an industry, such innovations almost always offset the net number of new jobs, because they streamline processes.

But they also preserve many of the remaining jobs — because without those, entire companies and industries would disappear in competition against companies abroad that have innovated more efficiently.

Efficiency innovations also emancipates capital. Without them, much of an economy’s capital is held captive on balance sheets, with no way to redeploy it as fuel for new, empowering innovations until it is released.

His view here is: “as long as empowering innovations create more jobs than efficiency innovations eliminate, and as long as the capital that efficiency innovations liberate is invested back into empowering innovations, we keep recessions at bay” and suggests we are today not doing that.

The innovation machine is out of balance today

Today, our innovation activities are out of balance. I can strongly relate to this on where organizations are spending their innovation dollars: in short-term fixes, incremental thinking and efficiency relating projects, not on deepening innovation capacity.

We are presently encouraging our managers to measure profitability based on a return on net assets, or return on capital employed. That encourages companies to liberate their capital, so they invest in efficiency innovations, which means they can make even more money with fewer resources, so why would they invest in those more-longer term capital-intensive innovation projects under “empowering innovation?”

Professor Christensen offers this thought “what the economy ultimately needs are empowering innovations—like the Model T, the transistor radio. Empowering innovations require long-term investments, which tie up capital for years and years.

So companies are using capital to create more capital, and the world is awash in the result, more capital but the innovations we need to advance aren’t there”- this accumulating capital is remaining idle.

Today’s growth sustaining challenges are not framed properly

The need is to “unlock” the right type of innovation that creates a renewed, sustaining wealth for economic and industry revitalisation. There needs to be a shift from investing in efficiency innovation that tend to cut out jobs, where the focus is constantly on focusing on less capital in use and fewer people so that the extra release of capital is re-invested in more efficiency, not in disruptive or empowering innovation. The present day realities within business are how success is measures and if that is on RONA, ROCE and I.R.R then that is where the focus will remain.

Changing the existing paradigms takes time and convergence.

Empowering innovation takes time – anything from six to twenty years depending on many of the necessary long-term wealth creation factors required based on research and vision.

Two factors are well in place. We have capital, almost at zero borrowing rates, that the future net present value of any future stream of growth is identical to one that yields a return in weeks. We have a growing and compelling set of social needs to resolve many grand societal challenges that come more from empowering innovation.

Offsetting this we have a powerful set of factors to change if we see job creation as part of any economic recovery. We first have this current risk-aversion prevailing and we spend public capital on propping up ailing industries but do not pursue the alternatives with a grander vision and plan.

We are holding renovation back in some of these politically motivated decisions yet the young in most countries cannot find any jobs. We prop up banks with their bad loans yet the defaults by small and medium-sized enterprises will continue to rise.

In Spain, Italy, Portugal, Greece, Ireland, and many parts of the UK, along with others all have growing at alarming rates, bad debts. So many smaller businesses are close to the ‘tipping point’ of going bust here in Europe.

A bolder innovative framing is necessary

We need bolder re-framing of our challenges, a clear recalibration of our measuring success and a set of cohesive strategies, policies and political judgements.

What will eventually bring this to the boil is the unrest, unemployed, stagnating economies, risks of growing debt and loss of property and capital achieved from the past unless those in policy decision don’t ‘face up’ and make bolder, imaginative steps.

Our markets need stimulating and this will either be from importing the type of goods that meet our declining economic needs as those are produced more efficiently elsewhere. Not a good prospect to face.

Lastly the very company that needs financing does not get the financing it needs. Capital is presently hoarded in the billions on pristine balance sheets of the biggest corporations; billions are inert and uninvested in private equity funds and sitting in countless private bank accounts offshore.

According to one report $1.8 trillion just sits in American listed firms alone.
The missing link is between cheap money and finding ways to achieve new corporate investments in the developed  economies that need this, otherwise there continues to be growing issues of dealing in the latest crisis or further kicking the can down the road in future pay off from continuous mounting debts and a lack of addressing bad loans and all the structural problems we are not facing today except in applying ‘selective’ austerity..

So why has this caught my attention?

Simply incremental innovation (sustaining, efficiency innovation) is getting us no-where fast. You see so many people within many of our organizations, big and small, working longer hours, feeling reduced identification with what they are doing and lacking that sustaining satisfaction.

There are millions out of work that could offer positive economic activity contribution.

We could have innovation that is exciting, that is empowering and this does come from working on challenging that are game changing concepts that we often suggest today as distinctive, disruptive, breakthrough, radical and certainly are empowering.

We are failing to translate today’s set of challenges because the metrics applied are inappropriate to our needs today and in the future. We are applying solutions often in their vacuum, they boost sufficiently in small ways but lack boldness, changing the dynamics and policies, the way we should be measuring and valuing success.

We reflect where we are in the West – far too timid, applying often just a real hard dose of harsh austerity, minimal structural reform that have a constraint on growth as we don’t people in their rightful place within the equation, they are being progressively written out of the capital model we seem to be locked into.

We apply “selective” innovation solutions to meet mostly short-term gains.

There are different solutions that need discussion

There are different innovative solutions, those I will attempt to outline in my next article, more to stimulate and trigger awareness of alternatives for today’s more jobless innovation outcomes.

In the meantime watch Professor Clayton Christensen’s talk at the World economic forum under “an insight, an idea with Clayton Christensen”.

Worth watching, believe me, and then you might be reflecting on why we do need to change that does bring that real, fresh growth from innovation that has people and jobs as part of the lasting equation, that fits more in today’s world, needing innovation to begin a stronger recovery than we have seen in a number of years.

The post The Present Jobless Innovation Era We Face first appeared on Building Your Innovation & Ecosystem Intelligence.

The Forum for Growth and Innovation seeks to develop “breakthrough theories to help businesses become more successful innovators and create new, robust sources of growth”.  The webinar was all around surviving disruption but discussed also “looking beyond the horizons”.

The Theory of Disruptive Innovation

To offer a quote from the Forums own website (www.thefgi.net.):  “Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors”.

“An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.

Characteristics of disruptive businesses, at least in their initial stages, can include: lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics”.

The webinar raised in my mind many unanswered questions.
Central to the thinking for disruptive innovation is to address the jobs-to-be-done. Another nice piece that describes Clayton Christensen’s work in this area of JTBD is here. This seemingly simple idea has profound implications for re-framing industries.

Well in many of my unanswered questions there are some JTBD aspects clearly to this as well. Still that is another story for another day.

One question I had was this:

“Why do we have internal difficulties to self-disrupt?”
In most cases, organizations are not able to self-disrupt and this is largely covered by this veritable list of constraints. So I set about thinking about what these could be, here is my rather ‘stark’ list, can you think of any more?

• Organizations often are far too close to existing markets to recognize that they are actually shifting; they ignore or miss the signs in many ways.
• They get so fixed on their own perceptions they don’t see change coming – often until it is too late and have lost that intuitive, entrepreneurial touch within the mix.
• They have invested too much, they hang on, often reducing prices, pushing more volume into the markets, crank out even more “extras” to try and off set change.
• Organizations are full of rigidities, rules, procedures, processes and personalities and often no one is prepared to put their hand up to challenge the present paradigm.
• The reinforcing values are just plain tough to change, you need dynamite to shift these
• The people within organizations love the comfort of the nest they have built around themselves, who wants to bail out and expose themselves?
• The processes become overburdening, hard to change, far too complex to change without significant commitment and top management support
• Cultures are wonderful things but the dark side is they can stifle and constrain far more than promote and let free.
• Leadership is locked into the strategy, tied into compensation on delivery on the existing, not on the preferred, far more radical, risky alternatives
• Organizations, especially large ones are less than nimble, they fail to adapt and respond quickly enough – they prefer to double-down’ with more of the same but faster, leaner and more determined than ever, missing the real dangers occurring under their noses
• Today, we are putting more and more of our organizations into boxes, they are becoming highly structured and specialized to maximise effectiveness and efficiency.
• Markets are more global, faster, and fiercer to compete in, often organizations are reluctant to explore and experiment with new business models, or push into adjacencies for fear.
• Lastly it does not matter how hard many organizations try, they lack real intelligence in market and customer needs, hence why the jobs-to-be-done is one essential component.

While all these stay in place, or not recognized as inhibitors to your own disruption capabilities, it is not surprising it is in the end those up and coming usurpers, the nimble and unencumbered, that thrive and begin to disrupt. You simply struggle when you leave it to late- your organization needs to resolve many of the above issues before it is ever capable of responding.

Look more in than out – that is where your danger often lies
Sometimes we are spending all those significant efforts scanning the horizon for the next big disruptive ‘thing’ but in the end it is the internal difficulties that ensure it is ignored until it is too little, too late. Work on the warning signs daily.

“Perpetuating history”, as Clayton Christensen would certainly say, “simply opens the doors to disruptive innovation”. We need to really recognize ALL the symptoms on why we can’t internally self-disrupt.

Surviving disruption is something we all need to take the survival course on, so we all can recognize and deal with its introduction and constant threat to total disorder and multiple impact points upon our business.

Watch out, disruption is all around us.

The post Often we can’t self-disrupt as we feel constrained first appeared on Building Your Innovation & Ecosystem Intelligence.

I enjoy a lot of what Steve Denning writes and his series in nine parts on “Why Amazon Can’t Make a Kindle in the USA” (start here http://onforb.es/oK1Cxh ) has really hit home on the seriousness we are facing in Western countries over innovation capabilities.

He mentions the “decades of outsourcing manufacturing have left U.S. industry without the means to invent the next generation of high-tech products that are key to rebuilding its economy”, as noted by Gary Pisano and Willy Shih in a classic article, “Restoring American Competitiveness” (Harvard Business Review, July-August 2009).

The pursuit of profit is killing innovation
Last Friday, 18^th November, he followed this series of articles with a further one on a talk given by Clayton Christensen entitled “How Pursuit of Profits Kills Innovation and the U.S. economy” (http://onforb.es/rZ7l8U )  and that so much of our basic thinking taught in business schools and promulgated by consultants is partly the cause.

So I was faced with a ‘double sit up’ not a double latte, of Denning and Christensen, and that did more to wake me up than the caffeine intake I was having.

The bottom line is that major segments of the US Economy have been lost, in many cases, forever and that equally applies in Europe.

On the other side of the Pond- the EU and its Innovation Union.
Máire Geoghegan-Quinn, Commissioner for Research, Innovation and Science and Vice- President Antonio Tajani, responsible for industry and entrepreneurship have said: “As we emerge from crisis in the teeth of fierce global competition, we face an innovation emergency.

If we do not transform Europe into an Innovation Union, our economies will wither on the vine while ideas and talent go to waste. Innovation is the key to building sustainable growth and fairer and greener societies. A sea change in Europe’s innovation performance is the only way to create lasting and well-paid jobs that withstand the pressures of globalisation. ”

With an ageing population and strong competitive pressures from globalisation, Europe’ s future economic growth and jobs will increasingly have to come from innovation in products, services and business models.

This is why innovation has been placed at the heart of the Europe 2020 strategy for growth and jobs.

The long list of ‘must do’s’ suggested within the EU recommendations all are shouting after the horse has bolted from the barn. In both Europe and the US we are losing our capacity to innovate as we are rapidly losing our knowledge and experience built up and we are facing a ‘knowledge deficit’ exported over many years to developing countries.

This will place these countries even in more a dominating position in years to come.

We may be in a series of financial crisis but the ‘knowledge deficit’ one will be even more damaging to our future prospects.

The real crisis is not the current financial one; it is knowledge application for job creation.
We are simply losing our knowledge to create things close to home we are being ‘forced’ to seek global collaborations as knowledge simply is found and extracted where it is best served. How can we reverse this for many nations needing revitalization as knowledge leads to jobs. For many, we need a massive bailout plan, not for our financial debts but for our growing knowledge deficits.

Any declines, closures and more importantly, as the business firms continue to push to go overseas and chase low cost manufacturing places simply sets off a powerful chain reaction. Expertise is lost, advanced research suffers as more trained people seek meaningful work that relates to their skills and qualification overseas, increasingly in countries outside the US or Europe.

In manufacturing, in significant decline in Europe and the US for many years, those daily interactions between process and engineering leads to new design, fresh thinking to solve problems so knowledge builds up in locations closer to the manufacturing point and then, more businesses are ‘forced’ to locate closer to where the action is. As Pisano and Shih state in their HBR article “

In the long term an economy that lacks an infrastructure for advanced process engineering and manufacturing will lose its ability to innovate.”

The argument is we adopt a more strategic approach to innovation.

This I couldn’t agree more with. Innovation must become more of the overarching policy objective, it needs to go well beyond leveraging our strengths, and it needs to draw back in lost knowledge before it is too late.

We need to reverse the outsourcing policies driven by short term gain and not accounted for in the total ‘cost and benefits’ that society eventually pays.

We need to alter not only the measuring criteria spoken off with Clayton Christensen’s phenomenon of “driven by the pursuit of profit” in the above mentioned article, it lies in calculating a different ‘rate of return’ (IRR) so well put within this article.

This last article from Steve Denning (re Pursuit of Profits) sums it up

“Thus when a firm calculates the rate of return on a proposal to outsource manufacturing overseas, it typically does not include:

• The cost of the knowledge that is being lost, possibly forever.
• The cost of being unable to innovate in future, because critical knowledge has been lost.
• The consequent cost of its current business being destroyed by competitors emerging who can make a better product at lower cost.
• The missed opportunity of profits that could be made from innovations based on that knowledge that is being lost.

The calculation of the IRR based on a narrow view of costs and benefits assumes that the firm’s ongoing business will continue as is, ad infinitum. The narrowly-defined IRR thus misses the costs and benefits of the actions that it is now taking that will systematically destroy the future flow of benefits.

The use of IRR with the full costs and benefits included would come closer to revealing the true economic disaster that is unfolding”

Different mindsets and different solutions are needed for a better Innovation Union.

At a time when the external environment is highly dynamic, businesses that exist today (irrespective of where they locate) may be gone tomorrow. To survive in this world, a different kind of mindset is needed and if I may say- imposed.

The traditional ways we see our business, in isolation of the dynamics going on around us where profit maximization driven by management’s preoccupation on efficiency at often the cost of real innovation. The drive for cutting costs to meet the quarter and thus losing more knowledge that resides within, and then the consistent outsourcing, this relocating chase, is an eventual death-spiral for many economies.

Whole communities that had previously built around ‘knowledge clusters’ suffer and go rapidly into decline and over the long run, simply die and fade away, not relevant any more- gone overseas!

Our continued loss of knowledge, with our continued uneven recognition of the real value of innovation, will continue to feed this death-spiral unless we can somehow reverse these trends.

Moving more knowledge and the associated assets away from the US and Europe might seem sensible for today’s managers and financial backers but this is exporting knowledge and experience and this makes up innovation, it is where improvement, breakthroughs and future competitiveness come from.

We are rapidly losing know-how, it is what is happening that give me greater cause to worry for our long term prospects than the financial crisis. We are losing our competitive positions as any growth in the economy is in investing in knowledge for people to innovate.

How far can we go on this slippery slope as money does quickly follows where knowledge resides, and this is rapidly moving overseas, located increasingly in Asia.

Until we recognize this, we can ‘shout’ long and loud but the (knowledge) horse is fast galloping away from us and we will be left with simply pockets of incremental innovation, while others lead, we will simply follow along in their dust.

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