Dynamics of innovation - Building Your Innovation & Ecosystem Intelligence

Are you ready to explore Dynamic Ecosystem Principles as Business Leaders?

@paul4innovating — Fri, 02 May 2025 13:06:25 +0000

Moving from a static environment into a dynamic one

So much is spoken about around “dynamics” when it comes to projecting a higher level of vibrancy or providing the extra value placed within your organizations success. In any thriving business ecosystems it is the dynamics within the system that empower new avenues of innovation, growth and resilience in today’s interconnected world.

I keep reverting back to dynamic ecosystems as it is a journey that requires ongoing nurturing and adaptation but recognizing its central importance is significant.

“Imagine your business is not a static entity, but as a thriving ecosystem – more resilient, innovative, restless and adaptable that you ever thought possible. By embracing the principles of Dynamic Ecosystem thinking, we can unlock new levels of growth and competitive advantage.”

Expanding on the idea of Dynamic Ecosystems as the decision-making and adaptability core of business ecosystems involves positioning them as both the “intelligence layer” and the “adaptive engine” that powers business agility, resilience, and growth. This approach redefines their role from a passive network to a responsive, intelligence-driven hub that continuously senses, learns, and guides the ecosystem.

For me Dynamic Ecosystems become the Core of our innovating activity

The dynamic ecosystem provides the flows between the ecosystems, facilitating these connections. So imagine a circular model with the other ecosystems arranged around the core, the dynamic ecosystem, link the interconnected parts and multi directional arrows showing constant flow and interactions around and through the middle.

The Dynamic core is constantly processing and distributing, challenging, providing information, resource and innovative ideas and insights to give a bidirectional flow.

It is the founding principles of Dynamic Ecosystems that unlock levels of growth and competitive advantage.

Lets explore those principles from a leadership “language” perspective:

From Interdependence & Mutual Benefit to “Strategic Partnerships for Exponential Growth”:
- Business Language: “Instead of isolated silos, we’re building a network where our success is intertwined with our partners’. By strategically collaborating and creating mutual value, we unlock new markets, share risks, and achieve growth that would be impossible alone. Think of it as a force multiplier for market penetration and innovation.”
- Investment/Exploration Value: Investing in identifying and nurturing the right strategic partnerships within the ecosystem will lead to new revenue streams, access to complementary capabilities, and reduced cost of entry into new markets. Exploring collaborative business models will reveal untapped value.

From Resource Flow & Circulation to “Optimized Resource Utilization & Accelerated Innovation Cycles”:
- Business Language: “We’re breaking down internal barriers and external silos to ensure seamless access to critical resources – data, insights, talent, technology. This eliminates redundancy, accelerates knowledge transfer, and fuels faster innovation cycles. Imagine R&D that’s amplified by the collective intelligence of the ecosystem.”
- Investment/Exploration Value: Investing in interoperable platforms and data-sharing infrastructure will improve efficiency and unlock valuable insights. Exploring open innovation models and talent-sharing initiatives will accelerate the development and adoption of new products and services.

From Diversity & Redundancy to “Enhanced Resilience & Risk Mitigation”:
- Business Language: “A diverse ecosystem isn’t just about variety; it’s about building resilience. By engaging with a wide range of partners, we reduce our dependence on any single entity and create multiple pathways to achieve our goals. This makes us far more robust in the face of market volatility and unexpected disruptions.”
- Investment/Exploration Value: Investing in building a diverse partner network and exploring alternative solutions within the ecosystem will de-risk our operations and create more agile supply chains and innovation pipelines.

From Adaptation & Evolution to “Future-Proofing Your Business through Continuous Learning & Agility”:
- Business Language: “The market is constantly changing. A dynamic ecosystem allows us to continuously learn, adapt, and evolve at a pace that individual companies can’t match. By embracing experimentation and scaling successful adaptations quickly, we stay ahead of the curve and future-proof our business.”
- Investment/Exploration Value: Investing in data analytics capabilities to monitor ecosystem trends and in agile experimentation frameworks will enable rapid response to market shifts and the early adoption of emerging technologies.

From Self-Organization & Emergence to “Unlocking Breakthrough Innovation & Unexpected Opportunities”:
- Business Language: “By fostering an environment of autonomy and collaboration, we create the conditions for unexpected breakthroughs and the emergence of entirely new business models. We’re tapping into the collective creativity of the ecosystem, going beyond the limitations of our internal thinking.”
- Investment/Exploration Value: Investing in platforms and initiatives that facilitate open collaboration and idea generation can lead to disruptive innovations and the discovery of unforeseen market opportunities.

From Hierarchy Based on Value Contribution to “Attracting Top Talent & Rewarding Impact”:
- Business Language: “In a dynamic ecosystem, influence and leadership are earned through the value you bring. This attracts top talent who want to make a real impact and fosters a meritocratic environment where contributions are recognized and rewarded. This creates a powerful engine for attracting and retaining the best.”
- Investment/Exploration Value: Investing in transparent performance metrics within the ecosystem and in recognition programs will attract high-value contributors and incentivize active participation.

So why are Dynamic Ecosystems needed to become the core?

The concept of Dynamic Ecosystems as the central element makes sense for several reasons:

Adaptability: Dynamic Ecosystems inherently embody the ability to respond and adapt quickly to changes, which is crucial in today’s fast-paced business environment
Catalyst for Innovation: By creating an environment that is constantly in flux, Dynamic Ecosystems can serve as a trigger for continuous innovation, pushing other ecosystem types to evolve and innovate
Responsive Framework: A dynamic core allows the entire Integrated Business Ecosystem Framework to be more responsive to market changes, technological advancements, and shifting customer needs.

It is viewing Dynamic Ecosystems as the intelligent, adaptive, and resilient core of future organizations, highlights their central role in driving innovation, flexibility, and sustainable growth.

The Call to Action:

“The old models of isolated growth are reaching their limits. Dynamic Ecosystems offer a fundamentally new way to build a more resilient, innovative, and ultimately more successful business”

The Concept for a Dynamic Ecosystem as the Core to the Interconnected Business Ecosystem framework has been a realization than makes it central

The time to explore these principles and strategically invest in building your ecosystem is now. Let’s move beyond incremental improvements and unlock exponential potential.

By framing the principles in terms of tangible business benefits like growth, resilience, innovation, and talent acquisition, and by highlighting the direct value of investment and exploration in each area, you begin to recognize the concept of Dynamic Ecosystems does resonate with those progressive business leaders and motivate them to take action. The key is to connect the “wisdom” to bottom-line results and strategic advantage.

Having Dynamic Ecosystems in the core it moves away from static, hierarchical models towards a more fluid and responsive interconnected framework that better reflects the realities of today’s business landscape.

The post Are you ready to explore Dynamic Ecosystem Principles as Business Leaders? first appeared on Building Your Innovation & Ecosystem Intelligence.

We require a more dynamic view of Innovation understanding.

@paul4innovating — Sat, 01 Apr 2023 09:04:49 +0000

So why is finding the right skills and competencies for innovation a real challenge but so essential?

How do we know the critical skills, competencies and capabilities for innovation? Also, what are the additional dependencies for sustaining innovation capabilities that are becoming vital to understand so an organization can place the appropriate resources behind them, build upon a sustainable future and leverage these innovation dynamics?

We often miss or fail to ask which skills or attributes are critical to providing a more significant impact for a successful innovation solution. What naturally occurs can be only having access to a fundamental building block, like a dedicated innovation team. This will often stay limited in outcomes as it may lack the necessary skills, understanding, or capabilities to tackle complex challenges. The result will provide a limited impact on finding the best solutions to these complex challenges and problems we often need to tackle.

We stifle and lose the real potential by not having the correct dynamics of innovation on offer. Recognizing the skills, competencies, capabilities, and capacity needed does constantly differ by the problem tackled. We must identify what is needed and the gaps to be plugged through a comprehensive fitness framework that can be applied constantly.

Knowing the critical differences and then applying the ones that deliver the impact required to a ‘given’ problem or challenge often needs us to recognize innovation competencies and capabilities that are needed.

These skills need to be constantly mixed up, reconfigured and reblended to put to use the ‘optimum’ to show the best possibilities to deliver innovation Knowing those offers a different measurement for a ‘return on impact/investment’ (ROII) for real business value., judging speed and impact by applying this optimum.

Today, we lack a comprehensive system model that brings the critical innovation skill factors out, gives them their appropriate values, and when those needed are applied appropriately. We need a model that recognizes that different challenges and problems require the ability to model different innovation dynamics, consciously dampening down some and empowering and energizing others.

Strong personalities can (badly) influence creativity or innovation execution. If these “personalities” are too dominating, the innovation outcome is often wrong; it often ignores the multiple options available to us in innovation teams, or we should be able to call upon across organizations.

Equally, if the innovation team is too ‘light’ in the depth of experience on a given problem, the risks rise of generating the best results due to a lack of appreciation of all that is needed or how to ‘pull it’ all together. We lose precious time resolving uncertainties and clarifications if we don’t have the necessary understanding and lack the expertise to translate this.

I firmly believe innovation teams that are static and not fluid in constantly ‘churning’ and mixing diversity to meet different challenges or problems often produce less than optimal results. For example, the complexity rises if the same people in a given innovation team cannot deliver the optimum result for different challenges and problems. Outsourcing only partly helps.

People and their curiosity, passion, experience and abilities make innovation happen through what they ‘bring in’ of their experiences, energy, insights and competencies to apply these to each specific challenge. The issue is how do we fully identify the ‘what’ that is needed? We need to invest more in assessing and evaluating the competencies on hand, from journey start to finish, and they clearly often differ.

Good resources are scarce; how do we identify them to deliver impactful innovation?

We still don’t understand the ‘dynamics’ of innovation and the interdependency of the parts. Which parts have a more significant impact, and which are less important? Innovation is still not treated company-wide holistically, as recognition of the dependencies is poorly understood. This is what needs to change and why innovation is not fully integrated across the organization; it stands alone far too much.

What and where do you place your resources to gain a more significant impact? What is essential to recognize as needing additional ‘weight and focus’, what capability and competencies need a stronger emphasis and why? How can we identify these and make the innovation process more dynamic yet embed constantly as routines?

What would happen if we ignored certain innovation aspects? What would have a more significant impact on our business? Do we understand all the options we might have? Do we spend enough time on putting the most appropriate skills, capabilities and competencies to work on our challenges and problems?

The need to look harder through the Innovation Lens

Why Fitness Landscapes? We do need to get to know where our innovation capabilities lie.

The pressing need for a firm is to integrate, build and reconfigure internal and external competencies/ capabilities to address rapidly changing environments and have the ability to achieve different, new innovative forms in constantly evolving and adapting skills.

This calls for more ‘dynamic capability” to be achieved. The fundamental question that needs to be addressed is “what are our dynamic capabilities” and more importantly, which critical ones should we focus upon to improve our capabilities and competencies to innovate?”

Fitness landscapes provide the understanding of the existing position and ‘point’ to where to place your resource to improve your innovative capacity. I have been exploring fitness landscapes from theory to application for several years.

Fitness Landscapes as a solution has its roots in Darwin.

In any competitive situation, the survival of the fittest dominates (Darwinian). Knowing your innovative fitness is essential in this race. The question often raised is where do we focus our limited resources to achieve better fitness and succeed at innovation?

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 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 and increasing tangible outcomes.

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

The ability to identify emerging patterns provides the need to act and invest; you begin to make adaptive walks, applying the capabilities and competencies needed for a given challenge or problem. Over time you begin to learn and spot different values and skills to know who and what can move you to the higher fitness points where innovation viability is enhanced, as well as understanding is needed to be in place to resolve the challenges faced.

Greater fitness understanding equates to more value-creation potential. I believe you can map the needs on a constant evaluating basis, working through the requirements based on a structured approach based around appropriateness, impact and intensity, which I call descriptor sets.

The ability to inter-couple landscape entities and exploit individual interactions alters your dynamics to innovate and improve repeatable cycle times and provides increasing options to explore. Each challenge or problem is different, and so should the application of innovation capabilities, competencies and capacities.

The solution I see has a framework but needs to go further from theory into more testing and application. What are the mutual dependencies, how the innovation ‘system’ behaves, what are its more essential impact factors which are weaker and what should be considered in the ‘best’ innovation environment?

I keep working on this; I need some partners to collaborate and invest in building this out further.

Paul Hobcraft and Agility Innovation Specialists, all rights reserved, a journey that continues to pursue the innovation dynamics studies and suggested frameworks 2009 – 2023.

The post We require a more dynamic view of Innovation understanding. first appeared on Building Your Innovation & Ecosystem Intelligence.

Understanding your innovation capabilities to make them more dynamic

@paul4innovating — Fri, 28 Dec 2018 14:13:33 +0000

The Nine Stages that are needed for developing an understanding of your innovation capabilities, so as to make them more dynamic and as a result to be at the top of your innovation game.

This “step process” I believe gets you to the point of understanding what innovation capabilities are a better ‘fit’ for the purpose, to deliver on your innovation needs on a consistent, repeatable and evolving basis.

Building innovation capabilities take time; they are complex, highly structured and multi-dimensional. Any structured approach to tackling innovation takes time and considerable commitment. Any learning involves sensing, seizing and then transforming.

We are searching for what makes up the present system and what needs to be part of the future to create a ‘best’ innovation capability environment that is sustainable into the longer-term. Those that can be continually ‘orchestrated’ and constantly adapted to meet the strategic need.

We are striving towards a true ‘innovation coherency premium’ in design, knowing what makes up your core dynamic components. The outcomes are to know where to invest, what to dampen down and what aspects can evolve naturally and be ‘taken along’ as you focus upon the ones that are more dynamic and relevant to your innovation needs.

Getting Started – Understanding the Needs & Imperatives of Innovation Fitness

Why we must travel this critical path for Innovation.
The meaning of dynamic capabilities and innovation fitness landscapes
Merging the theory with practical reality to produce new outcomes and positive results.
Focusing on resources and performance – why is this important
The problem is knowing what we have and what we really need and seeing the differences

The Fuel of Innovation Performance – the dynamics of innovation

A sharper, clearer focus on innovation resources to meet the strategic need
What is known about resources to sustain, enhance performance
Knowing and aligning your strategic criteria – for sound innovation approaches
Getting innovation within the right context of your business
Moving your resources in the right direction takes courage and decisive leadership

Getting even more specific – quantification and qualification

Recognizing the building of scale, change rates and dynamics that happen over time and why we need to constantly build our innovation capabilities.
Developing the resources to meet the need – structured, focused, clarified by bringing out the necessary discussion.
An illustrative scenario for a directional innovation fitness landscape map
Recognizing resources can come beyond the firm and then bringing these in successfully, in gradual steps. Managing within a more open environment.
Achieving mutual dependencies to support; recognizing the hindering ones
Being aware of the impact of different scenarios in the management of innovation allows for designing a flexible response capability

Building the Innovation Fitness Machine – reinforcing feedback, identifying needs

Recognizing the current status, spotting emerging patterns, seeing spaces and gaps and identifying solutions.
Beginning the ‘adaptive walk’ to get to higher fitness points needed to compete.
Clarifying the complementary resources, looking to embed new routines quickly and set up follow through approaches.
Introducing natural tensions into the system to trigger ‘step change’
Resource dependence climate, culture, diversity, intensity, and uniqueness
Reinforcing feedback – watching for dangers, managing the machine capacity, removing the brakes selectively
Shifting your resources need not deplete or force other people to compete for them – working through the tensions within teams and silos.
Matching resource dynamics with the innovation value chain & life cycle stages helps maintain momentum
Simulation modeling the ‘what ifs’ and ‘why’

The Strategic Architecture – designing the system to perform as needed

The step process for designing and executing the architecture design
Diagnosing performance challenges and road blocks – resolving, moving on
Lining up the solutions is not a linear process and needs careful management
Addressing the effects of intangibles in the Strategic Architecture.

The Hard Face of Soft(er) factors – the hidden power of intangible resources

Clarifying the impact of the intangibles and recognizing the time, climate and conditions are significant contributors to innovation activities.
The different rivalry types: internal and external, inter department, inter projects and working through resolutions to these.
Reflecting feelings and expectations, addressing all the different needs
Measuring the tougher parts of intellectual capital
The real value of your intangible resources
Recognizing the value of hidden innovation and spotting its occurrence

Entering into Competitive Battle – the Dynamics of Rivalry, the Uniqueness of You

Recognizing, developing, capturing, transforming, avoiding and outmaneuvering
Your point of choosing what, where, how and when to compete.
Building capabilities that are unique to you and hard to replicate
Building sustainability into the innovation equation as ongoing
Extending the turf, exploiting the situation, pushing beyond, seeking partners.

Building and Testing Capabilities to Perform

Measuring capabilities through different fitness levels and scale.
Learning to build capabilities as ‘ongoing’ and evolving for changing needs
Re-Structuring the process for dealing with the dynamics of change
Knowing the points of impact on performance to enable recognition and reality
Managing innovation performance progressively across the spectrum of business need through testing and extending capability learning.
Building from personal to the team, to organizational learning, in measured steps
Recognizing the role of leadership, achieving strategic alignment and working on broadening out innovation competence at different organizational levels.

Keeping the innovation fitness wheels turning, keeping your eyes on the road

Resolution of conflicting goals, control, and structure
Dissecting conflicting positions, resolving the impasse
Knowing the limits of human engagement
Goals, controls, and measurements can dominate and strangle
Keeping the measurements simple and clear
Managing innovation as a critical strategic resource
Merging the results into a greater alignment to Strategy and Approaches

The end result is looking to generate your fitness landscape

The post Understanding your innovation capabilities to make them more dynamic first appeared on Building Your Innovation & Ecosystem Intelligence.

Recognizing the different capabilities to develop and grow

@paul4innovating — Tue, 26 Jun 2018 07:23:06 +0000

A firm’s ordinary capabilities are the ones that enable us to perform efficiently and effectively, those essential routines and practices that often require having a high level of technical need supporting these activities.

In contrast, dynamic capabilities are those higher level competencies that determine a firm’s ability to integrate, build, and reconfigure both the resources and competencies to possibly shape, have the power to transform and then be deployed to meet rapidly changing business environments to take advantage of these changing conditions.

Recognizing the importance of Dynamic Capabilities

Dynamic capabilities are about selecting the right things to do and getting them done, while ordinary capabilities are about doing things right. The former implicates dynamic efficiency, the latter static efficiency.

Dynamic capabilities require an organizational form that leverages the knowledge and capabilities of managers throughout the organization. In business firms with strong dynamic capabilities, the key tasks of managers, especially those in the top management team, are entrepreneurial. It’s not just a planning role; it’s also strategic. It involves planning along with engagement and enactment, it encourages agility.

Appreciating and leveraging those ordinary capabilities is equally essential

The stronger these ordinary capabilities can be ‘honed’ then organizations can go beyond performing basic business functions well and can excel in these. While most capabilities, including some dynamic capabilities, are underpinned by organizational routines, many of the activities of top managers are non-routine by nature.

The key entrepreneurial capabilities needed for asset orchestration and realignment of the enterprise often reside in the skills and knowledge of top managers, managing the routines and assets and respond dynamically when changes are happening to adapt and respond

Ordinary capabilities involve operations, administration, and managing the governance. They are rooted more firmly in routines that are dynamic capabilities. A routine is a repeated action sequence, which may have its roots in algorithms and heuristics about how the enterprise is to get things done. Organizational routines transcend the individuals involved.

Finding the right complementary blend of capabilities is a real challenge to achieve

The capabilities perspective views the enterprise as clusters of complementary assets that must be combined and coordinated to create value. The utilization of such assets, therefore, requires managerial action. Managers in the dynamic capabilities framework perform that role. They orchestrate and call into being, the assets that are vital to firm performance.

They determine the speed at which and the degree to which, the firm’s particular resources can be aligned and realigned to match the requirements and opportunities of the business environment in order to generate sustained positive returns.

The alignment of resources both inside and outside the firm includes assessing when and how the enterprise ought to form alliances and joint ventures with other organizations.

Understanding all your required capabilities needed is essential

Valuing and knowing both your ordinary repeatable capabilities, to enhance and improve existing performance and discovering those that are more dynamic in nature, to change performance more significantly are both critical to identify, build and support in both consistent and thoughtful ways. The key is knowing what is critical and then how to focus and invest in those that drive and sustain performance.

Investing in a mapping of your innovation fitness landscape can significantly contribute to this understanding and advance organizational performance in the critical areas that offer it present and future value.

Extracts have been drawn from the paper and built upon: “The Functions of Middle and Top Management in the Dynamic Capabilities Framework” by Sunyoung Lee and David J. Teece

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Struggling with counting ALL the sums of our capital

@paul4innovating — Tue, 12 Jun 2018 15:16:58 +0000

Organizations have been focused for far too long around the importance of financial capital. It determines and drives organizations destinies. We are caught in a constant focus upon our achieving a return on our (financial) capital as our measuring criteria. Organizations strive for improving their ROCE, RONA, IRR, EVA and a host of other financial measures.

As Clayton Christensen has been arguing the agenda of organizations begins and ends with the “search for numbers”. I think there is a time for changing this, we need to search for the knowledge that makes-up eventually the numbers.

There has been a distant voice for some time putting forward the need to appreciate and value the other capitals sitting within organizations. Much of the discussions have been housed under the term “intellectual capital” which denotes the sum of knowledge made up and contributed by our human assets, our organizational structures and our relationships that are developed.

These are the ‘capitals’ that transform into economic value through organization action. It is the financial capital that simply finances this.

Financial capital dominates any discussions

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

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

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

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

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

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

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

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

Learning capital needs to emerge and dominate future discussions

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

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

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

We are increasing opening up

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

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

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

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

Recognizing where our true value resides

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

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

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

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

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

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

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Putting some dynamic tension into the system

@paul4innovating — Fri, 08 Jun 2018 15:17:39 +0000

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

1). A common language is essential

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

2). Creating constant opportunities for conversations

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

3). Using the knowledge that resides

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

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

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

5). Capturing and extracting tacit knowledge

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

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

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

The ability to harness our dynamics is vital

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

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

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Innovation has a hard job to align

@paul4innovating — Tue, 05 Sep 2017 10:01:32 +0000

We need to recognize that innovation is one of the hardest things to align to strategy. It’s inherently messy, fairly unpredictable and its team-orientated approach sometimes cuts across borders, challenges different established positions and seemingly conflicting priorities.

It often challenges the status quo and can on certain occasions, potentially challenge the stated strategic goals as those ‘disruptive forces’ have not been addressed radically enough. Innovation often “asks” difficult questions of ourselves.

We keep asking a lot of innovators but consistently restrain them or starve them of essential resources, at the critical times they need them. We seem to get in the way of blocking innovation so it can’t be seen to align with the goals or vision of the organization.

We keep extorting innovators to raise their game, constantly trying to shape their work so it can fit. We are constantly encouraging innovators to abandon their personal judgments, open themselves up to different possibilities to try and make it “fit” with what we have got or already invested into.

We ask innovators to keep resolute and keep trying, keep pushing the boundaries, challenging and sometimes disrupting the established practices and processes, organizations like to keep in place but this is a very ‘uneasy’ and needs courage, belief but most of all alignment. Innovators need to feel confident they are fully supported and encouraged. They need empowering.

The innovator is constantly dealing with ambiguity, managing a far more dynamic process of knowledge learning and investigating. Often this is in direct conflict or tension with the majority of the organizations need to extract the most efficiencies and effectiveness out of the established systems and processes.

Strategic design often does not single out innovation as different, it expects it to comply. It is this lack of recognition that causes much of the misalignment, as it does not conform to the norm.

Yet strategy and innovation have much in common. They are both dealing with uncertainties, attempting to quantify uncertainties and unknowns, working towards a future state that advances the business by identifying and capturing new opportunities.

This is where cascading helps with alignment- consider a model

To achieve alignment, a cascade of better choices is needed that keeps mapping back to innovation activities and strategic need.

This calls for the need for a choice-cascade model where understanding flows through aligned cascading choices. Its aim is to empower firstly, by promoting and encouraging different levels of sound or best judgment, to enable individual choices, so as to allow for a ‘choice-maker’ to push this back upstream. Roger Martin and Hilary Austen have suggested “the art of integrative thinking”.

Choice options cascade down from the higher-order choices. These should set the context for and constrain (help in defining) lower-order choices.

Choices become inter-related and need to fit context and constraints from this higher-level. If there is difficulty in the fit, then the higher order needs urgently revisiting, hence the cascading effect is a constant, dynamic two-way flow.

Today, if we recognize change is a constant, flowing and rapidly changing part of how we do business, by having in place this choice cascading model you can unfreeze part of a strategy that is not ‘aligning’ with a changing world. It makes the decision-making process more dynamic and allows for greater contribution to strategic choices and the innovation process can equally respond and align on a far quicker, adaptive path.

Choice-cascade needs structure and operating principles

Choice makers within this model need to be explicit in the why:

Explain the choice that has been made and the explicit rationale behind it
Explicitly identify the next downstream choice to make it a joint venture
Assist in making the downstream choice happen explicitly
Commit to revisiting and modifying the choice based on explicit downstream feedback

To move towards choices that can outline desired outcomes and describe ways and means to achieve them allows for this alignment and flow of understanding.

A cascade must move in both directions

Water flows down but it is the ‘pushing back’ provides this feedback cascade, where the real fate of change and realization resides is in recognition and ongoing dialogues. To cascade back, clarity or questioning needs a mechanism or process to return to the top. You gain alignment through this method of cascading both up and down organizations in deliberate ways. We are seeking this alignment constantly, it is the lightning rod that transmits the energy to gain fusion.

To encourage alignment, they need to be explicitly linked to key desired behaviors, determined by the needs of the individual organization. Alignment needs to equally map back to a high consistency in core values expected in practicing, as important. I would suggest a good innovation governance design significantly helps this. This is where building the innovation culture, the environment it works within and the climate that is encouraged prompts the dialogue, conversation, and engagement.

Underpinning this alignment within the Cascade’s design and identification, you equally build a ‘belief’ audit. Its aim is to uncover where alignment is achieved, misunderstood and equally highlights where it needs a better bridging mechanism and most importantly, where there is critical misalignment to be addressed at a higher level. This belief audit strengthens the choice-cascade model as it opens up the dialogue surrounding innovation and its strategic (or operational only) alignment.

How can innovation get squared away with strategy?

As I mentioned earlier it is getting innovation into this ‘choice mentality’ on where to play and what seems to be the real wins by providing as much understanding of the judgment of why it contributes to the strategic goals. You align it or ‘flag’ it. To get innovation to align you need to discuss a whole array of gaps. It needs dialogues, engagement and a clear, cohesive set of ‘shared’ objectives of what innovation can make a contribution and deliver a difference.

Clearly, if you lack this deep understanding of how the organization’s strategy was brought together, the thinking behind it, then innovation will often fall short in delivery, as it can’t have enough of the understanding to be aligned. Making hard choices is tied to aspirations of knowing where you want to place your bets, to win.

Often it is within the strategies lies the potential new spaces to play. Strategy informs innovation. It becomes the catalyst of where-to-play and how-to-win and with this, you are giving innovators a better chance to deliver back concepts for those hard choices to be made, designed around innovate concepts that align and feeds the strategic design with winning designs

Having a cascading model in place allows that essential ‘flow’ that connects innovation to strategy but more importantly becomes the connecting point for all within the organization to identify with and…..align too.

Contact me if you would like to learn more.

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Recognizing the different capabilities to develop and grow

@paul4innovating — Sun, 24 Aug 2014 11:35:48 +0000

In contrast, dynamic capabilities are those higher level competences that determine a firm’s ability to integrate, build, and reconfigure both the resources and competences to possibly shape, have the power to transform and then be deployed to meet rapidly changing business environments to take advantage of these changing conditions.

Recognizing the importance of Dynamic Capabilities

Appreciating and leveraging those ordinary capabilities is equally essential

Ordinary capabilities involve operations, administration, and managing the governance. They are rooted more firmly in routines than are dynamic capabilities. A routine is a repeated action sequence, which may have its roots in algorithms and heuristics about how the enterprise is to get things done. Organizational routines transcend the individuals involved.

Finding the right complementary blend of capabilities is a real challenge to achieve

The capabilities perspective views the enterprise as clusters of complementary assets that must be combined and coordinated to create value. The utilization of such assets therefore requires managerial action. Managers in the dynamic capabilities framework perform that role. They orchestrate, and call into being, the assets that are vital to firm performance.

They determine the speed at which, and degree to which, the firm’s particular resources can be aligned and realigned to match the requirements and opportunities of the business environment in order to generate sustained positive returns.

The alignment of resources both inside and outside the firm includes assessing when and how the enterprise ought to form alliances and joint ventures with other organizations.

Understanding all your required capabilities needed is essential

Valuing and knowing both your ordinary repeatable capabilities, to enhance and improve existing performance and discovering those that are more dynamic in nature, to change performance more significantly are both critical to identify, build and support in consistent and thoughtful ways. The key is knowing what is critical and then how to focus and invest in those that drive and sustain performance.

Extracts drawn from the paper and built upon: “The Functions of Middle and Top Management in the Dynamic Capabilities Framework” by Sunyoung Lee and David J. Teece

The post Recognizing the different capabilities to develop and grow first appeared on Building Your Innovation & Ecosystem Intelligence.

Combining four foundation pillars.

@paul4innovating — Thu, 24 Jul 2014 16:04:48 +0000

We need to think about recognizing the ‘combining effects’ of four foundation pillars; of value creation (vc), business models (bm), intellectual capital assets (ica) and innovation capital (ic). It is the dynamics within the multiple combinations that will generate the future wealth creation we need.

We are in need of having a better understanding of the integrated value focal points of these four pillars combining, they need connecting so we can build the supporting structures and place the roof of need, our wealth creating one, to give us a new potential of harnessing our innate abilities to be creative. These four pillars offer perhaps a new core, a new transforming power, they make our activities connected and dynamic.

Unlocking all our potential is the job needing to be delivered upon

Our job today is to unlock the potentials from knowledge, harnessing our capitals to focus more on releasing our resources to work on their dynamic capabilities that combine vc + bm + ica + ic to make this a ‘room’ that gives us the potential to reside and generate new wealth potential.

A transforming one, where the make-up of value creation, articulated through business model designs by knowing the capitals that ‘feed into’ and build our stocks and flows for new innovation that does have the greater potential for wealth creation to occur.

The post Combining four foundation pillars. first appeared on Building Your Innovation & Ecosystem Intelligence.