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

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

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

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

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

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

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

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

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

Most of our capitals are learning capitals

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

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

My stated value position is…

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

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

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

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

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

The emphasis needs to point more to building dynamic innovation capabilities

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

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

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

Integrating back or making anew

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

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

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

Our businesses are measured constantly on their financials, we produce a constant flow of reporting documents that provide useful insight and allow for a more informed judgement by present and future investors on the health of the company.

We are ‘wedded’ to our financials and ignore the real value within our organizations of all the other critical capitals that generate and strengthen the business, yet these are the MOST valuable to leverage.

What if that same person came to you and asked instead: “what makes up the innovation capital of the company?’” could you answer this as clearly as the financial one?  I would suggest most probably not. (By the way, if you feel you can then please let me know I would be more than interested).

We are focusing far too often on past performance and not future generating potential. We constrain ourselves, our growth and our potential by staying fixated on just the financials, constantly worried over the short-term results and not equally building and developing our capabilities for the future, this building capabilities and capacities  begins to makes up our future organizational  capital.

So what does makes up our innovation capital and why is it important to know?

Should we care, does it matter? I would argue it does, increasingly so. Within the innovation capital lies the future of the organization and holds one of the real golden keys to the sustaining performance of the company, or not.

The generally accepted view is that Innovation boosts a company’s earnings, speeds growth, ensures an advantage over competitors, and greatly appeals to shareholders. Put another way, businesses that deliver earnings growth based on a continuous stream of new products and services and new ways of doing business capture the innovation premium.

So tell me, why are we seemingly so bad at identifying what actually makes up our innovation capital, apart from some sweeping generalized statements attached in the accompanying comments within the financial result statements?

We need to find a way to unlock this as we are constantly being pushed for new business models that create, deliver and capture value. It is in  the entire make up, the value structure around the offering, and this is made up of distinct capitals that drive the new business towards success.

Do you really want to discover what makes up your innovation capital? Then why not talk to me and begin a journey that builds a far better sustaining future where growth and value creation become far more realizable.

The post Understanding Your Innovation Capital- Well Do You? first appeared on Building Your Innovation & Ecosystem Intelligence.

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

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

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

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

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

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

Stocks and flows need equal attention to build innovation capital

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

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

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

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

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

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

So the article “Want to Win at Business Model Innovation? Put these Four Pillars in Place” was written by Rick Waldron, ex Nike, and Intel.

He grabbed my attention with this comment early on in the article:

“ Little attention has been paid to the architecture required to stand up a sustainable, impactful new business innovation capability. Those of us battling it out in the trenches are left to learn the hard way”

I so very much relate to this central recognition that most organizations lack a solid, well thought through innovation architecture, it is one of the real reasons innovation is constantly under-delivering.

Rick points out:“Corporate innovation efforts by and large continue to fall far short of moving the needle in any significant, sustained way or of delivering on the promise of future-proofing companies against ever-increasing disruptive forces.

While a growing number of companies have begun to find some success in implementing design-centered thinking, lean innovation techniques, jobs-to-be-done analysis, and empowering employees to solve customer and internal process problems, much of the focus has been on supporting current business models – i.e., on incremental rather than game-changing innovation. But this work is merely the table stakes for staying in the current game”

The view offered in this article suggests four pillars to be put into place: 1) A Committed and Engaged Leadership, 2) A Comprehensive Innovation Strategy, 3) A Sustained Mindset Shift and 4) A Comprehensive Tool Kit.

Rick’s article just gave me the chance to go back and review my thoughts and relate his excellent suggestions and thinking into some of the work I have written about in this area. So I wanted to link them up a little more in my mind on some diverse and previous thoughts that I have written about and hopefully link them far more into yours and this article of Rick’s.

Reflecting and Validating

I’m not sure how many countless articles I have written over each of these pillars, it seems far too many and also I have attempted to offer some different solutions in frameworks and models to underpin these thoughts.

I was exchanging with Rick since this article and offered up some of my opening thoughts back to him, ideally with the intent to have an ongoing conversation that builds even further on his observations and suggestions. So then I thought, well let me put these into a post that links these a little more. We seem to hold similar views on the critical places to focus for building greater innovation capability and reflect on many of the same underlying problems that inhibit innovation. I value Rick’s different experience perspective, it freshens up my thinking.

Some of my links and references are here if you find the time and opportunity to delve a little deeper into my views.

So taking Rick’s four pillars as the shape of this post.

Achieving a Committed & Engaged Leadership

I have suggested an Executive Innovation Work Mat as a frame to organize around. It is a concept to help in the Architecture design, especially as part of its framing solution is attempting a cascading model both up and down organizations

http://box2077.temp.domains/~paulfoui/2012/09/16/the-overarching-proposition-for-the-executive-innovation-work-mat/

I did like his observation that “where that leadership commitment and acumen does not exist, the task at hand is to develop it”

For me, this is building a compelling business case for fully integrating innovation into the core of the business.

http://box2077.temp.domains/~paulfoui/2016/09/01/making-a-compelling-business-case-for-an-integrated-innovation-framework/

Establishing a Comprehensive Innovation Strategy

The linkage between strategy and innovation is one of being absolutely essential. A couple of my thoughts that underpin this suggested pillar link into his views

Rick made this telling remark “Without an innovation strategy, innovation improvement efforts can become a grab bag of much-touted best practices: dividing R&D into decentralized autonomous teams, spawning internal entrepreneurial ventures, setting up corporate venture-capital arms, pursuing external alliances, embracing open innovation and crowdsourcing, collaborating with customers, and implementing rapid prototyping”

http://box2077.temp.domains/~paulfoui/2017/06/27/the-essential-connection-between-strategy-and-innovation/

Rick made this absolutely sound observation: “The corporate strategy team should have the access and skills required to support senior leadership in identifying and articulating priorities, resourcing commitments, boundaries, strategic hunting zones, and definitions of success. The innovation team, in turn, can serve as an “applied strategy” tool for the strategy team, helping them refine and build confidence in the strategy through rapid, low-cost, in-market experiments around new potential business platforms, customer solutions, and operating models. That enables both teams to do what they do best and create a symbiotic relationship”

http://box2077.temp.domains/~paulfoui/2015/02/08/one-really-big-issue-is-aligning-strategy-and-innovation-right/

Sustained Mindset Shift

Rick offered this great insight: “The more transformational the innovation strategy, the further a company will be stepping into uncertain, unpredictable territory. You are revealing and creating the future, rather than planning for it. This requires an important leadership mindset shift from operator/manager to investor/entrepreneur”

In thinking more out in the future through the focus on the 3 Horizons framework for different necessary ‘voices’ to gather around innovation. I like Rick’s emphasis on mindset shifts whereas I had taken more the voices within a Boardroom or any discussion around innovation.

http://box2077.temp.domains/~paulfoui/2015/04/04/drawing-out-the-different-voices-within-the-three-horizon-methodology-for-innovation/

These three voices that must all be engaged in a conversation should have the voice of today, the incumbent, the manager(s) responsible for delivering today’s result. Then you have the second voice, the voice of the entrepreneur, the one eager to experiment, try out new things, wanting to push further. Lastly, we have the third voice, the voice of the aspirant, who sees a different future. Today, more than ever we have this real need to look towards the future

I did like his much stronger view of “engineering a mindset shift” and his offering up a suggested way to institutionalize it.

Comprehensive Tool Kit

We so often see that organizations never seem able to bring together and openly share a full set of capabilities to build the innovation capacity to allow innovators to do a more comprehensive job of innovating.

Rick asks the question here of “where the business model innovation at hand is best served by a build, buy, partner or invest approach. It’s also important to realize that the answer to that might change over time, as the work moves from early-stage exploration to establishing a market beachhead, to grow market share, to achieving scale. This, in turn, will guide the team in identifying (and even creating) the innovation and corporate development tools that are best for the task at hand”…  I like this line of questioning in building out a growing understanding of what is needed to go and find out about and also to then build.

I have been attempting to build up a growing set of explanations to different innovation tools

http://box2077.temp.domains/~paulfoui/2017/08/19/exploring-frameworks-and-methods-you-need-to-know-as-an-innovator/

Then reflecting on a range of top or most popular tools related to innovation

http://box2077.temp.domains/~paulfoui/2016/01/14/sorting-through-our-innovation-management-tools/

The need for an effective innovation architecture

It was the lack of attention to the innovation architecture that draws me into Rick’s article. I have attempted to explore this in different ways, he helped me pull this together with a little more in my thinking and reinforce where I need to focus a part of my efforts.

I worked some time back was on the different approaches to innovation and within this was the Innovation Business Architecture in an outlined model to explore. http://cirf.pbworks.com/w/page/38930046/Innovation%20Business%20Architecture

The Business model canvas has been disappointing as it has not been evolving.

In recent years the BMC has not evolved and reflected enough in the massive changes undergoing, reflecting the move from Business model products into Business Model platforms and the greater need for ecosystems and collaborations. These multi- interrelated business models are coming together to build more compelling solutions. The BMC has focused on supporting and reinforcing single entity product innovation and is not adapting the changes taking place in considering different business model options.

I have have spent a lot of time on the BMI in past years and found the canvas a great leap forward in our framing and articulating the business models but have become a little disillusioned in recent years, as it seemed to me the main inventors and proponents of the BMC have not evolved it, as technology and platforms have taken a stronger hold on business solutions. There has been a consistent “push” on the customer side, yet there seemed to have been less emphasis, or even ignored or understated, on the back-end, the Business Model Architecture. Perhaps this area has been conceeded for development to others? I wonder if the BMC become stuck in this one ‘great’ idea for a single company dealing in their product offering?

Business model assessment does need to reflect the changes taking place, based around platforms and ecosystems of businesses and customers combining, a radically different Architecture, to find and offer more complex and comprehensive solutions, built through technology and greater collaborations and exchanges. We need greater understanding of the new tools the digital age offers to challenge our existing business models.

I felt the back-end very underdeveloped in guidance as I wrote here

http://box2077.temp.domains/~paulfoui/2013/06/26/the-understated-back-end-of-the-business-model-canvas/

This started my questioning of the Business model, back in 2013. I looked harder at the Value part of the Business model, for example in a few posts around about then

http://box2077.temp.domains/~paulfoui/2013/07/05/the-age-of-large-business-model-reinvention/

http://box2077.temp.domains/~paulfoui/2014/03/09/knowing-the-value-within-your-business-model-is-vital/

This questioning of present approaches to Business model innovation has brought me back to the very point Rick has raised.

“ Little attention has been paid to the architecture required to stand up a sustainable, impactful new business innovation capability”

I think we are entering a New Innovation Era

Structuring the design of the innovation architecture is changing, fairly radically, in my view. It still will be based on the four pillars suggested in Rick’s article:  1) Committed and Engaged Leadership, 2) Comprehensive Innovation Strategy, 3) Sustained Mindset Shift and 4) Comprehensive Tool Kit that will be built out on a far more dynamic foundation, with technology and network effects as critical within any future design, not single entity and product design.

So I think it will be fundamentally different in this architecture that underpins these four pillars. In my opinion, it needs to be based on the thinking around the shift from products to platform solutions, from transactions to building far more value-adding ongoing relationships, from a supplier of product services into highly valued network partnerships, exploring innovation across all options. Instead of delivering on discrete elements; this requires managing the whole ecosystem of the innovation design differently, through technology where platforms dominate, and transformation becomes an ongoing process to evolve the business model, so as to seek out constantly changing market opportunities, in agile, adaptive and fluid ways, for successful innovation outcomes, that meet those real customer needs. This will increasingly be within ecosystems of collaborators.

I’ve written about this under the tag “New Innovation Era” on this site fairly extensively in the past year, the latest being this:

http://box2077.temp.domains/~paulfoui/2017/09/15/jumping-to-a-fresh-cycle-of-innovation-design/

I think within this article of Rick’s he nicely sums up our overarching need.

“It’s an understatement to say that writing a transformative next chapter for an established enterprise is hard. To increase the odds of success, one must begin with an effective innovation architecture consisting of committed, engaged leadership; a thorough and clear innovation strategy; a sustainable investor/entrepreneurial mindset; and a broad suite of innovation and corporate development tools”

I agree with his observation and many practical thoughts and suggestions. We are in urgent need to build a clear innovation architecture as we do need this new business innovation capability. We are entering a different innovation era and if we don’t pay specific attention to the architecture of innovation we will not have a bright future, we will increasingly fall behind those that do get the need for serious investment in building innovation capability and capacity.

A link to Rick’s article again is here. I hope it inspires you as much as it did me, in our need to keep building innovation capabilities.

*Some amendments were made on 7th November,2017

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The post Building upon the four essential pillars for innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

That part of the day spent on innovation, researching and reading, tends to partly stimulate my week ahead in different ways, as I try to reinforce what I’ve learned by applying this to the work gathered around me at that point in time. I am looking to see how it does help shape and influence it, it ‘fuels’ the coming-in week in some part. Of course, this greatly depends on what I am working on, for others and, for myself. Some weeks I just don’t find the opportunity to apply it, so that “Sunday thinking” sits there for another day or week, or even months before I revisit it or connect it back up.

What started me on a given innovation “tack” was that for a long time I have seen an awful lot of opinions, solutions, concepts, that have been breaking down innovation into its many parts. The practice of lean thinking, design thinking, visual thinking has increasingly started to dominate our “innovation thinking.” We keep breaking down innovation into its parts, we continue to fail to build this back up into a whole system approach, simply because we don’t understand the whole innovation system and how it all interconnects. We, in general, all seem to remain constantly disappointed at the end results of our innovation efforts. In some ways, all this new learning or applying novel solutions that we are adapting to the different parts are often just triggering knock-on consequences that still consign innovation outcomes as a failure. It must continue to frustrate each of us, if the final outcomes, if out of our hands, end up as disappointing even though we all feel we are making progress in improving innovation. We must think differently and that might mean whole innovation system thinking.

We, in general, all seem to remain constantly disappointed at the end results of our innovation efforts. In some ways, all this new learning, or applying novel solutions that we are adapting to the different parts, are often just triggering knock-on consequences that still consign innovation outcomes as a failure. It must continue to frustrate each of us, if the final outcomes, often out of our hands, end up as disappointing, even though we all feel we are making progress in improving innovation. We must think differently and that might mean whole innovation system thinking.

Going back and reminding myself

So this Sunday I went back to a range of concepts that all have a critical impact on the innovation process, ones that many of the present popular thinking parts only trigger, a specific part of the innovation system for incremental improvement, even if it is dramatic for one person or a team exposed to it. It so often does not yield the impact we require from innovation; successful outcomes that accelerate growth or make for substantial change.

So where was I going this Sunday morning? These have included (eye-roll please) the dynamics capabilities within the innovation system, where the work of David Teece, for example, is exploring the theory. I know wretched theory on a Sunday or any day come to think of it, but it does inform.

Teece’s concept of dynamic capabilities is a theory about the source of corporate agility: the capacity (1) to sense and shape opportunities and threats, (2) to seize opportunities by mobilizing your resources to capture new value from those opportunities, and (3) to maintain competitiveness through enhancing, combining, protecting, and, when necessary, re-configuring the business enterprise’s intangible and tangible assets, by transforming them for continuous renewal. This makes organizations dynamic. It is the dynamics of the innovation system that can make it transformational.

 Then I went into System Thinking.

Our quest should be finding answers to why innovation is often failing to deliver on our expectations and needs. So for me “System thinking for Innovation, as a whole” should be grabbing more of our attention. Yet we seem not to get our heads around this “whole” part so we set about redesigning the parts. Nothing wrong with that, it has lots of moving, sometimes unique parts, improvements are certainly happening, replacing past approaches but they still remain discreet parts but overall innovation performance, does it improve?

System thinking looks at ALL the interacting parts, their interdependence and how one part fits and reacts with another. We get caught up in the linear progression of one part and not considering enough the reinforcing loops or balancing the loops to foster stability or understand impact across the wider system. Actually, we are potentially increasing its complexity and volatility, pushing this down the line, to somewhere that is not capable of absorbing this “great piece of thinking” and translating it into the outcome expected, even when we did the initial work or visualizing. We always need to translate what we do, for others to pick up with and turn this into something better.

If we don’t have a well-understood view of the whole system of the innovation design, it does not matter how many separate parts we design or apply, the end result is this either ends up the same (disappointing), poorer, as it replaces something we failed to improve what was existing from the end-users perspective, or managed some increased ‘spike’ that needs constantly improving upon to get finally right. Constant improvement often makes up much of a business, as it continually improves on its offering, especially as technology is continually changing, allowing us to apply what we are learning and as we plug into the feedback we are getting from the market but these reinforce the incremental improvements not change the market or product dynamics as much as we often want

Then we have system imbalance to contend with in innovation.

So we have plenty of dynamics and system thinking improvements, so why do we need to spoil a perfectly good Sunday looking deeper and questioning? Well, it’s all about system imbalance. System imbalance? Yes, a system imbalance in what we are doing in our innovation work.We come back to the point until we connect up the whole innovation system we are just pushing our piece of efficiency into someone else’s in-efficiency, as we have not integrated or interconnected the whole, we just have compounded more independent parts.Pushed more work (or rework) off to somewhere else. It continually keeps innovation as inefficient and less effective. Everything should be connected, all the subsystems should connect.

Today we have systems for design, ideas, portfolio management, for research, for evaluation, for pipeline management, all operating in their ‘silo’ of activity. If we fail to understand the relationships and the connections between them all we are having a real difficulty to optimise the whole innovation system. Our focus should become far more focused on achieving better interconnection and interdependence.

Then as the Gym beckons, I start picking up on System Dynamics

So system thinking needs a greater area of our focus within the innovation system. We need to understand reoccurring patterns that constrain us. This begins to take we into System Dynamics. Do you remember the brilliant book of Peter Senge: The Fifth Discipline: The Art and Practice of the Learning Organization”. This book needs dusting down, searching out, purchasing as essential reading, as it gives us some more clues on System thinking as many of our problems are reoccurring ones. It might become a way to understand the reasons we lack an interconnected innovation system.

Just take a look, step back, before you have opened that special bottle of wine for Sunday or you go off and do what all sane people should be doing on a sunny Sunday, getting out and enjoying the day. I’m heading out the door mighty soon after this ‘outpouring’ but I’m asking you to think about all those reoccurring bad patterns we have fallen into, around innovation

Take a look at the eight system archetypes, outlined here by Jorge Taborga in a piece on system archetypes and their application.

Eight systems archetypes and their storylines

The eight, most common systems archetypes are: 

1. Fixes that Fail—A solution is rapidly implemented to address the symptoms of an urgent problem. This quick fix sets into motion unintended consequences that are not evident at first but end-up adding to the symptoms.
2. Shifting the Burden—A problem symptom is addressed by a short-term and a fundamental solution.  The short-term solution produces side effects affecting the fundamental solution.  As this occurs, the system’s attention shifts to the short-term solution or to the side effects.
3. Limits to Success—A given effort initially generates positive performance.  However, over time the effort reaches a constraint that slows down the overall performance no matter how much energy is applied.
4. Drifting Goals—As a gap between goal and actual performance is realized, the conscious decision is to lower the goal.  The effect of this decision is a gradual decline in the system performance.
5. Growth and Underinvestment—Growth approaches a limit potentially avoidable with investments in capacity.  However, a decision is made to not invest resulting in performance degradation which results in the decline in demand validating the decision not to invest.
6. Success to the Successful—Two or more efforts compete for the same finite resources.  The more successful effort gets a disproportionately larger allocation of the resources to the detriment of the others.
7. Escalation—Parties take mutually threatening actions which escalate their retaliation attempting to “one-up” each other.
8. The tragedy of the Commons—Multiple parties enjoying the benefits of a common resource do not pay attention to the effects they are having on the common resource.  Eventually, this resource is exhausted resulting in the shutdown of the activities of all parties in the system.

Now apply these to why innovation often fails, they constrain what we do. We get unwanted results due to a specific set of behaviors. If we start looking through these archetypes as lenses we might begin to ‘flesh out’ the needs to think through when we look at a whole system design for innovation. We are testing what we do, to see if it passes through this lens. If we can change individual behavior and keep coming back to improving the ‘whole’ design needed for innovation we do get to connect it all up.

So my Sunday morning: has it been well spent or not?

In this limited time I had on this Sunday, I have triggered my thinking into Dynamics of Innovation, System Thinking, System Dynamics and System Archetypes and recognizing we have to look for more interaction and interdependence within any innovation work we do. We need to take our innovation activities out, recognizing consequences and attempting to manage the whole design.

So where does that take me or innovation? Firstly, I’m off to the Gym, I think I need to work off a few more pounds of newly gained brain ‘fat’ in my (limited) understanding. I need to deepen my thinking around all these areas as I know, no actually I am convinced until we map the whole innovation system, we are just moving the pieces around and I just can’t see this as optimizing it, it is simply making innovation more complex and disappointing. It does not need to be.

Complex adaptive systems relate to innovation, are yet another story that I attempted some time back to quantify, actually back in 2012 and, yes, it still sits here in my pile of things to connect up as part of this integrated system we require for innovation

Now back to a more normal Sunday…….

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The post Innovation System Thinking on a Sunday! What, no roast or glass of wine? Later. first appeared on Building Your Innovation & Ecosystem Intelligence.

A collaboration is being mooted between us but until there is a point of common understanding much stays under partial wraps until we both get to a more comfortable point, where we feel it can go for us but it certainly triggered this post as a starter.

The thinking hinges around the state of innovation today, how it is fragmenting in  a myraid of parts, all seemingly contributing; yet it seems learning has been replaced by personalized experience and the chase for individual knowledge. Mostly this does not get embedded back in the company, the ones who are paying for this exposure.

I was wondering if there was a decent ‘return on investment’ being made by the company or was it just being front-loaded on the individual, so they gain and then can take that understanding elsewhere, or simply set up their own shop of ‘innovation expertise’. The ROI and the Return on Learning seemed to be mostly heading out of the door, leaving the organization that made the investment, devoid of a return.

My feeling is this should change and we firstly establish a “System of Record” for innovation that brings the individual learning into a collective one, a “system of collective engagement” that enables all within the system to gain from and design innovation solutions, from a more ‘whole’ system thinking perspective, that gives innovation sustaining power connecting the individual to the organizations needs.

To get to any change point and simply not go with the flows or is it stocks (?) of lots more practicing and advising on specific innovation concepts, we needed some greater system thinking to be applied here. If we don’t look at the ‘whole,’ all we might be doing by adding more and more innovation experiences is simply layering on limited perspectives and simply sending it even more into a fragmented market of innovation consulting, one of “atoms and bits” that never combine into delivering innovation differently.

I recall a piece by Rick Karlgaard of Forbes entitled “Atoms versus Bits: where to find Innovation as we increasingly need to find answers on not whether you mean innovation in the world of atoms (physical things) or innovation in the world of bits (software). We need to combine them.

In the article he was suggesting ‘Atoms’ are slowing as the pace of improvement has become more incremental but the ‘Bits’ are accelerating like crazy. We have been locked in a world of not transitioning, we are working out how the “bits” are changing the way we are using our “atoms” or things (transport, reading, listening to music) but trying to apply old practices and systems to work this through.

It is from my perspective we have not redesigned innovation away from these ‘physical atoms’ into the ‘speed of bits’ or found better, more sustaining ways, in our the ability to combine them into the world of the really new and really different. Some have achieved the combination effect but many are not, simply stuck in a ‘given’ world. I just think we need to think differently about the whole innovation system to release a new dynamism for innovating.

Innovation really does require system thinking

My potential collaborator is steeped in systems thinking and change learning and this is where any rethinking can take place, to pull back from (my view) this rapidly fragmenting market in innovation advice still caught in product outcomes and repurpose it back us back into a whole picture understanding and the corporate need to bring out both the atoms and bits that make up innovation and combine all the parts of learning.

So to begin with,  I have begun my searching back into my collection of files on system thinking, complex adaptive thinking, the changing way we are all learning, the incredible value of technology in collecting data and then translating it, etc., etc.

I remembered one post I wrote some while back, to remind me on recognizing there are many parts to any journey that requires a fresh change of perspective.

There is a growing need for having some dynamic tension within the innovation system; this helps generate the better conditions for innovation to thrive. We are learning more on the better tools, techniques, and approaches available but here are some general thoughts to put some opening stakes in the ground for my (our) future thinking around.

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 quickly 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 life. 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.

7). 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

8). Knowing your innovation ‘stock’ and  ‘capital’ potential

We need to know our ‘innovation stock’, a large part of our wealth generating capital and where it can be best put to use. We are valuing the knowledge perspective far more and with this, we are increasingly recognizing the importance of the intellectual capital that makes up the organization.

We need to ‘master’ our understanding of the skills, processes, routines, organizational structure, and disciplines that enable firms to build, employ and orchestrate innovation as this is increasingly needed for participating in more complex open collaboration efforts. To achieve this, we first need to know ourselves and our capacity to innovate, both the strengths and weaknesses.

9). The ability to map the landscape for making increased inquiry

This landscaping for me is one of the exciting outputs we can get from gathering data, from understanding all the sources of activity, of harnessing our learning experiences and then translating those into a form of inquiry to then build from.

Outcome delivery: Coherence in purpose & consistency is what we all desire that organizations are presently lacking in innovation

It is accepted wisdom in today’s environment, enterprises cannot design and impose from the top down, it stifles far too much and limits creativity. Strategies do not only emerge from the whole but from the sum of all the parts and it is the diversity of the parts gives the ‘richness’ to innovation. It is the ‘combination effect’.

It is the embedding of these that build the eventual innovation design of a ‘whole’ innovation system

It is drawing together all the ‘bits and pieces’ into the whole. It is ensuring all the ‘collective experiences’ are captured and put to work, not just for the individual exposed and learning from all the great innovative thinking going on ‘out there in organization that the individuals are working for, so we need to ensure their personalised learning is put to ‘collective productive use’ for giving real returns on investment and learning and it is this constant input puts the dynamic back into innovation for the organization they work for.

Within an organization we seek to have coherence in purpose and through this a consistency in behaviour. Innovation needs that collective behaviour as well, it needs to be dynamic, constantly evolving, explring and experiementing and we must design it into our innovation experiences, so we can achieve a more collective tension that continues to improve the total design of the system, not just its parts.

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

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

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

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

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

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

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

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

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

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

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

Arriving at a clear point of view

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

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

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

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

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

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

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

I felt it was time to make a restatement.

Let me restate what I am focusing upon here, in this work and why it has a separate, dedicated website to allow me to evolve and share in this discovery and thinking through journey.

So my hypothesis, hopefully covered off in this initial explanation is made on the basis of growing research and evidence, as an investigative point for further work-to-be-done in thinking and constructing around the plotting or mapping out specific innovation landscapes that deliver the innovation capabilities needed.

This work is now at a point it needs additional help to take this out further in a testing and experimental environment and I am looking for one or more ‘willing’ organizations to be the pilot for this to validate and further improve from the learning.

The Challenge I’m trying to Solve

Knowing what are the critical factors for innovation and their dependence for sustaining innovation success are becoming a vital necessity to understand so an organization can place the appropriate resources behind them. The question is, which are critical, which naturally occur when others begin to be put into place, which seem to have limited or no real effect on changing the dynamics of innovation?

Knowing these and having these clearer shown as a ‘return on impact/investment’ (ROII) has real business value. Today, we lack a clear system model that brings the critical innovation factors out and gives them their appropriate values, and then can equally provide the ability to model different future states and conceive future scenarios through different impact-investments.

We need to recognize Resources are scarce and need constant renewal

We still don’t understand the ‘dynamics’ of innovation, the interdependency of the parts. Which parts have greater impact, which are not so important? Innovation is still not treated company-wide in a holistic way as recognition of the dependencies is poorly understood. This is what needs to change.

What and where do you place your resources to gain greater impact? What is important to recognize as needing additional ‘weight and focus’, what capability and competencies need to have a stronger emphasis and why? How can we identify these, make the innovation process more dynamic yet these embed constantly as routines? What would happen if we ignore certain innovation aspects, what would give greater impact to our business?

Why do I think Fitness Landscapes will help?

The pressing need for a firm is to integrate, build and reconfigure internal and external competencies/ capabilities to address rapidly changing environments and its ability to achieve new, more innovative forms in market position.

This calls for more ‘dynamic capability” to be achieved, to be available and constantly being built up as they are in flux and change. The basic question that needs to be addressed is “what is our dynamic capabilities and more importantly which critical ones should we focus upon to improve our capabilities and competences to innovate?”

The solution I am looking for offers Innovation Fitness landscapes by provide the understanding of the existing position and ‘point towards’ where to place your resource to improve your innovative capacity to adjust and deliver the capabilities and capacities to meet the challenges on hand. Equally to project and forecast the gaps needing solutions to bridge.

Fitness Landscapes as a solution has its roots in Darwin.

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

Mapping out innovation capabilities and capacities

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

These critical factors that are identified 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, and the number of critical peaks shows how diverse it potentially is to have resolved as contributing factors.
The ability to identifying the emerging patterns provides the need to act and invest, you begin to make adaptive walks, so as to move you to the higher fitness points where innovation viability is enhanced and understanding is needed to be in place so as to resolve the challenges faced. Greater fitness equates to more value creation potential. The ability to inter-couple landscape entities and exploit individual interactions alters your dynamics to innovate and improve repeatable cycle times and provides for increasing options to explore.

Moving towards a solution

I want to take this (pioneering) work out for testing and experimenting, to calibrate its framework so it delivers a strong rigor and validation to take out and scale further.  This is why I believe I am at a point of needing some invested time by a client or two to work on this with me in this testing, validation environment.

The solution is a framework that shows promise but it needs to go further from theory into practice. What are the mutual dependencies, how the innovation ‘system’ behaves, what are its more important impact factors which are weaker and what should be considered in the ‘best’ innovation environment?

The key is to know what are those capability points that are dynamic and highly relevant to the delivery of innovation, and dampening down the ones that are less so. A greater innovation fitness equates to more value creation potential as clear distinctive capabilities emerge as points of greater value, these are the dynamic points of your innovation need.

The post Restating the Value Proposition of Innovation Fitness first appeared on Building Your Innovation & Ecosystem Intelligence.

Our businesses are measured constantly on their financials, we produce a constant flow of reporting documents that provide useful insight and allow for a more informed judgement by present and future investors on the health of the company.

We are ‘wedded’ to our financials and ignore the real value within our organizations of all the other critical capitals that generate and strengthen the business, yet these are the MOST valuable to leverage.

What if that same person came to you and asked instead: “what makes up the innovation capital of the company?’” could you answer this as clearly as the financial one?  I would suggest most probably not. (By the way, if you feel you can then please let me know I would be more than interested).

We are focusing far too often on past performance and not future generating potential. We constrain ourselves, our growth and our potential by staying fixated on just the financials, constantly worried over the short-term results and not equally building and developing our capabilities for the future, this building capabilities and capacities  begins to makes up our future organizational  capital.

So what does makes up our innovation capital and why is it important to know?

Should we care, does it matter? I would argue it does, increasingly so. Within the innovation capital lies the future of the organization and holds one of the real golden keys to the sustaining performance of the company, or not.

The generally accepted view is that Innovation boosts a company’s earnings, speeds growth, ensures an advantage over competitors, and greatly appeals to shareholders. Put another way, businesses that deliver earnings growth based on a continuous stream of new products and services and new ways of doing business capture the innovation premium.

So tell me, why are we seemingly so bad at identifying what actually makes up our innovation capital, apart from some sweeping generalized statements attached in the accompanying comments within the financial result statements?

We need to find a way to unlock this as we are constantly being pushed for new business models that create, deliver and capture value. It is in  the entire make up, the value structure around the offering, and this is made up of distinct capitals that drive the new business towards success.

Do you really want to discover what makes up your innovation capital? Then why not talk to me and begin a journey that builds a far better sustaining future where growth and value creation become far more realizable.

The post Understanding Your Innovation Capital- Well Do You? first appeared on Building Your Innovation & Ecosystem Intelligence.