I have often been returning to scaling, struggling with finding the best answers. Many organizations struggle with scaling. This can be scaling their organization, their capabilities or more often, taking an idea into a fully scaled delivery.

Maybe I have been looking at it all wrong?

The complexities of scaling can’t be lightly dismissed. You need very often, size to scale. This could be in a new plant, in where production should be situated, so it can be allowed to scale at a later date, in resources able to achieve scale or more importantly you scale according to the type of goods or demand so they can be readily available, closer to the market they are needed.

When you work in a global organization, scale takes on even greater set of dimensions, one that needs coordinating and managing.

So I was thinking through some points on scaling a little differently. They are partly ‘open questions’ or some thinking out loud. You can say they are “half-baked”, perhaps in more than one way!

Can we make scaling up more systematic? I know that a good colleague and friend of mine, Ralph-Christian Ohr spends significant time on this to crack. He is a joint facilitator to “Scaling-up: From Corporate Startup to Business Impact” along with Frank Mattes. You can follow their work over on innovation-3,  where they help companies to set the Scaling-Up of a fully validated innovation concept up for success.

I am thinking scale differently here, So let me explore this, it is only emerging for me. I have found much on scaling-up as specific to a certain point of need, such as a startup to a new business outcome. Can we think of scaling-up differently?

So a series of questions first.

Are we placing the emphasis of “scaling-up” too far down the delivery chain? Should “scaling” be broken down and modernized? Can we scale-up firstly in the digital world and then take this into the physical world. I am questioning scaling-up and much of this might be simply mumble jumble or is it? So some of my opening thoughts and I will also want to come back to this at a later time.

When we decide to scale

As we scale and become more outward in chasing global trade, issues move from being simply complicated to be far more complex. Past experience can be enough to assist complicated but complex becomes more problematical as it is ambiguous, uncertain and presents a uniqueness in its challenges. Scaling-up does have the potential of opening up new places to play, or the dark holes many of us often fall down into. Getting scaling right is hard and having it available at the right time even harder. How can we reverse engineer scaling up to reduce complexity?

This growing uncertainty we face in the world that has become (overly) reliant on the continuance of open borders, will add to our scaling up dilemmas. We are seeing risk management become increasingly important in any assessment on where, how and why we need to scale-up and more importantly when. This growing complexity to manage is increasingly moving organizations towards the very traits innovation also requires. Those of dealing with greater ambiguity, of building in the needs of agility, higher levels of flexibility, curiosity and the willingness to explore and experiment, and take increasing risk.

Dealing in agility

For many, it is a very uncomfortable place to go, when they have invested millions in their supply chain. They naturally want to channel everything into their supply chain to optimize and utilize it. They have obtained high levels of visibility but in this pursuit of optimization traded off many levels of flexibility. Supply chains have become reliant on high levels of predictability. This reliability has been working well for the established organization, set up to extract maximum efficiency and effectiveness out of the investments they have made in predictable markets. Careers have been made previously on stability, exploitation, and extraction, not risk and exploration. Yet, what if this changes? Scale will be dealt with differently if unpredictable conditions come towards us.

Yet, as markets become increasingly uncertain, new competitors entering the markets with very different ways that they see the supply chain and delivering their solutions, will be better positioned to leverage on a more volatile set of market conditions. Emphasizing delivering on customer needs will be placing uncertainty back into the previously honed supply chain model or production model of many companies stuck in the old model of generating demand for their solutions, not those of the marketplace. The risk of being highly scaled is fast becoming a point of disruption for others. Scaling up needs a different lens than in the past perhaps.

The shedding of legacy can equally liberate innovation

Legacy, leadership, cultures, and processes, are inherited from the past industrial economy of standalone businesses, where the scale was achieved through mass production, tailored to the producer’s needs, of providing products that worked but not necessarily in alignment to the customer’s needs. That was fine when you had a limited choice available. There is a shift going on today.  Supply is exceeding demand and demand has simply become that, demanding. That is reversing part of the thinking towards scaling up, the consumer expects and demands a solution to their own specific problems, and organizations have to adjust accordingly.  This is where innovation comes into play. Supply has become more tailored and focused. It needs to be more agile and flexible. It is being forced back in the production process to meet rapidly changing demand. The scale has to respond accordingly.

To get supply closer to demand, you need to be closer to your ultimate consumer, in the market and through a more personalized, focused dialogue to shorten “the response to change,” to keep in pace with customer requirements. In many ways we need to scale-up understanding, the front end of innovation, drawing in the knowledge and insights quickly enough and then process these at speed to keep pace. Today scaling-up has a different point of resource emphasis, it is not so defined as the end point but more as “adaptive” scaling, at the appropriate point of need. We are shifting from applying standardization and searching for increasing flexibility. Scaling needs a more modular set of solutions.

So standardization is giving way to customization. Large-scale product runs are being adapted to meet more specific opportunities; response rates and customer engagement are being hugely advanced by technology and constant exploring the full customer journey with data and analytics helping the understanding. Hierarchy and delegation are flattening out and seeking engagement. The whole doing and thinking, is based far more on this dependency on growing real-time feedback and ongoing knowledge flows. Digital application throughout the organization to speed up understanding and provide visibility, where ever it is needed to shorten ‘response’ time.

The changes we are undergoing play towards innovation outcomes seen differently

Strategy today, is far more on grasping the essence of a constantly changing situation and equally on anticipating the future. It is forward looking not backward filled. A primary goal of growth requires innovation to be the catalyst to create the future. For this to happen we do need to recognize that innovation must become a greater instrument of strategy, far more central or core, in organization application and understanding. It is the best means of gaining a strategic advantage and often the basis of survival in how innovation creates, leading to new growth and profits.

So by us recognizing innovation as the means of gaining an advantage, we need to think more creatively on where and how we scale.

Unfortunately, innovation is primarily made up on “Knowns and Unknowns in Innovation: Let’s Manage Them Differently and much of the innovator’s job is to make these “known” as soon as possible. Any plan of future actions needs to be designed in different ways. We need more modular thinking and this is where scaling can be achieved differently. We are seeking emergence; this is the key.

Today we are struggling due to these legacies. We are attempting to scale out, often on a current path of decline, or organizational design; one that is too rigid, and static, and we chose to ignore many warning signals as the understanding is not well connected up. The route to new scaling needs to be built on a fluid design, dynamic and based on constant discovery so we can be in this ’emergent mode’ as quickly as we can, to translate this.

The value of the digital twin may offer some resolution to scaling up (of everything)?

The smaller the component to build, the quicker you can scale it and optimize it. In the age of the digital twin, we can build the virtual product by specifying and validating it, we can prototype it for increase verification and greater digital/physical engagement and interaction. Then we can go into a virtual production to simulate, to map product concepts out, to validate and begin to commission and structure the physical as you can provide better understanding, structure, and behavior your innovation concept will have increasingly “down the innovation concept/validation” process.

We are moving the front-end of design into a virtual one, more and more, to enable products and then eventual production to simulate, test and optimize concepts in a virtual world before it enters the real world. As we work in this digital twin world we continually gain new insights from concept designs, from customer feedback and then when it does enter the real physical world there is a well-established continuous loop of improvement.

We can design production, facilities and a host of other things through digital twins. I wrote “have you got your digital twin strategy sorted out yet? This thinking more holistically about how and where digital twins can be applied does make a significant contribution to thinking “scaling-up” accordingly in very digitally connected ways.

Scaling up comes from focusing on real points of value, these being optimizing, enhancing, digitalizing and streamlining, on a continuous basis and digital process design, might do this well. It is for me, the combinations we can achieve from engineering the innovation value chain through connectivity, through increasing intelligence and feedback, and by constantly validating this, by automating this innovation process of design in this digital (virtual) world, as well as in its physical one.

We need to build more into our front end to model different scenario’s so we can “scale” and ask “what if?” accordingly. We are surely building designs that by going through this digital /physical process that gives us flexible, are scalable and upgradable as the designs evolve. We then adapt our scale as we validate.

As put forward by some of the suppliers of PLM software, we do need to think far more about Product Innovation Platforms that offer enterprise-wide foundations to build and design the concept, to scaled out the solution. To achieve this we do need to creatively think where a digital twin can play their part, recognizing the digital thread that is occurring in all our future innovation activity. Going fully Digital offers us an evolutionary path if we choose to take it. It connects much more than we have connected today.

We must recognize “just” physical assets are actually less important, they are becoming increasingly dependant on digital being part of their offering, an increasingly valuable part, as more of our solution components are software related. It is in the software we have the potential to scale out in different ways, less in the physical assets that house them. The value of software giving outcomes and insights is increasing the value of the assets. The physical assets are the delivery mechanism, the host, and it is the value “extracted” from data that is rapidly giving the “return on investments”. So what should we be thinking about to “scale-up?”

Many “stand-alone” manufacturers would gain by considering platforms and joining forces in ecosystems that can design and share more complex solutions. This allows for a shared scaling up design. This fresh thinking of ecosystem design gives different scope, architecture, and capabilities. Having smart, connected products offers the ability to scale differently.

Innovations and Strategy need to be tested constantly in a different time and space.

Re-thinking design, applying digital solutions can provide the connecting mechanism to explore, relate and test assumptions, to relate your context to the higher level ones. You have brought back “scaling up” to the front end.

By designing your innovation through greater visualization and digital “twinning”  you can cascade your innovation views quicker. By building innovation concepts digitally, you can to make better assumptions, predictions, solutions, and decisions; it is drawing in all involved, specifically customers into the strategic process. It allows for conscious awareness, it becomes the method to examine, test, validate and improve on the assumptions. Then you can scale-up with increased levels of confidence.

The post The problem of scaling can confuse those innovating. first appeared on Building Your Innovation & Ecosystem Intelligence.

This report was produced by Dr. Michael Kolk, a partner, Digital  Innovation Lead in Arthur D Little and Heike Woerner, a principal, technology and innovation management.

Now that is music to my ears, a report that provides extra “jest” to my own arguments that digital innovation is going to take over in very significant ways the innovation management process from discovery to delivery.

So many of the current suppliers of software are asleep at the wheel still working the old tired model of how to set about innovation. That will change, it will change and I predict we will see significant movement into having digital solutions specifically for innovation management in 2019. As I know the continuing deepening of insights will eventually compel companies to change their innovation management thinking.

I just want to highlight four visuals from the Arthur D Little (ADL) report that makes the connection of digital and innovation stand out as a place we all must go, as soon as possible. Arthur D Little have copyright to all the visuals shown here.

ADL suggest the most important technologies can be grouped into three families, depending on what they bring to innovators
1. those that boost intelligence, for instance about customer needs;
2. technologies that bring better and faster foresight, e.g. concerning product performance;
3. digital solutions that improve and accelerate collaboration, communication, and learning.

As ADL rightly point out we have had consistent improvement in innovation performance but it still has not been at, in my view, at most organization’s satisfactory levels. They raise some critical “if only” questions and ask “might digital provide an answer”? The answer is not so much what digital can offer, it is what organizations want to (finally) become. Will they become more focused and organized to commit far more deeply to building innovation into their core. I think they will have too, in this digital age or they will be even more disadvantaged, disrupted and struggling to find sustaining growth. Its the call of top management to commit to innovation in more resolute ways.

The fourth one I want to provide from this ADL report gives a really excellent visual of the nine building blocks they (ADL) believe have the potential to transform the way innovation gets down.

ADL clearly have their views on how they will approach this digital innovation transformation. Much of the report breaks down different “persona” or archetypes and offers suggested ways to set about approaching each of their challenges to gain benefit from the transition to digital innovation, “if companies can overcome a wide range of barriers”

ADL offers some helpful opening guidelines to help solve this challenge to move to digital innovation. I think it is going to be very hard, firstly to instal any innovation engine across an entire company and in bridging this lack of capabilities, competencies and capacity without radical overhaul of what is in place today, the legacy systems of innovation, and this deep commitment to making innovation as core as digital will be.

Again, where ADL have gone in identifying how digital technologies will transform the ways that innovation will be managed, signals a positioning that they, as a practice, can continue to build from this research that went into this report. I assume they will further build a practice into advising on the translation, impact, and meaning. To help us all translate this radical redesign of the innovation management system, that we are all struggling to get our heads around. This report contributes in very helpful ways.

ADL in contacting them promised, “there is more to come“. I, for one, will be looking forward to this. The comment was: “We have already deepened and broadened our insights in recent months and will continue publishing on this important and intriguing topic!”

If you go to “search” in this posting site of mine, you will see I have been researching and offering thoughts on this new digital innovation era. If you put into the search one of these (links supplied);  “new innovation age” or “the future of innovation” or “designing the future of innovation” or “collaborating across industries” or finally “digital discovery” you will see how I have been looking at this across multiple strands of thought. All I can offer is some thoughts here: “start reading, start thinking and start transforming”

There is a new innovation era and it is digitally enabled. 2019 promises this to become critical in it’s building and gathering momentum.

The post Innovating in the digital age- a terrific report first appeared on Building Your Innovation & Ecosystem Intelligence.

The Whitepaper called “Product Complexity, Digital Transformation, and the Innovation Imperative- The race to reinvent how complex products are developed is here“.

This made me a little jealous and a little wishing that ‘we’, across the whole of innovation management, could not have one of these platforms available today. Some claim that they do this already but seriously they do not.

I have argued we do need to change the way we undertake innovation and its development. I am really frustrated by the legacy we have in our processes, systems and the ways we approach innovation, and its development lifecycle. We still break it up into separate parts, dealing with the pre-ideas stage, collecting insights, the idea management, then into a pipeline or portfolio system, that all has so such manual and siloed approaches built into this. These are tue legacy systems.We do need to bring innovation management into the 21st century where everything is transformed through a platform that allows total integration.

So as I read about the solution that Aras provides to the designers within Manufacturing to manage PLM complex systems and products, you have to wonder why this cannot be extended into all innovation’s management. Of course what “sits” on the platform will be different but it has much that can adapted and aligned in the principles of any design.

What is clear anyone that does develop a fully integrated platform designed for innovation will certainly disrupt the current way products are managed. We can actually get into true lifecycle management across not just one business but within collaborations across functions, companies, and entire ecosystems, to contribute.

This whole idea of a unified environment for innovation simply solves so much of our current constraints within this area. It allows all involved, those within the management of innovation and those who are actively supporting or needing to be well-informed, to all operate within the same environment. We can for the first time build a system of record, we can through “open” technology provide an approach that is flexible, scalable, upgradeable, and fully visual to all. A truly open innovation platform. The whole momentum of collaboration becomes accelerated.

The idea of platforms today is they can be overlayed over your existing systems (well most) if they have some level of digital interface. This allows for some levels of migration from older systems as they migrate to this innovation platform.

The ability to connect across functions, across different domains, different environments and entities really make this a highly valuable proposition. We really do need an innovation management platform and does the way that Aras has set about this, give us a working concept design?

Just take a look at the visual from the Whitepaper from Aras

Now think of the whole innovation management need. Can you visualize all our separate systems feed up and onto the platform to form the much-needed end-to-end lifecycle management across all the innovation management design, or need

I like the way Aras are designing their PLM platform system in broad functional designs.

This gives food for thought in designing functionality into a broader innovation management platform.

Function one is connect teams to contextual information, much like idea management software today undertakes. It is designed for pulling together the fragmented architecture and present information in immediately usable ways. We often need to collect ideas from multiple sources and channels and then attempt to translate these into value concepts to be explored across different functional groups. The design is working across system and functional boundaries.

Function two is focused on managing configurations across disciplines and functions complexity, often what is (poorly) attempted by portfolio management software. Here they are opening up for all to access, they can build this system of record in hand-offs. contributions, build functionality for design reviews and establish traceability. All involved can view progress, design and view all the necessary linkages

Function three is designed to enable collaborations across teams, functions, and disciplines. The platform provides open access at different levels and supports both formal and informal collaborations and exchanges. Established processes and rules can be built in, you can create an audit trail that records decisions etc. Now I know this sounds like some of the current idea management software providers attempt to provide but is this on a platform? Is this in a cloud? Is this potentially open to others outside one organization? Is this easily scalable without significant rework or cost? is this going from idea all the way through to commercialization?. The answer for all operating in our present space is an emphatic no!

Function four supports all phases of the product lifecycle. We lack functionality within today’s product development process to go beyond certain stages of the process. The effect is silos of trapped information that become buried, forgotten or simply not passed on. We cannot design one system for managing across the full product lifecycle design. To have the capability for modeling, designing, simulation all are requiring separate systems. Why? Let’s get out of the 20th century and get into this digital century in how we manage innovation, please

The design outcomes we need to determine

The whole ability is to see beyond just producing a physical product as the end result, we can move concepts into the exciting realm of having digital twins. Digital twins offer the new exciting way of seeing products in a virtual environment. One where you can draw in the final consumer, into contributing to these designs far more earlier, having a consistent reiteration environment. This gives us a far more extended prototype capacity for all to see and improve upon without expensive mockups or reworks, smetimes only offering crude ones that do not represent the finish product in so many ways. Because we can’t provide better prototypes or designs we can miss vital feedback. Having digital twins within the innovation development process can change that. We can design the concept digitally for people to see and get a digital “feel” about what it can mean in the final form

The other good things if we move over to a dedicated innovation platform we can consistently upgrade tools, methods, commuinicating mediums, repositories for access and recording. Just like the present software offerings this can still be managed and deployed supporting on-premise, hybrid or in cloud installations as your system of choice that can then be simply changed if and when needed or you become comfortable in opening up to others, to collaborate and build in a secure platform space.

Finally, we might finally get to adopting an open standards approach to innovation management to achieve integrations across other enterprises and we finally begin to establish a common language of innovation understanding. We really do break down barriers and build our trust in an innovation system built on data and a system of record and that, for all involved, puts a higher level of trust into the innovation management system. Even board members can become more engaged- oh careful, that is for many a dream or a nightmare!

In conclusion.

Am I dreaming or is this a reality? If it is a reality then how long? Innovation Management needs to come of age, a digital age where platforms form the connected future. Who is willing to take up this challenge and radically alter the innovation landscape forever? Be the disrupter that innovation actually needs to inject a sea-change of how we manage innovation and view it, as an integrated design system, all can see and work within. A true corporate system closer to the heart of the Enterprise to belief in, draw confidence and support for the value it can provide.

The post Can We Have One of These? A Product Innovation Platform first appeared on Building Your Innovation & Ecosystem Intelligence.

Much of the innovation discovery journey is a disappointing one. A hunch or insight becomes a dead end. A promising idea did not foresee a roadblock that cannot be resolved. Resources constantly “churn” and get depleted, waiting for others to be brought up to speed. Those not involved directly within the innovation project constantly remain skeptical or require more proof. The status quo of the existing places an increasing drag on the forces of change.

Then we have that often-delusional aspect; where the organization has this total belief they are well ahead of their competitors and simply point to their financial performance as the justification that their innovation is superior when it is so many other factors that have determined that. Superior is often so transitory.

When they are constantly scanning reports on the “state of innovation” it can often lull them, to give some that warm glow, others quickly being dismissive, disregarding many of the key messages as “not applicable to me”.

Then disruption suddenly hits. The cries of “Where did that come from” and a doubling down occurs firstly on costs as that is easy to stop things, fire a bunch of people or plunge into a reorganization that “actually been in the works for months” A quick ramping up of innovation to counter the attacks, to regain the initiative is simply not possible, as the resources are not there, the systems not in place, the more radical innovation unobtainable. Simply there has been a lack of sustained investment in the exploration and exploitation of the “pursuit of innovative ideas,” that are pushing new concepts, that often lie at the edge of the organization.

I mean anyway, come on: “we really don’t believe in innovation, it all is full of risk, uncertainty and all those unknowns and that is the last place to go when you are fighting in a different set of market conditions, isn’t it?” Cut costs are the recognized solution not thinking your way out within innovation. Thinking about innovation implies the longer-term and that is not so welcome at board level in today’s volatile world.

So where does innovation sit within your organization?

Two reports recently came out. Both are, I feel, “painting” a realistic picture of where innovation does sit within organizations. Am I happy with either of these, no of course not but in my view “nothing can change until something does change” What do I mean by that? When innovation becomes paramount to the future at board level then a change can occur. I don’t mean lip service to innovation, I mean deep, defining and structured thinking on innovation

The two reports, one from CB Insights, who I believe do a consistently brilliant job at “tear downs” and evaluations of industries, markets or topics. The other reflection on innovation comes from a most dependable source, researchers moving towards their doctorates at the Harvard Business School and the necessary research support to get them there.

Lets briefly look at both.

I’ll start with the one from Yo-Jud Cheng supported by his professor Boris Groysberg and a co-author, Michael Slind from HBR. The article was “Innovation Should Be a Top Priority for Boards. So Why Isn’t It?” The survey was conducted asking over 5,000 board members from around the world asking “do they do enough to support innovation?”

The outcomes cover more than innovation but provide a good overview of board thinking and priorities for areas such as strategic challenges companies face, governance activities and processes that boards are good at, expertise sitting on the board, and the hard aspects of being a board director. Innovation gets caught up in so many, sometimes conflicting issues but in many respects does not get the attention it deserves, especially as it is the most important catalyst for growth.

Innovation is well behind many other issues being focused upon by directors. The survey exposes the myth that innovation is not one of the three top challenges, innovation ranks fifth as it follows the more conventional concerns of managing talent as the top (and that did surprise me) and regulatory and competitive threats. Technology trends lay in the seventh position in this “biggest strategic challenges.”Reading through the responses, the lack of faith in their processes was disturbing. Risk management is rated far more than innovation as a better process.

To quote “When we asked directors about the effectiveness of their board’s processes for supporting innovation, 42% rated their processes as above average or excellent. In contrast, 70% of respondents think their boards have effective processes for staying current on the company”

Both, for me a little damming for preparing for a disrupting world or positioning innovation as the future catalyst for growth.

The other valuable point for me was another insight from the survey

“We also found that a focus on innovation tends to go hand in hand with longer-term time horizons. Companies that are organized around creating and enhancing value over the long term were more likely to have boards that prioritize innovation, as compared with companies that are primarily focused on achieving short-term results. Laying the foundation for innovation requires a forward-looking mindset throughout the firm and the board”

The two major takeaways for me

The report can be viewed here but finishes up with a good quote (correct insight in my opinion or validation of many):

“As one director noted, “We spend a lot of time on operational strategy — growth, acquisitions, etc. — [and] not much on risk, people, innovation.”

Now that is very disappointing but what do we expect from innovation?

In one final quote from this article: “when boards seem to have a “widespread lack of board-level engagement in innovation processes (that) could be a major blind spot and a potential liability”

My second report is the one from CB Insights

CB Insights recently released a report on the “State of Innovation” where they surveyed 677 corporate strategy executives. It does fit or correspond to the HBR researchers thinking, it gives a closer fit of what is going on with innovation in today’s organization. You do need to provide your email for access and to download of this report.

The report is a visually very easy read but gives a clarity to the big issues constraining innovation. I do like this style of reporting, offering up one page per insight. It brings them specifically into “stark relief”. This approach is really good to bring out the impact of that particular point. A good lesson in presentation, certainly for me!

I picked out these as my specific takeaways:

1. 41% of executives said their companies are extremely at risk or very at risk of disruption
2. Corporate strategists talk the talk but don’t walk the walk
3. Companies focus on incremental innovation with 78% of innovation portfolios allocated to continuous innovation instead of disruptive risks
4. Customers and employees are driving innovation. My thought is what do you expect if boards are not as engaged as per the HBR report above stating?
5. 57% of respondents said their companies do not follow formal innovation processes and executing remains mostly ad hoc and unstructured. Even the majority don’t have processes for ideation and development phases. Now that is shocking!
6. Companies lack confidence in their ability to innovate and it progressively gets “less effective” in each of the phases of innovation. Idea Generation, Development/Design, Commercialization/ Launch, Optimization/ Management and Product Retirement
7. Companies take an insular view of how they will attack innovation
8. Finally: Because they prefer to build (themselves), corporate innovation is slow.

When I look at this list I really do go “oh dear”. There are some clear positive takeaways also in this report such as “high performing companies build cultures of innovation across functions” and achieve a 5X increased performance due to this and “high performing companies invest in disruptive projects”.

The issue for most is “how do they become high performing? Until we treat innovation as a core process, disciplined, structured set of activities that are managed in different ways than the existing business, we will struggle. Embracing the aspects of a high performing business within innovation offers significantly increased performance. The ability to grasp all that this entails and establishing a set of innovation management disciplines, most will simply “bounce” along on a very unsatisfactory innovation projection of mediocre growth and return.

So to download the CB Insights report go here “State of Innovation“. It is well worth reading and is in such an easy, digestible format

In Summary

I would suggest you go and take a look at both of these reports. They reaffirm that innovation is not the priority it should be at board level, both offer a devastating reality of poor innovation processes and structures and a lack of corporate design for salvaging innovation out of its current mire of incremental, ad hoc and risk constraints due to this lack of top focus.

Innovation is full of rhetoric and hot air. Those in the trenches are believers but they are battling forces that make it doubly hard to make a success of innovation. The internal forces are as much against them as the external unknowns.

As I opened with as my title “What do we expect from Innovation? Mostly disappointment.” We can only dream that we are still moving towards my view of that “New Innovation Era”. It still lies ahead if we want to recognize the valuable contribution innovation does make to the future growth and, more importantly, to their ongoing sustainability.

These two reports reflect the potential of where innovation can go but do offer a snapshot of the present reality of why it cannot until multiple aspects of innovation management are addressed and accepted. These changes are essential to underpin innovation with a clear focus, dedicated resources, recognized as a functional discipline, well thought-through processes and a top to bottom recognition and focus on its importance. Will something change? I seriously wonder although I’ll keep banging the innovation drum, hoping some will (eventually) listen.

The post What do we expect from Innovation? Mostly disappointment first appeared on Building Your Innovation & Ecosystem Intelligence.

One where it is offering up a healthy mix of rain, stronger sun, a little flurry of snow and some heavy wind too.

It can constantly confuse us as it can rapidly alter within the same 24 hours to often keep the heating on, when it should be switched off and visa-versa. It can be an uncomfortable month of adjusting constantly, second guessing of what might be ahead.

On the innovation front I have been experiencing the same feeling of adjusting to uncomfortable days.

First, I was reviewing a report from Accenture, on how US big business was treating their innovation as more left to chance in their report, with my summary here on cloudy execution, my snakes and ladders. This ‘rocked’ some of my beliefs, ones where I thought we actually were making the progress on innovation understanding. It seems this is not the case, we are going backwards and then my month got suddenly worse from a report from Deloittes.

The Deloittes report was on how leadership within Boardrooms under  my”uncharted waters”, was about how our boards are struggling to get their ‘collective heads’ around disruption and how innovation can, or cannot, dig them out of the threats they are facing. They are being disrupted constantly across the business. They are caught between fear and uncertainty on what to do and clearly that is not a comfortable place to be.

Both reports, as I was reviewing them, left me a little depressed to say the least and it just continues…..like the April weather…. leaving me totally uncertain and then what pops up….

Adding to this innovation reporting mix- Innosight provides a further angst report.

So a further report, this time from Innosight, throws even more angst into the boardroom, adding further into this mix of fear, caution, grim reading on a lack of innovation commitment facing larger organizations. The report from Innosight is in their Spring Insights, called Corporate Longevity: Turbulence Ahead for Large Organizations it just added more worrying news from my perspective on innovation lack of top level progress.

I again buckled up for a further reading of unpredictable innovation resolutions, just like this April weather, all raining down on us from those not heeding, understanding or changing their thinking. In many boardrooms they are not wanting to tackle in fresh ways the future and work towards embracing all the disrupting forces swirling around at present. They seem to want to hold on and not let go of the past .I’m getting really innovation weary from all this

So three reports I thought “oh no”- the grim reaper is truly upon us.

Innosight’s report starts with “We’re entering a period of heightened volatility for leading companies across a range of industries, with the next ten years shaping up to be the most potentially turbulent in modern history.”

Reap what you do not sow Mr Boardroom member- uncertain futures, badly invested in

So we all know that 50% of the current S&P 500 will be replaced over the next ten years, didn’t we? Well I did from past readings (clever me) but it is never nice to be reminded again. Not because of its reality but because of the leadership we have in place in many of these organizations is in the denial it will happen to them.

That is what is for me so upsetting. They earn Squillions and screw the long term health of the organization totally up as more often the case, because they were not even focusing on any belief of the future, just taking in the rewards for the immediate present. They could have done something about it but seem incapable to show the level of leadership to achieve this, just why, why is that?

With so much additional disruption coming from technologies, from start-ups, from intense M&A activities and having this ‘being overtaken’ by more agile, quicker growing companies just piles on the pressure within the boardroom but ignoring its threat as “it will not happen to me” without the boldness, decisiveness and intent to reinvent the organization to catch the different ‘waves’ of opportunity is sometimes bordering on criminal, well for me- what about you?.

Innosight in this report has a great passage

“Viewed as a larger picture, the lifespan chart serves as a barometer for marketplace change. And the stakes couldn’t be higher. Shrinking lifespans are in part driven by a complex combination of technology shifts and economic shocks, some of which are beyond the control of corporate leaders. But frequently, companies miss opportunities to adapt or take advantage of change. For example, they continue to apply existing business models to new markets, fail to respond to disruptive competitors in low-profit segments, or fail to adequately envision and invest in new growth areas, which in some cases take a decade to pay off”.

This sums it up pretty well for me. We have failures all around us going on due to this lack of imagination, a poor coherent longer-term vision, a lack of confidence to achieve any form of transformation lies within the organization and so it becomes incapable to undertake the transformation that it needed to undertake, due to continually miss the opportunities offered to evolve.

Leadership still lacks real innovation commitment, the linkage to growth, to fending off disruption, of tuning into current and future needs, the message of embracing it has simply not got through to those within the boardrooms; one that the comprehensive management of innovation can offer significant improvements on present performance and they need to fully take hold of it, to learn and leverage, to explore and exploit, in imaginative and breakthrough ways.

Innovation can offer a pathway out of the existing position that many organizations are facing, ones of poor growth, limited sustainability and growing erosion of their existing market positions, often spiraling down, with cutting existing costs seen as the only option. It can be so very different if they wanted to fully engage with innovation. Others are reaping the rewards of their own inabilities in the boardroom to commit the time needed to practice innovation.

The question is “will it change?” If so how, why and when- not with these answers.

The Innosight report points out in the organizations they surveyed of 91 companies with revenue greater than $1 billion across more than 20 industries across the world, the shocking news  that only 24% have a growth strategy with a time horizon of beyond five years, 16.5% report having no formal growth strategy or a growth plan at all as they are seemingly “too busy executing”, “really don’t have time to focus on it” or “we don’t have a good process for formulating a growth strategy that we are confident about”

Then you get the “but of course we are committed to long-term innovation” but it is our “day-to-day decisions that undermine our stated strategy to change” Oh for heavens sake can this really go on? To make substantial change when you are facing the type of change and threats occurring today can easily take up to a decade to fully realize.

So the future continues to be pushed off, growth stays morbid and we resort to simply cutting costs, lowering choice, quality and resources to handle this, we continue to outsource our future to others, who are more than ready to take it on and learn, so as to take your place eventually.

So let the bell toll- let’s say goodbye to 50% of who we know today, you deserve it.

It leaves you utterly sad, even depressed. Innosight offers these thoughts below as a worthwhile thought, when so many of these larger organizations are not heeding or reading about their serious lack of commitment to innovation and the future. They seem apathetic or incapable to comprehend what this eventually means to the future of their organizations.

So Innosight suggests: “Leaders have to confront what might be called tensions, balances, or, even in extreme circumstances, paradoxes. They must optimize today, and discover tomorrow. They must be decisive and bet on moonshots, and defer to experiments. They have to focus, and enable serendipity. They have to leverage the core, and break its constraints”

It seems many just simply do not have the appetite to grow, to look towards the future when their own investment and return is tied mostly to the present.

It just does not seem boards are confident in innovation. There seems a reluctance in wanting to take ownership for innovation, one encouraging and investing more confidently in an evolving/ learning series of experiments to evolve the future of their business in iterative, exploratory ways. It is not a ‘core’ discipline or focal point as innovation continues to have been left to others outside the boardroom. That needs to change.

We are left to judge each company by deciphering ‘the smoke and mirrors’ offered that are claimed to form their “unique” innovation culture, to attempt to determination the staying power and their true belief and undertaking in a future, and make our judgement- mostly it should be yank our money, run like hell, until this future can be well-articulated and well-backed in action.

As companies sadly stick to their historical core as the business, falling to take the risks, invest in the new growth ventures and experiments to build towards a better shot at the future, so I say “just simply go, fade away and leave a puddle as your mess or contribution, and forget the thrill of reinvention and providing a ‘sense of destiny’ and taking pride in exploring more than simply exploiting, often just for your own personal gain”

So Goodbye, many of you in leadership positions, as you do not serve innovation well for its potentially exciting future. You are simply letting down the communities, the stakeholders, your customers, our futures, by not heeding all these ‘darker’ messages coming out of Accenture, Deliotte, Innosight and countless others telling you to change or die!

The “Grim Reaper” is knocking on many boardroom doors. Let him cut away the dead wood and we can all move ahead.

The post No Company deserves to survive with apathy in its future first appeared on Building Your Innovation & Ecosystem Intelligence.

In a just-released “The State of Innovation Management in 2015” that I have authored and kindly provided by HYPE for free, I believe you will find something of interest that you missed during a busy year, coming to a close.

I certainly hope you will find time to go through it.

You’ll gain a valuable and quick insight into critical aspects that innovation managers and CINOs should be aware of. It is in an easy format of thirty-plus pages and offers a reference resource that builds a solid understanding of innovation today regarding relevant factors that will stimulate and support your innovation activity.
http://i.hypeinnovation.com/the-state-of-innovation-2015-report

The Surge of innovation reports in 2015
I am sure you have experienced that in 2015 we have seen a significant surge in innovation reports, many of these coming from large consulting firms or innovation publishers. Each has been providing an updated view on where innovation presently ‘sits’, in its challenges and the needs to be addressed going forward.

I approached HYPE and suggested that there should be an attempt to pick out some of the interesting points within these reports, I was promptly given the challenge and they are providing this for free, a year-end bonus I feel.

Go to this link, which takes you to the landing page and simply register to obtain this free report provided by HYPE at the year-end. http://i.hypeinnovation.com/the-state-of-innovation-2015-report

Investing your time is always at a premium, I trust this report is worth it.
I decided this would be valuable to save you time or reconnect to some good reports that came out in 2015. Usually, we simply don’t have the dedicated time to wade through all these reports, they seem to come in waves or sometimes we even simply just miss them.

In this report now released I was highly conscious of saving your time and have tried to make as much of the reporting visual with as little text as necessary. Your need is to determine what is relevant to your situation and within the links provided you can explore these more if they have real relevance, I’d bet one or two really will.

The tough part was on deciding what to review, include or exclude. I took the view of just reviewing all the known (to me) reports coming out in 2015, with an exception or two going back to 2014 if it supported my thinking of what I think you might view as relevant as against just interesting. I was looking to achieve some “actionable relevancy”

I ‘housed those’ under a few important headings

These included leadership issues, concerns and needs, secondly the poor way we seem to be spending our innovation budgets, and thirdly some handy lists of the benefits of collaborating seen from both the large and small organizations’ perspectives.

Also an excellent benchmarking study full of really relevant tables that will get you comparing or constructing your own comparisons, some aspects of global R&D spending, a short view of some innovation leaders who gathered and debated three ‘choice’ topics of their top of mind concerns around innovation.

Finally I had to include one report on looking at the new innovation equation, a report I really felt was not well-distributed but full of interesting thoughts and relevant tables to compare where you are with their reported group.

I am hopeful it gives you a stimulating read over the coming festivities as we begin to move forward into 2016 with some helpful looking back from these selected 2015 reports. If you need any further interpretation or my further perspective you know where to find me.

Here is the landing page again, simply register for the report and then hopefully it offers you something of value to you.
http://i.hypeinnovation.com/the-state-of-innovation-2015-report

Happy reading, a really great start to 2016. Innovation will continue to be at the forefront of our business needs

The post The State of Innovation Management in 2015 Just Released first appeared on Building Your Innovation & Ecosystem Intelligence.

In May 2013 Imaginatik fielded an on-line survey to 204 business decision-makers across a wide range of industries and from these results produced a report “The State of Global Innovation, 2013” just released.

I have found this report to be really an excellent understanding of critical issues that still need to be addressed for innovation to deepen its position within organizations.

I’d written my own predictions for 2014 before I had  only just read this report  just recently released. This was in my last post “Heading for 2014, will innovation change?” I see an even sharper agenda emerging for me.

To Imaginatik, I really can only offer the highest compliments for a well-structured report, thoughtful in its views and tentative forward-looking conclusions. It helps me greatly.

**For me this is the outstanding innovation report of the year 2013**

The report covers a variety of questions around Strategy and Execution

 Imaginatik asked respondents a variety of questions about their companies’ approach to innovation strategy, governance, leadership, process, and results.

The major findings of this study are divided into two sections: Strategy & Readiness and Process & Execution.

I’d like to summarize only the section 1 as my initial takeaways here.

Their Section 1 was focused on Strategy & Readiness  and explored the relevance of innovation as a management priority and dedicated enterprise strategy.

Imaginatik asked questions exploring topics such as:

• In the eyes of senior leadership, how pivotal is innovation for the company’s success?
• To the degree that innovation matters to senior executives, what is driving it as a priority?
• Who, if anyone, has taken leadership of innovation programs at today’s companies?
• To what extent have companies created governance structures for innovation management?

The present innovation state can be summarized by these two comments:

1. The overall picture is that despite the emergence of innovation as a dedicated business competence, most companies are still early in the maturity curve.
2. Much work remains before innovation truly has a permanent home within the modern enterprise.

Most of the comments following are directly from the report but summarized in my takeaways.

Innovation matters at a strategic level, but formulation of strategy is still middling.

Today’s enterprises are actually placing innovation as an executive priority and organizational mandate.

In terms of whether companies have chosen to make innovation a dedicated priority, the answer was a resounding yes, nearly two-thirds of organizations indicated that innovation had been a dedicated priority for two or more years.

Already, innovation has begun to show some longevity as a serious business trend.

So what are the drivers, it seems external change is driving the need to innovate

There is clearly a strong imperative to innovate among companies that have chosen to create dedicated innovation leadership and corporate governance plans. However, the substrate of “innovation” can vary widely from one organization to another, and between industries.

When asked about the main drivers for their innovation efforts, the keyword for our respondents was “change.”

The highest-scoring drivers dealt with major, potentially disruptive, external change: the changing business environment, changes in customer needs or preferences, and the need for markets or segments to enter.

Each of the four highest-scoring responses equate to the ability to either adapt to, or profit from, change in the outside world – including the changing external environment (48%), changes in customer needs or preferences (44%), and new markets or segments to enter (43%). More generally, lack of growth (37%) also scored high, presumably due to a changing world and the need to find new sources of growth.

By contrast, all of the lowest-scoring factors dealt with the incremental ability to compete better in existing marketplaces: responding to price pressures, responding to the moves of competitors, the need to scale concepts better and faster.

Most interesting, the two factors most associated with competing better in the same markets were dead last among innovation drivers: the need to respond to competitors, and price pressures.

• To summarize the drivers it appears that finding fundamentally new paths to differentiation and growth is driving innovation much more than trying to compete better in existing / established markets.

• The majority of respondents seemingly felt incremental change was far less important than re-inventing the playing field or finding brand new ways of adding value.

The efforts to build innovation capabilities has become fashionable for executives to tout

Are organizations doing that much too actually spear head innovation on the ground?

Overall, the findings show that although a vast majority of firms expressed innovation as a clear management-level priority, fewer seem to have created the requisite governance and leadership structures to make sure effective follow-through. Organizations have indeed only begun to create dedicated governance structures for innovation.

The survey data does suggest that today’s corporate leaders are creating innovation governance structures to address this disconnect: More than three-quarters (81%) of responding companies had some form of innovation governance.

Even more impressive, a surprising number (33%) of organizations reported having a central innovation group that was both a) driving a corporate innovation agenda, and b) working together with other functions and business units.

Struggling with the distinct rhythm of innovation

A big issue still remains that without someone carrying the torch, organizations often struggle to truly create this innovation rhythm.

When done well, innovation is a very different rhythm from business-as-usual – necessitating the productive coexistence of creativity and digestion, unstructured chaos and rigorous order.

Many companies are still new in their efforts to treat innovation as a top priority, and therefore they are still experimenting with corresponding organizational schemes for executing.

Leadership: Innovation is increasingly led from the top

There is now a strong trend for innovation to be led by a top-level corporate leader with responsibility over all types of innovation, not just technologies and products.

One-third of respondents said the Chief Innovation Officer (or similar) was the primary leader of innovation within the organization.

The CINO’s influence is still dwarfed by the CEO, who tops all executives both as the leader centrally responsible for innovation (41%) and for having (at least) partial leadership of innovation (77%).

Other than the CEO and CINO, other C-level roles are rarely implicated as the primary innovation leader – this may be caused by the prevalence of cross-functional executive committees – which was only barely behind the CEO as a primary pillar of innovation leadership (40%).

With more respondents indicated the CEO or a cross-functional executive committee as their key source of innovation leadership it becomes an interesting mix of innovation’s top management.

From my perspective it will be interesting to see where and how the CINO role develops to strengthen the discipline and function of innovation as a clear organization structure. Or will it stay caught in a similar ‘trap’ as the Chief Information Officer, often not a main player within the C-level hierarchy, often caught in rapidly changing situations, trying to adapt and re-align?

How these three actors of the CEO, CINO and Cross-functional executive committee build a sustainable rhythm will be a key to tomorrow’s best emerging practices of innovation. Hand-off, accountability and execution will need addressing carefully.

There is some big question remaining of whether the strategic follow-through eventually catches up with the generalized executive desire for innovation does still remains to be seen.

In the coming years, it will be interesting to see where the balance comes to rest between the CINO, the CEO, and the executive steering committee. To a large degree, all three are central stakeholders – and should have strong leadership roles – in the innovation program.

This is further evidence of innovation’s rise onto the executive agenda, the rational for which was explained well by one respondent: “Without the leadership team pushing the agenda, [innovation is] an uphill battle.”

“Many organizations in our survey acknowledged a mismatch between the upper and lower levels of innovation leadership within their organizations”

As one respondent pointed out, “Though the idea of innovation was initiated at the highest levels of management, at lower levels it is perceived as another thing to do, in other words, just a project.”

Respondents report significant strategic and cultural roadblocks to innovation success – suggesting that the effectiveness of these innovation governance structures still needs improvement.

In many organizations innovation still struggles to justify its existence as the demonstrable outcomes of innovation are not yet fully aligned with corporate objectives.

Even at a strategic level, respondents believed that the most important goals for the innovation program were new products and new processes. Yet the single biggest outcome of innovation efforts was cost savings, with process improvements near the bottom of the list of benefits.

My thoughts here 

For me, this understanding of innovation and its value is still at a high level of immaturity and the ‘massive’ gap between the desires for change, to deal with the disruptions occurring externally and the inner safety-first attitudes that are still prevalent is a huge struggle to resolve.This is our critical mismatch point to resolve.

Top management mindsets need to radically alter for innovation to finally take hold. There is a time to stop being ‘proud’ and ask those that relate to the rich potential within innovation and its different types for the help they need, to understand all the aspects required for it to be fully mobilised. A piecemeal approach will simply not work.

Innovation can galvanize growth, provide fresh jobs and provide that often missing identification within organizations, called ‘engagement’. It can transform your future. There is this urgent need to get off the cost cutting, extending product only way of thinking. Innovation is much bigger than that and it is the external forces that are forcing the C-level change in valuing innovation.

Some conclusions from this report

• Overall, the survey data, combined with respondents’ comments, suggests that most companies are still in the early stages of developing a well-articulated innovation strategy, despite solid strides in building first-generation innovation leadership and governance models

• Some of the conclusions were that Innovation has become a dedicated corporate function where the level of purposeful focus is attempting to be matched by a corresponding focus on high-level leadership/stewardship of innovation, as well as a corresponding level of corporate structure and governance of innovation.

• Imaginatik offers some conclusions that as the innovation discipline evolves, they believe that both the objectives and results of innovation will become more sophisticated, and thus increasingly well aligned with one another.

• They conclude that with the increasing development of new practices in leadership, management, process and execution corresponding to the unique challenges of breathing innovation to life within the auspices of large, siloed, traditionally bureaucratic institutions.

• For the time being, the relative mismatch of corporate innovation priorities and documented innovation results suggests that organizations still have a lot to learn with respect to both what are the most reasonable priorities and expectations for their innovation programs, and what are the corresponding best emerging practices for following through to make it successful and well embedded in organizations.

The report greatly informs me and I hope you!

The report tells me, there is MUCH work to be done at the top of organizations to shift their attitudes and make better connections.

Within the report lies much of the innovation pathway that most organizations still have to travel but there are some very encouraging signs the real innovation journey has  really begun and moving down a path to greater innovation fitness and that all important point, awareness.

Imaginatik suggest: “Eventually innovation will become more deeply embedded in the enterprise and it will be increasingly indistinguishable from operations, and thus increasingly well suited to helping the corporation side stay ahead of the furious pace of external change”

I would recommend you download and read all the report, to reset the innovation buttons for 2014.

Thank you Imaginatik for a really excellent summary of the State of Innovation in 2013. Roll on 2014 to see how we can resolve some of these critical issues.

The post The Coming Age of Innovation in 2014 and Beyond first appeared on Building Your Innovation & Ecosystem Intelligence.

A strike of declining investment, of a lack of confidence, of not sharing in the belief innovation offers a solution to our continued problems of wealth creation, of economic growth, of galvanizing society.

So for many, innovation is actually on strike, we are not investing as we should according to a series of reports and analysis, focusing specifically on the UK economy, sponsored by Nesta. Nesta is the UK’s innovation foundation and they help people and organisations bring great ideas to life.

They do this by providing investments and grants and mobilising research, networks and skills. They operate independently but are very central in shaping innovation thinking.

You can “read all about it” through these links offered, firstly an Executive Summary and the downloading the full report from their site.
I offer a fairly extensive set of ‘extracts’ below, so read on:

Already a lost decade of innovation has occurred
According to Nesta “The UK economy has experienced a ‘lost decade’ of innovation, with new evidence showing that businesses had a crisis of confidence in the 2000s, prioritising cash and concrete over investment in innovation”.

* Nesta’s latest Innovation Index released back in 2012 showed that investment in innovation by British businesses has fallen (or collapsed) by £24bn since the recession began and has not recovered. This is five times the amount the Government spends each year on science and technology research.

* Recently a further view on innovation was expressed by Nesta in mid-March 2013 on how to use the Government’s purchasing power to boost Britain’s most innovative businesses, arguing there is a continued and urgent concern on how to get Britain’s businesses investing in innovation again.

Some major points summarized here

I cannot provide proper justice to these extensive reports or to all the contributors that make up its worth but let me attempt to pull out of these reports some headlines that seem to me the real underlying issues of why the UK, and many others, are in this period of innovation stagnation.

Nesta produces a highly valued innovation index for the UK, this showed in its third review

• Innovation investment fell by 7% or £7.4bn between 2008 and 2009, as the recession began
• A further fall of 14%, or £17bn, from 2009 to 2011, according to a survey of 1,200 businesses
• After rising steadily from 1990 to 2000, innovation stagnated from 2000-2008 at 12% of private sector output

With a decline of £24bn, since the credit crunch in 2008, it is interesting that even in the period between 2000 to 2007 businesses investment in innovation had levelled off. Investments in fixed assets fell and became increasingly dominated by bricks and mortar at the price of technology. Companies accumulated cash and concrete in the 2000s, far from the age of innovation.

There has been an increasing disconnect between the UK’s financial sector and investment in innovation and technology. The 2008 financial crisis has turned into the longest downturn in modern times.

We are seemingly caught between the two sides of an argument, Plan A for recovery based on austerity or Plan B based on stimulus. We see the continued consequences of the hardening push for austerity  in nearly all the Mediterranean Countries, let alone the severity of the austerity part has continued consequences in the UK and the USA . As we debate this two dimension view there are crucial ways everyone is losing ground, especially to the developing world and its significant focus on its innovation activities.

Nesta argue for Plan I to be the ‘missing part’ for the UK to thrive as a productive, dynamic economy.

The report lays out in significant detail the areas of potential focus and why and what they can be achieved to reverse this set of trends on innovation investment and regain economic growth within the UK.

Firstly dealing with the question of innovation

• The ability to turn ideas into useful new products, services and ways of doing things is the wellspring of prosperity for any developed country
• The companies that invest most in innovation tend to grow faster than ones that don’t; and the countries that invest most in innovation do as well
• Nor is it a coincidence that many of the nation’s doing best today in innovation have articulated a clear vision of where they think their future wealth and jobs will come from
• Countries as diverse as Korea and Finland, Israel and Singapore have sustained a mood of optimism and possibility through the crisis, and given business a sense of the future gains that make investment today worthwhile.

A growing reality or a self-preservation attitude still prevails.

• Unfortunately the current economic debate in the UK has pushed innovation and questions of long–term growth to the margins
• But if we want to take advantage of the opportunities on offer in the next decade from new technologies, new markets, and new ways of doing things, we have to face up to the gaps, the failings and the many ways in which institutions and markets aren’t well designed to make the most of new ideas. They stay stuck in the past.
• It is hard to calculate precisely the size of the gap, but some of the analysis that follows suggests that in the UK, they may be under–investing in innovation to the tune of £38 billion a year.
• Transformation from industrial decay shows that change for the better can happen relatively quickly where there is the will. Currently we leave to many as “walking dead” and badly under support those in finance and resources required that show the way forward to ‘regenerate’.

The prize according to Nesta’s report is what innovation still offers us

• First, the continuing advance of information technology is showing no signs of slowing down. Moore’s, Metcalfe’s and Gilder’s ‘laws’, which predict that processing power, bandwidth and network connectivity will increase exponentially over time, still appear to be in full force and can open up a dizzying range of possibilities

• The huge potential of ICT is just one aspect of innovation. Other technological developments, from new advances in life sciences to the emerging disciplines of nanotechnology could have just as large an effect.

• During this phase it may be the ability to integrate different technologies that will be critical — from genomics and proteomics to bioengineering. New materials, including graphene and other carbon structures, may lead to dramatic breakthroughs in manufacturing.

• Social innovations also offer great potential. The wastefulness, in both human and financial terms, of the way we run our healthcare systems, the way we care for old people, and the way we treat the most excluded in society, is huge

• The right social innovations could unlock as much value as many great social innovations did in the nineteenth century. During past periods of rapid change, like the mid–to–late nineteenth century, radical social innovation and reform proved essential for the full deployment of technological innovations, from industrialisation to the railways. The same is very likely to be true as the world gropes for a new approach to growth.

Most of these innovations will create benefits not just for those who develop and commercialize them, but also for those that can effectively deploy them, and build new services and businesses around them.

The poor state of the UK innovation system needs rethinking

The interplay of resources, people, ideas and markets in which innovation happens — much isn’t working well according to the report. What can be improved?
There are three broad ways in which the innovative capacity of the UK can be improved:

1. Investment: increasing how much the UK invests in innovation
2. Systems: upgrading the system of innovation so that these investments go further, including greater demand
3. People: changing the underlying cultures and skill sets to be more innovation– friendly

Making the innovation system work better

The second factor suggested, that holds back the UK’s ability to innovate, is the structure of their innovation system and is worth one additional comment — it is the combination of the involved organisations, their links and forms that determine how new ideas become reality. For over a hundred years, commentators have noticed a contrast in the UK between the world of ideas and the world of implementation– what a lovely observation that is!

Designing an innovation policy

So within the report there are many policy suggestions but the aspect that stands out for me come in the way the Nesta’s reports suggest four design principles for effective policy development

A design that involves arranging fundamental elements according to a few overarching rules or ‘design principles’, and then they suggest we all furiously set about adapting and improving them in the light of experience. Keep it simple, effective but well focused.

The four are summarized here:

• Experimentation. Innovation is a risky business. Breakthroughs only come from a willingness to push at boundaries, to take risks, and, sometimes, to fail. What matters is not backing winning projects every time, but backing a good portfolio of projects. Experimentation is not easy, especially in an adversarial political system, that is often very risk adverse due to this. Risks need to be taken in the face of huge challenges like ageing or climate change, as well as in making the most of great new opportunities like the Internet of Things or synthetic biology.
• Entrepreneurship. Entrepreneurs are essential to an innovative economy: they don’t usually come up with ideas, but they do work out how to put ideas into practice. Entrepreneurship is also important to good innovation policy-making. The flip–side of an experimental innovation policy is the need for entrepreneurial leadership and challenge within the system. Entrepreneurial leadership within the system can be valuable. These kinds of entrepreneurial figures provide a valuable antidote to consensual policy that works primarily with incumbents.
• Openness. Good innovation policy cannot be made by government alone and certainly cannot be delivered solely through state bodies. Innovation flourishes when businesses, research organisations, and intermediaries such as standards bodies and trade bodies come together to identify and address major challenges. What is important though is government cannot rely simply on assembling interested groups – this risks capture by incumbents and vested interests, it needs a very open platforms where all can participate, working towards their goals but recognizing the essential need of all the diverse participates on the platforms.
• Ambition. Finally, innovation policy needs ambition, with the right mix of challenge and focus. Government’s power as a leader, as a customer and as a regulator matters as much as it’s narrow role as a supporter of research and development. Finland, Korea and Israel are all countries that have managed to make this a reality. In all cases, leadership has come from the top but been broadly based.

Making policy needs to guard against certain common present barriers

The process of making innovation policy must be future–focused. The value of foresight exercises are recommended which are not great at predicting the future but better at making those who undertake them recognise the future when it manifests itself

Policy also needs to be aligned. A frequent complaint made by foreign businesses looking to make major R&D investments in the UK is that government policy is poorly aligned: helping to orchestrate such things as land, planning, training, supply chain development, and links to universities

It seems UK innovation policy lags behind that of Germany and Japan for example, both of which use grand challenges as a way of organising and focusing innovative activity.

The report finishes the discussion section with this before it moves into specific proposals.

The endless public debates over responses to the economic crisis needs to change if we are to put in place a sustainable alternative to stagnation. We need business leaders who are willing to prioritise the case for innovation over other issues such as top rates of tax or regulation.

We need to use critical moments of choice, we need to restore faith and trust, we need to unlock this huge cash pile sitting on many organizations balance sheets.

And we need political leaders with a deeper understanding of innovation (at present only a tiny fraction have direct experience), and an appetite to advocate it. Innovation needs political and public advocacy and argument if it’s to be widely supported.

In summary

Nesta are a tireless champion of innovation. The whole understanding that if innovation stagnates so does the chance for recovery, for wealth creation and growth in jobs, and in our economic activity. We are not ‘stretching’ for a better future, we are sitting back waiting for the right ‘fundamentals’ to return.

They will not unless we decide to open up and reinvest in ‘things’ that have perhaps higher risk but contribute to changing today’s lack of dynamics.

This report might focus upon the UK but much of what it argues applies to most of the developed nations in Europe and North America.

We are told our corporations are awash with cash; our governments are strapped for revenue generation activities. Plan A requires austerity, Plan B needs stimulus but their balance requires what a Plan I can offer. To regain growth but at the same time manage what we have more wisely.  We need to balance all three.

I can only recommend you spend some time on the Nesta web site and value, as I do, their focus on innovation in solutions, stimulating debates, conversations and well-structured reports.

They are one of the best sources to go, for appreciating the complexity of innovation and being able to “see” where innovation lies, at the heart of all our futures.

The post Strike! Innovation is on strike! first appeared on Building Your Innovation & Ecosystem Intelligence.