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

Recognizing the importance of Dynamic Capabilities

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

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

Appreciating and leveraging those ordinary capabilities is equally essential

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

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

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

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

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

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

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

Understanding all your required capabilities needed is essential

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

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

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

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

Achieving innovation fitness is a journey- to get there we often have to manage the switchbacks as we build our capabilities and capacities to innovate.

1. Getting Started – Understanding the Needs & Imperatives of Innovation Fitness

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

2. The Fuel of Innovation Performance – the dynamics of innovation

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

3. Getting even more specific – quantification and qualification

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

4. Building the Innovation Fitness Machine – reinforcing feedback, identifying needs

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

5. The Strategic Architecture – designing the system to perform as needed

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

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

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

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

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

8. Building and Testing Capabilities to Perform

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

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

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

The end result is looking to generate your fitness landscape

As you can see this is applying a very comprehensive approach, a fairly ‘intensive’ one.  This might alter individually after some clear piloting, learning and experimentation undertaken.  Building innovation capabilities takes time; they are complex, highly structured and multi-dimensional. Any structured approach to tackling innovation takes time and considerable commitment.

The post 9 Stages for building innovation fitness first appeared on Building Your Innovation & Ecosystem Intelligence.

The resources provide the lungs that give oxygen; they need to constantly be nurtured, too breathe and pump new life into the existing.

For innovation the same applies, we need to consistently build our innovative resources, they give delivery of the healthy living cells to promote and sustain us in new value potential.

The problem is we often are not very good at maintaining our resources and innovation activity. We just simply do not sustain our efforts, we tend to allow them to drift along or become lopsided from one individual team’s efforts, while the others simply ‘wallow’
Equally, organizations rarely set about designing the right conditions, working towards the innovation environment that ‘delivers’ a particular state of being, so as to allow something positive to happen, it is just expected to happen. Do we even bother to check for the real pulse of our innovation efforts?

My belief is if we do not have a constant working and reworking of these conditions we can’t honestly expect our organization to build the capacity, capability and competency we need for innovation to take hold, embed and becomes the long-term driver of the growth our organizations need and desire. We need to design a more sustaining effort

How do you develop the capacity to be exceptionally good every day? It is this constant focus on building the capabilities that matter, yet often we are not aware of those that significantly contribute, against those that are necessary to have or simply those that we need around to maintain what we have achieved.

Combining capability with capacity and competence becomes essential.

It is the combination effect of skills, organization abilities, processes and learning that combines to get things done. They individually and collectively impact performance.

Are organizations clear on what makes-up their core competencies? Do they constantly evaluate these within a consistent evolving set of changing market conditions or are they rather static, inwardly driven and not outwardly aware?

I have been working on for some time –actually it seems for ever- on a framework that separates the static needs of working innovation with the more dynamic ones that make the difference and provide the abilities to turn every-day activity into more distinctive, breakthrough, radical or disruptive innovation outcomes.

This work-in-progress I keep building upon,can be explored on a dedicated web site of www.innovationfitnessdynamics.com.

We do need to plan a capability maturing pathway so as to move our capabilities and competencies through from often a current ad-hoc state.

We need to turn these into a more formalized and predictive, planned out state, which brings a more integrated approach so as to extract any synergies but allows for a decent level of autonomy to grow individuals, yet build teams that constantly ‘form’ and reform to tackle the challenges the innovation opportunity presents to bring those to successful fruition in better ways.

Organizations seem not to learn from common mistakes
The amount of inconsistency in innovation (fits and starts) ,the turning off and on holds the building of our capabilities and competencies to innovate continuously back.

We do need to have a consistent, well-thought through plan for innovation development within organizations that is a resource development plan that has its distinct budgets, plans and dedicated group that is accountable to deliver on these plans, updated like all others within the normal planning cycles of the organization.

Innovation needs to be central within the new business core

When are we going to recognize that innovation should be a real core of our organization’s makeup? I wrote a three part series about “moving innovation into our core” (here, here and here)

I concluded with the emphasis on technology within all our organizations that we are in need of a radical newly designed Enterprise-wide innovation process. One that is embracing and adapting constantly to all we have been learning about how innovation works and what technology, digital, networks, relationships and social streaming brings that all need to be fully integrated within this redesign.

Innovation requires increasing agility, flexibility and allowing creativity to flourish on a constant, evolving basis. Today, innovation often stays outside the mainstream system and operational structures, often to it’s and the organizations detriment. as it is seen as something that does not fit the ‘norm’. This is today’s innovation problem

Innovation needs to be fluid, open, responsive; sometimes reliant on the instinct, hunch or powerful insight that is never ‘predictable’ but suddenly emerges from a collision of events, or random thoughts that lead to a new insight, a game changing one. It is really hard to turn this ‘randomness’ or serendipity into a system but certainly not impossible.

How are we going to design our innovation capabilities, competencies or capacity unless we fully recognize the dramatic changes in business that are now underway and what this needs to be addressed, to allow for a more responsive, fluid, agile and adaptive culture, to flourish and respond so as to generate the better innovation of the future we need.

Recognizing differences
There are real differences when it comes to building innovation understanding and equipping your organization to perform at improved levels. There are different traits, actions and activities to think through.

Here are some of the needs:

* We need to build far more serendipity into what we do, also random connections, as well as purposeful discovery, by seeking out increasing connections and engaging in networks of learning and mutual exchange.

Places where we are turning curiosity into reality and building our innovative mental abilities for growth, development and accomplishment, opening up and being receptive and then translating this into new innovation.

* We need to embed into our new innovation core new routines and thinking. It is determining the changes needed by those new combinations of fusion by seeking out the chemistry from all the connections and exchanges, pushing for creative collisions, positive tensions and dynamics to engage fully in innovation, so the culture, climate and environment are vibrant, challenging and exciting.

* We need to constantly seeking the new space from knowledge exploitation and exploration, redefining the organization edges, enlarging and enhancing our understanding, pushing constantly out, constantly evaluating, discovering and aligning growth options and then seeking out those outcomes that potentially offer the right return on innovation

* We need to place learning into the centre, to allow our capability building, new competencies to grow and evolve. We focus on the constant need to provide the mechanisms so as to improved performance and capacities by focusing on both our mental and physical abilities to our position and function to explore and exploit. Each contributes to our ability to receive, hold and absorb new knowledge. We measure these by the increased volume and quality outcomes

* We need new structures, attitudes, investment and motivation to change, to focus on innovation building that needs instilling and coming from the top, not just as a commitment that must happen but integrated and aligned into the strategic thinking and planning, worked through a clear pathway of change to achieve a different, core innovation capability..

* We need to determine the abilities to deliver in effective, focused, efficient and aligned ways. Knowing what is important, seeking out the actions to support and deliver the part needed to achieve the desired goals. Adjusting as we go, as we learn, ramping up what is working, dampening down what is clearly not.

* We need to build innovation by working it continuously,  on making our environment into this more evolving and dynamic one, where the climate and culture of innovation thrive and grows from this constant feeding and attention.

In summary
The more we focus specifically on what makes up our innovation competencies, capabilities and capacities, delivering the dynamic ones that give innovation impact,  the more we are able to comprehend what is important, produce added value and transform from what we have known into what we can see differently, opens us up more into the world of innovation possibilities..

It is developing the skill, knowledge and ability (or capability, capacity and competence) for innovation to deliver on its promise to sustain, grow and provide new value-adding outcomes that take the organization forward and it can no longer be haphazard but systematic and purposeful.

The post Delivering the innovation core: building capability, capacity and competency. first appeared on Building Your Innovation & Ecosystem Intelligence.

Achieving innovation fitness is a journey- to get there we often have to manage the switchbacks as we build our capabilities and capacities to innovate.

1. Getting Started – Understanding the Needs & Imperatives of Innovation Fitness

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

2. The Fuel of Innovation Performance – the dynamics of innovation

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

3. Getting even more specific – quantification and qualification

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

4. Building the Innovation Fitness Machine – reinforcing feedback, identifying needs

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

5. The Strategic Architecture – designing the system to perform as needed

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

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

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

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

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

8. Building and Testing Capabilities to Perform

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

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

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

The end result is looking to generate your fitness landscape

As you can see this is applying a very comprehensive approach, a fairly ‘intensive’ one.  This might alter individually after some clear piloting, learning and experimentation undertaken.  Building innovation capabilities takes time; they are complex, highly structured and multi-dimensional. Any structured approach to tackling innovation takes time and considerable commitment.

The post 9 Stages for building innovation fitness first appeared on Building Your Innovation & Ecosystem Intelligence.

The aim is to relate these to where your organization is in their existing capabilities, where they need to go, in identifying and clarifying the necessary capabilities they need to have, so as to achieve certain strategic goals and then, “we”, together, collectively prioritize the critical ones as ‘must have’ and then set about filling the gaps.

This is the innovative fitness journey needed to be travelled.

The building of those more ‘dynamic’ capabilities and competencies are the ones you need so as to provide for a more dynamic innovation environment and deliver unique capacity for your ongoing strategic goals.

This work is covered off partly on this website but does have its own dedicated site where the articles, post and thinking have been building up over a fairly lengthy period. Go and visit it at www.innovationfitnessdynamics.com.

So let me tell you what this is all about and I will describe this with heavy referencing from Geoffrey Moore’s book “Dealing with Darwin”. Without doubt one of my favourite books in how it helped me piece together a large part of my dynamic innovation fitness puzzle.

First you have the internal view.

Critically, you need to take a fresh look at your internal dynamics, at what happens when core competencies cease to differentiate, how resources must be shifted to new areas, how deeply threatening such changes can be, how protective inertia emerges as the enemy of destabilizing innovation, and finally, what kinds of management responses can best deal with inertia and redirect its energy towards fresh innovation.

This is the inward-facing dilemma that needs to be addressed.

Then you have the External viewpoint

It is about creating a competitive advantage in an increasingly commoditizing world. To lead that effort, you must continually reappraise what role your company is playing in the market ecosystem, how the market landscape of competition is changing and understand where your competitive advantage has come from in the past and where it is likely to come from in the future and with what kinds of differentiation will be most rewarded, and what kinds of innovation are most required.

This is the outward-facing portion of the story.

Then you have that growing sense of observations

Innovation and inertia: we often get stuck in particular types of innovation, promote given skills to the detriment of others, equally necessary but ignored or not understood fully.

We fail to adapt to market changes, we fund to much of one type of innovation to the exclusion of others and in the process create internal traffic jams of sorts, frustrations and tempers to match.

We squander our scarce resources of time, talent and management attention on initiatives that fail to give us a competitive advantage and get constantly impeded by these forces of inertia all around us. Indeed, the more successful we have been in the past, the stronger the resistance to any subsequent change in the innovation course.

Then you have those real-world worries

So what does keep management up at night about their performance on innovation? The rising anxieties stem from that worry that perhaps we are losing our ability to innovate, can our people still compete? Do we really get it? And even if we do, can we still get it to the market place at the right time and feed that need? Can we actually see the light of day?

Then Evolutions can happen

Evolution proceeds more gradually but in times of crisis we are forced to make choices that enable you to step back and reflect. I would argue we are all increasingly facing our own types of crisis in today’s volatile world.

If you were able to achieve an understanding that is based on more informed choice, so you can extract yourself from one path that makes you increasingly vulnerable and provides support to commit to a new core focus, one that offers you a more sustainable competitive position on which to compete through innovation. Would you take this different pathway?

Your task, challenges and keys to unlock your dilemma lie here.

1. The task is to develop a suite of core innovation competencies with proven capability to create (unique) competitive advantage.
2. The challenge for management teams is to choose the type of innovation appropriate to their situation and to exploit it deeply enough to create definitive separation from their direct competitors. This can be completed in different ways but a thorough analysis is recommended
3. The key is to identify and then extract (scarce) resources from (existing) context and re-channel this into the new core that will differentiate you through the new emerging innovation competencies and systemic approach.
4. A real need is to reposition resources and provide focus on the ‘right’ capabilities to meet new challenges knowing your “Innovation Fitness & the Dynamics in the Landscape”

“The sooner you start, the sooner you will be able to extract yourself from the commitments that make you vulnerable and establish those commitments that will strengthen your new position“- Geoffrey A. Moore

Survival of the fittest dominates irrespective.

• We are all caught in this Darwinian race- all of us it seems.
• So where do you want to focus your limited resources? The ‘natural selection’ choice to increase your abilities to innovate linked to your needs.
• Start by mapping out your innovation direction to the tasks and capabilities on hand and those needed or required to get you to certain predefined goals.
• Chose the path that will leverage and expand your knowledge, capabilities and capacities and start the journey.
• Start recognizing the opportunity spaces and gaps when you think you should be heading but feel you might have constraints in moving towards.
• The greater you can identify the need for improving your ‘innovation fitness’ allows you to get closer to accelerating towards the seen and yet unseen opportunities.
• The greater ‘innovation fitness’ equates to more value creation potential.
• As you learn to recognize the difference between managing the existing routines and building the new capabilities, the quicker you can absorb these new learnings within the organization, so they can become the new dynamic routines that are needed.
• You then begin to reduce uncertainties and strengthen the true innovation capabilities you need to thrive and survive in this Darwinian world.

Interested to learn more?

Then simply contact me. I am happy to discuss this and how this can be applied to your organization and what it means in engagement and commitments.

You build progressively the Innovation capabilities and competencies levels to become dynamic and fitter to compete and succeed.

The post Dealing with Your Darwin Effect through Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

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

Recognizing the importance of Dynamic Capabilities

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

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

Appreciating and leveraging those ordinary capabilities is equally essential

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

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

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

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

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

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

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

Understanding all your required capabilities needed is essential

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

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

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

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

The important point though is successful innovation has core elements and processes regardless of industry, form, or type of innovation, we are pursuing.  Much of the difference though is in its varying degree’s based on these core elements.

Our search must be to find those core elements that make up the dynamic capabilities within our innovation activities to leverage and strengthen them. We need to build an organizations ability to innovation continuously, making it a sustaining competence.

We, in our organizations strive to achieve distinct competitive advantage, and innovation is one of those real contribution points this can do this. Achieving competitive advantage is increasingly transient.The need is to make the innovation capabilities and capacities a distinctive, not easy to copy, unique set that continues to be challenged and refreshed to meet the constant changing conditions we find in today’s market .

These capabilities and capacities are shaped by the context and content of innovation and this constantly change by the shifts taking place within the organizations position (market, price, competitive stance) and its choice of evolutionary paths it has decided to take or needs to take.

Innovation needs to be a constant evolutionary path, nothing stands still, it is constantly changing.

Innovation and all its ‘make-up’ is dynamic, it requires this constant evolving. This is an area of serious under-development at present, when you compare this with the continued focus on investing in physical assets or the consistent building of many other skills required within organizations. Yet innovation, the source of fresh growth remains significantly under-invested in, within the majority of organizations. This needs changing.

We need to know what makes up our innovation competencies, capabilities and capacities that give us today’s performance and then we need to decide and focus upon those that will give us a different, more dynamic performance for our future. We can’t stand still, we must look to evolve but lets do this in thoughtful, systematic ways, not in those knee-jerking ways so often seen. We need to know all of what makes up our core.

The post Knowing your innovation core first appeared on Building Your Innovation & Ecosystem Intelligence.

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

The make-up of innovation

I think we all recognize that innovation is made up of both tangible and intangible assets. It is the marriage of these two that makes innovation a unique capability to manage in well-structured ways. It is the people engaged in innovation activity that make it work.

Everything else, the process, structures, technologies and management systems are just the contributing enablers.
The important point though is successful innovation has core elements and processes regardless of industry, form, or type of innovation, we are pursuing.  Much of the difference though is in its varying degree’s based on these core elements.

Our search must be to find those core elements that make up the dynamic capabilities within our innovation activities to leverage and strengthen them. We need to build an organizations ability to innovation continuously, making it a sustaining competence.

We as organizations strive to achieve distinct competitive advantage, and innovation is one of those real contribution points this can do this. The need is to make the innovation capabilities and capacities a distinctive, not easy to copy, unique set.

These are shaped by the context and content of innovation, the organizations position and its choice of evolutionary paths it has decided to take or needs to take.

This is an area of serious under-development at present, when you compare this with the continued focus on investing in physical assets or the consistent building of many other skills required within organizations.

Yet innovation, the source of fresh growth remains significantly under-invested in, within the majority of organizations. This needs changing. Let me put forward my suggestions on why:

Shifting away from the accepted norm

Innovation understanding and building strength in competencies and capabilities takes an organization beyond the accepted norm of managing efficiency, just quality, being responsive and reacting with speed, all challenging within themselves.

Innovation represents today’s competitive advantage statement that should be supported by these other requirements, they become subservient to allow new concepts to meet market needs and exceed customer expectancies.

Within any transition we must avoid dysfunctional consequences and think through why the existing systems and structures do have to ‘fold into’ new innovation based ones.

We need to plan how to do this. Innovation cannot be buried in the established ways of doing things, it needs to lead and drive the engine for new growth and wealth creation. It can’t continue to take a back seat, it needs to take over the wheel.

Organizations need to shift from the one often still found today, of a higher focus on stability, efficiency and effectiveness, looking simply to maximize the short-term for profitability.

This locks then into their current preoccupation with performing routines and formalised structures, as they strive to cut risk and manage the fear of the unknown.

The world is dealing with increasing complexity

The challenge though in today’s world is so different. It is so volatile, potentially disruptive and full of risk. Organizations are simply struggling to shed their clothes of the 20^th century and find a way to smoothly manage into becoming 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 itself and learns, often in the hardest way possible, through failure .

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 require 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 emphasise 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, mould and manage from 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 combination effect that generates the improving performance. Equally, the needs do change over time and you have to constantly ‘refresh, challenge and stimulate’ these, otherwise you can have core rigidly set in.

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 to be the ‘go to’ source of reference. It is a work-in-progress so please recognize this when you visit it here: http://bit.ly/wX5q8R

The need for all of us is to 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.

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

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

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

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

The makeup of innovation

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

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

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

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

The emphasis points needed for dynamic innovation capabilities

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

Distinguishing innovation capabilities that are relevant are based on the type of knowledge they contain. Functional capabilities allow development of technical, practical knowledge. Integrative capabilities allow firms to absorb knowledge from external sources and this is where the absorptive capacity develop comes in. Innovation requires more of a higher-order integrated capability approach to constantly learn, develop, mould and manage multiple capabilities. This required the integration of critical capabilities to successfully stimulate innovation for effective and improving performance.

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

Shifting away from the accepted norm

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

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

Integrating back or making anew

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

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

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

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

Being nimble, flexible for managing across the different domains.

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

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

Ó      PAH 22.02.2012.W-I-P

Paul Hobcraft

Mail to : paul*AT*agilityinnovation.com

www.paul4innovating.com

www.agilityinnovation.com

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The importance is to develop the ability to achieve “new value recognition”in new and different ways.

How do you go about to recognize value when it is not linked to existing thinking?  Absorptive capacity can be a paradox. You require more external knowledge to ‘push’ beyond your existing knowledge learning and so absorbing from it; you are demanding more absorptive capacity to be in place.  Equally you need to combine this with the need to break down that “prior related knowledge” radically differently, so it can stimulate breakthroughs in your thinking. Absorptive Capacity can pose significant challenges to the organization. How you deal effectively with the absorption of knowledge determines it’s potential to be transformed for new innovative ability and this will be determined partly by  how you structure the attractiveness for a learning environment so it ‘takes hold’ and can be absorbed differently, for different needs.

Explaining the key components shown in the above diagram

These components make up the essential elements of a ‘knowledge adoption’ innovation system.

The ‘access capacity’ is the ability to connect and link to external and increasingly international networks of knowledge and innovation. This capacity represents the ability of firms, universities, institutions or individuals to secure benefits through network access, cultivating relationships and being active members. The benefits then can include privileged access to knowledge and information, preferential opportunities and influence. It requires ‘engagement agents’ who can identify sources of knowledge elsewhere; they can be individuals or teams of practitioners. They will require a combination of intellectual, organisational and financial resources to make contacts and diffuse new ideas. A culture of openness and learning is particularly important. Open innovation comes to mind where this should apply.

The ‘anchor capacity’ is about the ability to identify and domesticate external knowledge from people, institutions and firms. While external knowledge flows contribute to local learning, it is the ability to ‘anchor’ these external flows that matters most. Anchoring is the capacity to attract international people, investment and firms to set up in a collaborative form. It is also defined as a process of identifying, attracting and articulating the context between externally mobile knowledge and immobile local context needs. The quality of anchoring will decide the wealth, diversity, intensity and duration of the relationships between external knowledge and local learning within the firm and its ability to absorb and translate this new knowledge. Knowledge anchoring is enhanced by ‘anchoring’ agents, organisations (such as firms and universities) that attract new ideas, technologies or processes from elsewhere and adapt them to their local circumstances. Anchoring activities are often reflected increasingly in business or science parks, and other industrial clusters that form around each other due to mutual reinforcing dependence but also critical advantage. These ‘feed’ into the internal innovation pipeline.

Diffusion capacity is the ability to ‘diffuse knowledge.’ It is the collective ability of a firm to adapt and assimilate new innovations, practices and technologies and then commercialise them in the economy. Diffusion can happen through either ‘active’ or ‘passive’ emulation. The former takes place through activities such as purchases and imports of new patents, technologies or systems. The latter happens through applied learning, reverse engineering or efforts to catch up with the competition. Diffusion is a critical capacity for innovation performance. In open innovation this is the ‘transformation’ from idea to final concept.

The Knowledge Creation & Exploitation part is the ‘Development Capacity’

The development capacity are the components of the innovation knowledge adoption framework. Knowledge creation and exploitation are often understood as start and finish points for innovation. In the past it has been often assume these must take place within a specific context to be successful. However, knowledge creation and knowledge exploitation often happen in different and unexpected places. Developing that awareness, that ‘sense’ of potential is important. ‘Absorptive capacity’ is an important channel of ‘knowledge creation’ and ‘knowledge exploitation’, the two components of the ‘development capacities’ which we now define:

The capacity to ‘create knowledge’ is the ability of a place to generate new ideas, discoveries, designs and inventions. This capacity is often expressed in the production of scientific papers, patents, registered designs and graduates. This capacity can extend horizontally across a broad range of fields and sectors and vertically through specialisation and concentration in specific knowledge domains. A horizontally broad knowledge creation capacity facilitates knowledge absorption from wider fields of knowledge, while a vertically specialised knowledge development capacity gives a region a stronger absorptive capacity in complex domains of knowledge.This capacity, though classified as a ‘development capacity’, is nevertheless critical to any absorptive capacity approach.

The ability to ‘exploit’ knowledge is the general capacity to utilise knowledge for commercial use and to extract value from it. This capacity is about the application of knowledge for practical use. In innovation policy literature, this ability is sometimes referred as the ‘innovation capacity’. In this paper, we consider it only as an innovation output; it is not used to represent all innovation activity. While ‘exploitation’ activities involve the ability to generate new knowledge too, their main aim is ‘knowledge exploitation’ rather than ‘knowledge creation’. Knowledge exploitation requires agents and resources – as well as an entrepreneurial culture – committed to the generation of new social and commercial value from new knowledge. A culture that supports entrepreneurship and risk-taking is often required for a knowledge exploitation capacity to flourish.

Main Source: Extracted and (partly) adapted from the report entitled “Innovation by Adoption”, published by NESTA in October 2008.  The full report was written by Sami Mahroum (NESTA), Rob Huggins (University of Wales Institute in Cardiff), Naomi Clayton (The Work Foundation), Kathy Pain and Peter Taylor (Loughborough University – GaWC).

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