How can we liberate that creative energy we have within our organizations, how can we achieve higher engagement?

How can we learn, share and transform the knowledge that is all around us, simply flooding in? How can we translate the data flowing in with the knowledge insights and innovation outcomes expected? How are we going to unleash the creativity that goes with new knowledge?

We need to actively encourage connected minds for value-creating opportunities and knowledge sharing for innovation to flow right across the organization. All the raw data needs connected and engaged minds.

“For this, we need to think about installing a modern engagement platform that has the knowledge and learning as its beating heart”

Why do we need to build this modern engagement platform? Big Data is knocking on your door.

We need increased capacity to ‘listen and capture’ understanding. We need to deploy some filtering and analytics as ‘big data’ becomes increasingly part of our organization’s lives. We need to go beyond analytics.

“We urgently need a system of absorbing and translating data’s raw power to turn these into measurable innovation outcomes”.

We need a structured system where we manage any absorption of data through its different stages of translation into valuable knowledge, to see its potential and then to realize the (new) value out of it for new innovation outcomes.

With all this new data flowing in, you need to turn it into valuable knowledge by capturing all the interactions, offering search and discovery services, organising different events and scenario management and be able to retrace the interaction history. We need to think beyond just data discovery.

“We need to equally build a knowledge-sharing system and this will require as much a robust technology solution as at the raw data front end structured on a scalable learning approach”.

We need to find ways to merge data and information to turn this into ‘actionable’ knowledge and eventual valuable new innovation. We do need to think harder about building beyond analytics into these engagement platforms.

It is here you actually mine the raw knowledge and transform it. We need to absorb in our organization’s capabilities or we will simply overload them with just data.

We need to shift from scalable efficiency to scalable learning.

Firstly and most important for me, is our need to understand the building of learning and experiences through the Absorptive Capacity framework as I think it will have an increasingly valuable part to play in managing data, information and knowledge going forward.

A fair time back two researchers, Cohen and Levinthal (1990) pioneered the concept of absorptive capacity, further defined as the ability of an organization to identify, value, assimilate, and apply new knowledge.

Since their 1990 publication, the concept has been further developed and given rise to many thousands of published papers on this subject.

The value of absorptive capacity is that when organizations have some prior knowledge and awareness they are more receptive to adding new understandings and new ideas. They can build better value from not just the knowledge but the structured application of it.

“As ‘big data’ grows we need to move from potential to realized outcomes”

Organizations that encourage and set about learning consciously and consistently will set about the search for the new ideas coming from all the incoming sources by having this already established learning structure in place. They are far more likely to better recognize new ideas that might lead to innovation.

Exploiting our learning requires framing

I would suggest those organizations that exploit the Adaptive Capacity framework are more likely to develop a deeper understanding of integrating, exploiting and experimenting with any new knowledge. Then they are in that ‘better’ shape to set about placing the data and knowledge gained into a new setting, framing new concepts or hypotheses, to push this knowledge forward into new innovation.

“We need a structure where we are constantly, consciously advancing learning, extracting its value, turning this into valuable new potential and successful innovation outcomes.”

This gaining of continuous knowledge encourages constant learning and this has a positive feedback cycle as it builds the capacities and capabilities for future innovation activity for the increased potential for new value.

Absorptive capacity, once recognized and established as a system, promotes the search for new knowledge that greatly increases the capacity to make the necessary new connections for new innovation to happen.

The ability within our knowledge gathering needs a continuous focus and methodology of approach.

For this to happen, it does need continuous focus, we need to build greater absorption capacity. If organizations take the alternative route of wanting to squeeze every last drop out of the existing innovation activity or research department, organizations over time develop as bad learners, they begin to ignore, assume they have the knowledge and get fixed in their mindsets.

They totally rely on data and don’t apply their knowledge and they fail to translate this into meaningful outcomes.

Those that fail to seek out and absorb, will certainly tend to reject faster and increasingly adopt the “not invented here” syndrome. That can only last for a limited time before ‘innovation decay’ and ‘data overload’ do set in, people become frustrated and finally give up and leave, and when they do just remember all their knowledge goes with them also.

“There is a real risk that all the incoming data can be totally overwhelming, we need to structure a learning system to absorb, exploit and translate for measurable innovation outcomes”

In managing new innovation outcomes we need to apply absorptive capacity as a learning framework

We certainly understand that today innovation is not confined to the walls of one particular company. The world ‘absorbs’ more innovation than we can turn into greater value but we need to attempt to capture this and see if and where its value might lie.

If we agree that most innovations happen outside often self-imposed boundaries then we have to extend outside all our existing boundaries and go beyond. We have to open up our organizations and collective minds to draw in the knowledge so as to allow it to reside, circulate and be translated into new forms of understanding.

Absorptive capacities give us the system on which we can encourage the gathering, understanding and translation of knowledge. It underpins engagement and also helps manage the ‘raw knowledge data’ that needs transforming. We all need to be able to have ‘syncing’ capabilities of learning.

We need a system to capture and allow knowledge to flow, and a strong absorptive capacity has three main outputs which result from the flow of external or distributed knowledge that is allowed to flow internally.

“With the creation of new knowledge and insights, these can create new innovation that then leads to new economic and social value”

Achieving a clear engagement platform for all to gain from

So in our need to achieve a greater engagement from everyone within our organizations we need to recognize the importance of having a ‘modern’ engagement platform available, a central place for scalable learning to take place so we can structure the new knowledge and insights coming into the organization.

As we increasingly need to engage, where outside knowledge combines with our internal understanding and needs, then we do need to think about scalable learning to anchor and then diffuse new knowledge into potentially more valuable innovation outcomes that are measurable and linked back through the learning cycle.

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We can ‘fall over these ideas’ or we can find ideas or concepts through explicit search. Then to translate these and turn them into something new and different we need to have established some sort of diffusion and dissemination processes.

Having this established as a sustaining system provides an essential source to building organizations capabilities and competencies.

The more we work external knowledge the more we potentially enhance and multiply its value from a single idea into the potentials for multiple innovations. Having a systematic framework can be dramatic for generating new knowledge and gathering ideas for new innovation potential.

Throughout this post I’ll link into previous posts that you might like to explore but this is not necessary.

The issue is how we set about adopting and adapting new knowledge.

Each organization we work within collects its knowledge in different ways. Each has special characteristics, systems and ways to set about doing this. Often finding the knowledge is highly random. Many cases the knowledge we are searching for already resides in the organization, sometimes when we go outside we find one of the paths of this knowledge actually leads back inside our own organization. When this happens it leaves us puzzled on how and why this happens.

A long time back two researcher, Cohen and Levinthal (1990) pioneered the concept of absorptive capacity, further defined as the ability of an organization to identify, value, assimilate, and apply new knowledge. Since their 1990 publication, the concept has been further developed and given rise to many thousands of published papers around this subject.

 The value of absorptive capacity is that when organizations have some prior knowledge they are more receptive to adding new understandings and new ideas.

Organizations that encourage and set about learning consciously set about the search for new ideas and by having this already established ‘learning’ are far better at recognizing new ideas that might lead to innovation.

These organizations develop deeper understanding of integrating and experimenting this new knowledge and set about placing it in a new setting, concept or hypothesis, to push this knowledge forward into new innovation. They are consciously advancing learning.

This gaining of continuous knowledge encourages constant learning and this has a positive feedback cycle as it builds the capacities and capabilities for future innovation activity. Absorptive capacity, once recognized and established as a system promotes the search for new knowledge that greatly increases the capacity to make the necessary new connections for new innovation to happen.

For this to happen, it does need continuous focus. If organizations take the alternative route of wanting to squeeze every last drop out of the existing innovation activity or research department, organizations over time develop as bad learners, they begin to ignore, to assume they have the knowledge and get fixed in their mind sets. They fail to absorb, they tend to reject and take on increasingly that “not invented here” syndrome. That can only last for a limited time before ‘innovation decay’ sets in, people leave and the knowledge often goes with them also.

The problem also can lie in too much knowledge

The other vital part of understanding absorptive capacity is its terrific benefits for diffusion and dissemination of ideas. As the knowledge we glean from outside comes inside it can confront, it can challenge the “what we know”. It is at these times we must stop the initial reaction of “let’s reject this” and allow time for a deeper evaluation, making sense from this different perspective. Looking through alternative lenses helps here.

Organizations are always in a hurry. They design innovation pipelines to get narrower and narrower. They want to quickly dismiss ideas that don’t fit in their norm, the system is poorly equipped to handle different, more challenging thinking, yet this is the very place radical, breakthrough and disruptive innovation ‘sits’. Organizations must find better ways to resist allowing knowledge pathways to become narrower before the knowledge, insights and potential connections have been well absorbed.

Allowing a greater access to new sources of knowledge, discussing emerging innovation concepts by diffusing the understanding does allows for increasing those ‘real’ connections where something really different beyond the existing can be shared as emerging.

It is allowing the absorptive capacities to fully work through the knowledge gained, to improve your capacities. Providing innovation and your ideas and concepts extended time, you can provide for different connection points for exploiting innovation impact even more. If you allow for this additional time to explore and discuss specifically in the search for those more radical connections and outcomes, you have the potential for far more.

We do need to allow knowledge inside our organizations to flow more openly

We need to stop the ‘cognitive blinders’ that constraints the diversity of opinion by allowing concepts or knowledge to be more broadly seen and worked upon, shared more openly. Make innovation far more open inside the organization as well as outside. Practice a more ‘holistic’ open innovation is highly valuable for pushing beyond the current incremental approaches, simply because knowledge is only residing with a few chosen people. We do need to avoid all the cognitive traps around.

Let’s really adopt open innovation, internally as well as externally. It is allowing not just new knowledge in but to allow this new knowledge to flow and be absorbed and then can be better translated into new application or worth. There are significant roadblocks within open innovation today that need resolution.

The art of harnessing knowledge lies in our intellectual capital

When we are chasing after new growth we do need to employ all our capitals. Today the dominant capital is financial, it rules the others and that stifles knowledge, innovation and the potential for being different. Financial capital tends to be based on past numbers or immediate concerns, it struggles with the future. It wants to reduce time, risk, inefficiencies and replace this with always improving the rate of return on the financial capital.

We need to think about a better way to judge ‘rate of return’ and that should be on recognizing the critical importance of the other capitals, those that make up the intellectual capitals. Broadly these fall into human, structural and relationships. They are the capitals that make up the value and provide the new generating value that are embedded in the personnel, organizational routines, and network relationships. They provide fresh capital through innovation and strategic renewal.

There is an incredible set of connections between all the parts of intellectual capital, absorptive capacity and knowledge that make for new innovation and give us the real chance of value creation. I’ll discuss this set of connections further in a subsequent post.

Thankfully some organizations are becoming enlightened

Knowledge and Innovation are engaged at the ‘hip’, they are inseparable. To separate them both would die, one feeds the other. It is through the application of approaching them through a system like absorptive capacity you can generate the flows needed to keep our search for new ideas stimulated, our innovations pushing forward and allowing others to benefit and build on this knowledge further.

If you have not considered the place for absorptive capacity and its value, it is high time you did. It might be your missing link.

The post Absorptive Capacity, Knowledge Management and Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

The more our firms do not expand, the lower the innovation productivity rate. The lower the productivity rate, the tougher it becomes to improve standards of living, boost skills, deepen capabilities, keep competitive and find those more distinctive new products to grow the market before competitors do.

Innovation productivity actually raises the competitive game

Innovation productivity is actually a sustaining engine for wealth and job creation surprisingly. The more you improve speed, efficiency and scale you attract others to adopt similar approaches.

The rise in productivity happens when others adopt improved ways to equally compete, the benefits start to spread and this drives innovation productivity.

It goes: the more efficient we become, the more effective and that leads to increased innovation opportunities.
Innovative capacity
There is a need to build the capacity to drive productivity. We must recognize that the demographic footprints within our societies are already embedded in the ground; there is not enough resource to generate substantial economic growth longer term.

One way to counter this is ensuring constant innovation productivity. We need to keep innovation productivity constantly in our plans to help offset this looming problem.

Can you also imagine if the global economic pie is not set for expanding then the whole environment for competition stagnates?  The more stagnation, then there is less incentive to upgrade, to (re)invest, to optimise and improve.

The knock-on consequences of this potential stagnation
There are three parts to increasing innovation productivity. If these do not happen it has a knock-on effect that reduces the greater job creation possibilities.

It also lets others in that decide this is the time to invest. The three inter-related aspects, if you don’t invest, are:

1. You limit entry into higher value activities- although this is mostly determined by the markets themselves, if there is no new innovations investments coming through then you limit growth opportunities.
2.   If upgrading stops, this affects industries that might already be vulnerable to downturns and disruption. It can reduce the market as competing enterprises can go out of business. Clearly some of this ‘shake out’ is not so bad and even welcomed but as we compete more globally than ever today and any delays in investing in innovation productivity can be fatal, as others seize the opportunity while you are consolidating your position.
3. You certainly can stop the upgrading of the skills and creative potential of individuals if you reduce your economic activity and cut back. Training investment dollars tend to be one of the first places to be hit the hardest. This ‘false economy’ steps you further back in the potential to raise your game when the better times return, as you are less equipped to respond.

Actively reducing innovation productivity often stops new process innovation to take place. Innovations that are more process driven, as against product-driven, usually offer a higher value, as it is the technology related components, for instance, that gives complexity and lead to the potential for a higher value than pure product alone. Process-driven innovation can add significant value.

Innovation requires competition.

To obtain certain innovation vitality there needs to be active competition. That is why the USA is still such a power house. With its size of internal domestic market as well as its innovation reputation and reach out into the world it is a formidable competitor.

What it must do, the same as the countries in Europe, is to keep investing so as it keeps ahead of the curve. Investing in start ups, urging entrepreneurial investment is a good present focal point but it is the sustaining ability within our larger firms to invest that provide the real value-adding wealth that we require to sustain our competitive positions and provide continued security for the economy to grow.

Innovation involves often a very complex process. It is increasingly occurring through diverse and often non-linear pathways, the connections and networks we explore.

The greater the intensity of these networks and connections, the higher innovation productivity potential we have. If we stop investing on one, it has a knock-on effect on the other.

Outlining an Innovation Productivity Agenda- some broad themes to investigate and explore.

• The productivity economy will reward the ‘do-it-smarter’ companies that build a better business model and the innovative processes to fit. It is finding the marketable ways to ‘do-it-smarter’ along with the most transformative business models that will win.
• Innovation is a disruptive process increasingly. Just think about the book industry or newspapers and all its competitors. Exploring multiple productivity options by learning what reduces costs provides a promise to improve outcomes significantly.
• Companies need to have higher concentration of knowledge workers and need to seek ways where they can achieve returns per employee. As a rule of thumb around three times higher than those companies with fewer knowledge workers gives substantial competitive edge.
• There needs to be increasingly intense focus on consumers more than ever, not just simply producing what was good in the past. Goods have value only when consumers want them. The market conditions are rapidly changing and this has significant implications to productivity and installed capacities. Stay alert and seek out ways to be more flexible.
• The constant quest for adding service into your product innovation mix will continue to push and extend the need for different thinking. The increasing of value and possible lock in has real potential to explore, more in today’s circumstances than ever.
• Seeking out of transformational process flows needs a global search. Finding these, often ones that are within other industries will potentially unlock new kinds of productivity that others can only copy and simply chase to catch up. Being proactive in this search is incredibly valuable and can lead to redefining how value is delivered.
• The continued push for less regulation will remove some of the present barriers to entry across a global market. This is sometimes a double edged sword and again has its needs to think through of where to invest to raise productivity to keep competing in changed circumstances and different market conditions.
• The increasing competitive pressures today drive productivity activities to look even harder at adopting best practices; this also has its dangers as you are often simply just catching up. You need to look beyond current practices and seek out emerging practices to really get ahead for achieving better potential from innovation productivity investments.
• A final productivity driver will be something all companies need to create, in bucket loads, information and knowledge; that is useful, practical and insightful, to keep being increasingly aware and productive in understanding and exploring experimentation and learn from.

This is the time to actually invest

Investing in innovation productivity is critical. What matters today is the value you can create with a day of work; tomorrow’s productivity is the future innovation capacity investments made that can allow you to not just survive, but even thrive in tough times.

The post Dampening down Innovation Productivity risks first appeared on Building Your Innovation & Ecosystem Intelligence.