What has been changing in how we approach innovation, and have we taken the opportunity to radically revise the innovation system and process accordingly?

Many of our innovative approaches or systems are based on very often just an internal perspective, restricted in available resources and limited knowledge and insights, often constraining the evolving new solutions and then limiting the impact and outcome.

For many years open innovation has been encouraged to be adopted to break out of this very narrow internal focus. Having a real diversity of opinion with this greater access to different knowledge and experiences does open up our thinking, but it is, on its own, not enough to make a real difference, especially in times of acute change. We need to put to use a different innovation model or approach.

We are at the cusp or already into significant changes to how the world, society and we as individuals will manage or engage going into the future.

This is my second post discussing the belief that we are being to see a real contagion breaking down how we have been operating and living in the world.

We are facing the potential of unprecedented change, and we need to recognize how a different approach to innovation can help offset or mitigate many of the destabilizing aspects and provide a pathway to managing differently in a new environment that will inevitably come from this contagion.

In my first post.” the fear of business contagion required different innovation response.” I focused briefly on the four interlocking conditions.

These interlocking conditions are prompting this potential shift in our approaches to undertaking business, how we engage with government and institutions, our place in society and where we as individuals can adjust and thrive in a different environment we will be facing.

I argue how we undertake our innovation in this significant new set of conditions needs changing.

Our ability to perform differently will provide new avenues of innovation discovery and eventual value to offset or bridge the need to make a change we will be forced to make in these different market and society conditions.

The four interwoven catalysts to approaching innovation are discussed here.

These do not stand alone, they make up the new strength within the fabric of innovation management, hence my interwoven application.

The four interwoven catalysts are recognizing we are moving from complicated to complex; we have different collaboration tools to be more agile and adapt, we need to adopt a clearer mindset to working in innovation ecosystems, and we need to leverage the digital transformation we have been undertaking.

Let me explain these a little more for the remainder of this post.

Moving from complicated to complex.

We have seen, over time, that much of what seemed simply complicated has increasingly become complex. We need a new innovation approach, it is intrinsic to achieve and find solutions to these complex problems outside just what we know. There are so many connected parts that one individual person or entity simply cannot find the right answers; they need to seek out others to complete the map and connect the parts.

Recognizing complex acknowledges the volatility and disruptions that are constantly occurring. There are many interconnected (constantly moving) parts. We often need to approach change in a non-linear fashion as no recognized patterns or present system approaches or behaviours work. The need is for a very fluid, dynamic, constantly evolving approach to design and solutions. Knowledge flows are constantly changing and often surprise us and need adaption to what this means. Systems today need to be designed to be self-driven in design, which needs us to often simply let go but carefully orchestrate such an adaptive thinking approach.

Connecting up and Deploying Collaboration Tools

To achieve a fluid, dynamic design in any new innovation solution recognizes our growing reliance on different collaboration tools. These are known and adopted in many organizations today but must be valued as the backbone of any new innovation collaborative system. To apply these effectively across multiple organizations, we must talk the same common language of understanding and approach.

These tools are lean and agile, design thinking, rapid experimentation and prototyping approaches, accelerate and elevate innovation hacks, engagement in crowdsourcing approaches and deploying our limited resources in dedicated “living” labs that seek out partners that have a commonality and shared ethos to what innovation can provide in impact and value to challenges and complexities. It is the ability to “string together” and leverage the different collaboration tools to maximise innovation discovery and execution.

To break down the complexity, you need to be highly collaborative

Complex problems are typically defined as those that include the ability to approach them from multiple, sometimes competing, perspectives and which may have multiple possible solutions.

I suggest this as a way of thinking through the complexity as a building block*

Peter Sjulstad wrote this* to break down complex problems and offer a very extended version. I have taken my own simplified approach to his suggested ways to make complexity simpler.

• Understand the problem or build your understanding up of its often diverse parts. ..
• Break things apart to see what can work or connect to other complex parts..
• Break the problem into sub-problems or sub-systems so solutions can be scoped, validated and tested as contributions to a new solution. …
• Break the problem into requirements and allocate those out to the best possible providers of solution experts. ..
• Figure out what is known and what is unknown and keep working on appreciating the differences and moving the unknown, once discovered across into the known, to work upon new solutions. …
• Break it down into flows so the multiple parts can do exactly that, flow and fit together. …
• Break it into different places, so you leverage the diversity and environment that might have the best chance to tackle that part of the complexity. ..
• Break it into different people as diversity in experience, knowledge and expertise all bring different dimensions to finding the solutions.

Working in innovation ecosystems

Today we promote innovation ecosystems, they extend the open innovation thinking further. They coalesce across innovation partners and innovation centres and seek to work with start-ups and established companies, focusing on a market activity that provides insights and knowledge.

Ecosystems accelerate learning and innovation; the organisms associated influence each other and shape the terrain of discovery can combine to offer a profound shift in business landscape potential, attract further resources to tap into, and harness the creativity and intelligence of all within the ecosystem.

We need to question differently and often the “why change?” and “what can be gained?” and need to encourage activism to “collide and build”, to “network and engage”, and “relationship builds” around a common purpose and desire.

I wrote this, and it might have value to read: “are you ready to thrive in a world of innovation ecosystems?” I wrote in summary:

“Ecosystem thinking (combined with platform management) has a very transforming effect. It opens us up to a highly fluid, changing world of possibilities. It can help you match and possibly get ahead of all the volatility swirling around us. We can develop strategies and innovations that keep pace as we connect with a broader community.”

I believe ecosystems are the new organism of the business world. We need to explore these increasingly in their design and management potential through increased platform moanagement.

Digital transformation will keep pushing us to become more efficient and effective but also enable us to become more adroit and innovative. We will need to take a ‘dual’ mindset to constantly balance these often conflicting tensions to harness all the different power sources of digital and structure the business and organization accordingly.

Digital enables so much, but it can build the relationship mechanism with customers, which is vitally important in times of volatility.

We are all aware (or should be) that customers are increasingly choosing products and services based on the quality of the experiences they have with them; digital connections help inform and determine positioning and appeal.

The pressing need is to address a competitive risk if you are not mapping and understanding the channels, touchpoints and shifts taking place in technology solutions that capture, evaluate and determine customer experience. In any contagion environment, we need to know the points of value to bring new innovative solutions into the marketplace to overcome these shifts in behaviour and need.

You need to ask, can digital transformation help you meet your customer needs, do you fully understand their motivations and associated behaviours to design a better range of innovative solutions? It is through a digital transformation we can make the connections tangible, achieve relevancy and provide a new difference that is “seen” to bridge needs and gaps found in often rapidly changing market conditions.

Digital transformation can build all the connecting points in a value chain, deploy the technology needed (on platforms and through the ecosystem), and give what I call “the connected fitness”.  Data today is more relevant the closer it is to its point of creation.

A digital environment enables human and artificial intelligence to combine in new, exciting ways to give innovation a completely different dimension.

The journey of discovery is the digital transformation one we all are undertaking.

Digital transformation and maturity must be understood through the lens of business focus, prioritising investments and defining success. It knows what outcomes you wish to achieve will help enable that transformation process, but this is not a “static” process; it is dynamic, highly interactive, and our ability to listen intently, interpret and learn, so we all evolve along the journey of digital discovery is vital.

The four interwoven catalysts to approaching innovation are our way to deploy and offset business contagion through new innovative approaches.

As I said in opening this post, these four do not stand alone, they make up the new (underlying) strength within the fabric of innovation management, hence my interwoven application.

The four interwoven catalysts are recognizing we are moving from complicated to complex; we have different collaboration tools to be more agile and adapt, we need to adopt a clearer mindset to working in innovation ecosystems, and we need to leverage the digital transformation we have been undertaking.

As I opened in my first post: “the fear of business contagion requires different innovation response.”

In summary

We are presently facing a profound set of changes in the conditions that businesses operate within the immediate years ahead, that of the fear of business contagion; these will need a different set of innovation shifts and responses to counter this and seize new opportunities.

In these two posts together, I have offered my view of the four interlocking contagion points and the different four interwoven catalysts to approaching innovation differently in this changing and highly challenging environment that is ahead of us.

The post New innovation approaches to counter the fear of Business Contagion first appeared on Building Your Innovation & Ecosystem Intelligence.

We are presently facing a profound set of changes in the conditions that businesses operate within the immediate years ahead, that of the fear of business contagion; these will need a different set of innovation shifts and responses to counter this and seize new opportunities.

Over two posts, I want to lay out the underlying concerns (here) and the new dynamics we can deploy by changing how we undertake innovation as my second post.

This first post discusses what is changing, and there is a growing argument in what I am seeing that we are facing one of those contagion periods where one set of conditions is triggering another, followed by another.

The four interlocking conditions

The economic and political conditions we seem to be facing of global uncertainties are triggering a profound shift in the social conditions and causing personal shifts we are all undertaking, and that will have an intense shift for business to adapt and react to.

Let’s take these separately and how these when combined, will require a very different innovation mindset in the coming months and years.

Economic and Political Conditions

The growing level of international tensions and global conflicts are already impacting our supply chains. The growing uncertainties are triggering the fears of global and local recessions and the spectre of rising inflation to levels not seen for many years and outside of many people’s personal experiences. The shifts will change how each country and company compete. Volatility and extremes will become more commonplace and require a different reaction time and response.

The ability to pass on inflation or be agile in supply response to sudden shortages will need very different agility than ever before. Decisions will need to be closer to the point of ‘conflict’ and certainly more local. Waiting for decisions will lead to lost opportunities. Adaptivity in changing conditions will increase rewards but bring more risk and exposure. This changing dynamic flows through into the other conditions.

Social conditions

The social conditions are pointing to rising levels of instability and unrest. As rising prices are seen not just in essentials (food, energy, stable items and services) but in items we have taken for granted (airfares, travel, well-being, clothing) and our accepted needs of everyday life (technology, fuel, water, heating), we become confronted and begin to react, in anger, despair and needed support. This presents a very different fluid environment and has a knock-on effect; we quickly relate and identify with others facing their changing conditions. We suddenly see very different “network effects” that have social consequences and impacts.

To counter this sudden shifting of social conditions, innovation needs to adopt a broader view of adapting to changing needs. Being agile and responsive becomes central to seeing opportunity gaps quicker and responding in socially aware ways. Rising demand for change becomes a new normal.

Personal Shifts

The “needs-driven” becomes dominant. Expectations rapidly change, and a new approach to governance and questioning takes place. In a world where the vast majority are always connected and aware of their immediate surroundings (at least), new skills and learning suddenly kick in.

Knowledge adoption and awareness become higher in personal needs. Innovation takes on new twists. It will utilise the digital tools we have at our disposal to shape our opinions, assumptions and attitudes to be highly aware and adaptive. Where is the job opportunity to seize, where do I go to save costs or reduce my money outlay, what decisions do I need to make to reduce my costs, adjust my living conditions and find different ways to extract value and achieve a return in a diminishing set of market conditions.

The profound shifts needed in business to adapt

Change brings complicated challenges. The more complex the business, in its hierarchy, making decisions, and managing its local and global network will lead to a different set of operational disruptions. Risk-taking rises in need. The need is to break out of past or present traditional boundaries and borders to capitalize on the new innovation potential of opportunity seizing.

The value of agility, flexibility, knowledge awareness and rapid diffusion of (new) solutions to meet these changing operating conditions and seize upon “breaking opportunities.” adds increased complexity, highly disruptive to today’s accepted view of “effectiveness and efficiency” but gets rewarded in this ability to perform differently, responding to changing market and societal needs.

All of these conditions are the triggers for wholesale change.

You simply adapt or die. Contagion, by definition here, is in its economics and financial effect. Contagion can be explained as a situation where a shock or series of shocks spreads out and affects others that trigger a crisis. We have built up such an interdependence; when contagion happens, it spreads quickly and unexpectedly.

The role of innovation suddenly changes.

I have written consistently about risk and innovation. We do need to revisit our appetite for risk, we need to reflect on a return differently. Perhaps this three-part primer on risk has value here to begin to rethink innovation and its need to be adapted and respond to a different world ahead of us.

In a three-part series, part one outlined the implicit need to align innovation to the corporate strategy, and through this, we can determine ‘acceptable risk’.

In part two, I offered numerous reasons why we should recognize and treat innovation risk differently to allow it to perform closer to its promise of driving growth and achieving real advantage.

In the third and last part, part three, where I lay out different mechanisms and framing of risk and innovation. These need to be evolved to fit your own risk appetite, not one size fits all. I hope it helps.

I believe we need to explore the new dynamics we can deploy by changing how we undertake innovation.

Moving from the triggering conditions, my next post explores the changes around innovation we can move towards to adapt to the new environment we face today and in the future. I have optimism that innovation can be an even greater catalyst in times of significant change.

I will be looking at issues such as moving from complicated to complex; we have different collaboration tools to be more agile and adapt, we need to adopt a clearer mindset to working in innovation ecosystems, and we need to leverage the digital transformation we have been undertaking.

It is our ability to perform differently has always been a high mark of innovation, often not well understood at senior management levels.

This very nature of leveraging the conditions needed for innovation across the organization can lead a business into a new era of innovation opportunity- that carpe diem instinct which is in all of us, I believe we will need to!

The post The fear of business contagion requires different innovation response first appeared on Building Your Innovation & Ecosystem Intelligence.

All companies talk about innovation and its growing importance, but why is it that still so few succeed in actually doing it on a repeatable scale?

What inhibits innovation? What would drive innovation success? What aspects of innovation are critical to achieving such innovative growth? Where should a company place its emphasis to gain both an improving impact on its performance and strengthen its innovation capabilities?

The difficulty for many is that innovation is a complex process that has many intangibles within the total mix to manage. Management today is far happier managing the ‘harder’ aspects of business, the current physical ones of everyday organization, not the ‘softer’ more intangible ones, where innovation often lies or emerges from.

There are many variables or factors for ‘innovation success’; organisations often suffer from the inability to sustain innovation over time. There is a failure to fully appreciate or recognize that many interdependencies surround innovation. Often, ‘selective’ activities only generate limited success but sustaining innovation is often elusive without a more comprehensive, holistic approach.

If we take the view: that “Innovation is holistic in nature, it needs to be addressed in this way. It covers the entire range of activities necessary to provide customer value and a satisfactory return to the business. Although innovation cannot be touched, heard, tasted or seen, it can be felt. It is probably best described as a pervasive attitude that allows businesses to see beyond the present and create the future. In short, innovation is the engine of change and in today’s fiercely competitive environment resisting change is dangerous.

The key driver of the organization’s ability to change is innovation. However, deciding that the organization has to be innovative is insufficient. That decision must be backed by actions that create an environment where people are so comfortable with innovation that they  are naturally looking to create it.”

There are so many challenges in managing innovation.

The key is knowing what are the critical factors for your innovation activities and their dependencies for sustaining innovation success? Identifying these is becoming a vital necessity to understand so an organization can place the appropriate resources behind them and continue to invest in the evolving aspects associated with these capabilities and competencies.

The question is, which are critical, which naturally occur when others begin to be put into place, and which seem to have limited or no real effect on changing the dynamics of innovation? Knowing these and having these clearer shown as a ‘return on impact/investment’ (ROII) has real business value.

Today, we lack a clear system model that brings the critical innovation factors out and gives them their appropriate values, and then can equally provide the ability to model different future states and conceive future scenarios through different impact investments.

Innovation is still not treated company-wide in a holistic way as recognising the dependencies is poorly understood. This is what needs to change.

It is the issue of ‘rapid change’ that calls for more dynamic capabilities

The world of innovation-based competition, price/performance rivalry, increasing returns, and the ‘creative destruction of existing competencies constitutes rapid change are all rapid and changing constantly, and we need the ability to respond, be agile and fluid to seize the new business opportunities that come with this evolving environment.

How do you sustain innovation, is it more through the structuring of everyday work, by creating a particular set of social rules and resources that foster specific routines or is it in creating greater specialization or competencies 100% dedicated to building a robust innovation system?

What are the firm-specific capabilities that can be sources of advantage, and how can combinations of competencies and resources be developed, deployed, nurtured and protected?  These need to be difficult-to-imitate combinations and integrative enough to give new sources of competitive advantage to stimulate new growth and financial return; we need a structured pathway.

So what are the challenges of the knowledge-driven economy that innovation needs to drive?

They are increasing new characteristics of markets that are constantly changing, product life cycles are shortening, and knowledge is consolidating, which leads to additional competitiveness from firms. We need to address:

1. New types of innovation are taking different forms to address these changing circumstances (product, technology-led, service, business model, process and operational driven, open, in design thinking, needs relating, research-driven and in marketing and extending existing products in different ways.
2. New needs of combining different stakeholders are pushing higher expectations to get winning products or services to market on time, which are exciting, new, engaging and often transformational. This calls for new ways of collaborative working.
3. New approaches to innovation management that encompass efficiently and continuously innovating working together have become the prime driver for achieving both top-line innovation growth and bottom-line efficiency, the two main challenges facing business today but needing this combining and blending of innovation and efficiency through new, effective ways.
4. New technology innovation is prompting firms to access and implement the most appropriate technology according to their need, often to simply keep competitive. There is this need to distinguish between sustaining and disruptive aspects as technology constantly changes.
5. Also, pressures from both customers and shareholders often influence where firms engage and with appropriate technology, but it is increasingly disruptive and disturbing to the existing structures and systems. Building a more responsive, adaptive organization open to exploration and adoption is critical to move towards.
6. A continuous need for switching and investing in different innovation management tools, not just technological ones but relational tools in the way of doing business and achieving insight. The important part of any adoption of new tools, techniques, methods or processes you need to understand the consequences and to do that, you need dedicated resources capable of interpreting the potential impact and value.

Shifting our thinking into a more dynamic frame becomes essential today

Innovation understanding and building strength in competencies and capabilities take an organization beyond the accepted norm of managing efficiency, quality, responsiveness, and speed- all challenging within themselves.

We need both the internal and external orientation to innovation and build a real “sense and respond” set of capabilities.

Innovation represents today’s competitive advantage statement that should be supported throughout the organization. The issue is knowing the valued dynamic capabilities needed to deliver innovation with real business value.

There are countless challenges to adapting and becoming fitter to innovate. Fitness comes from a deeper understanding of the parts that make innovation up. These are far from static; they are dynamic and constantly changing. You must provide an adaptive organization to manage these and many more than the abovementioned areas.

The emphasis points towards the need for defining the dynamic innovation capabilities required.

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 the development of technical, practical knowledge. Integrative capabilities allow firms to absorb knowledge from external sources, where absorptive capacity development 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.

Innovation is core in any business that wants a future.

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 degrees based on these core elements.

My search is to find those core elements to leverage and strengthen the dynamic capabilities within an organization’s capability to innovate continuously in a sustaining manner.

We as organizations strive to achieve a distinct competitive advantage, and innovation is one of those real contribution points this can achieve. 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 organization’s position and its choice of evolutionary paths it has decided to take or needs to take.

So individual components on their own have limited effect, it is the combined effect that generates the improving performance. Equally, the needs do change over time, and you have to constantly ‘refresh, challenge and stimulate’ these otherwise, you can have core rigidly set in.

The solution, I firmly believe,  is a framework that shows the mutual dependencies, how the innovation ‘system’ behaves, what are its more important impact factors which are weaker and what should be considered in the ‘best’ innovation environment?

I will explore my suggested model in subsequent posts. This builds, as introduced here, a dynamic environment that responds and adapts to the required innovation needs.

The post Innovation requires a more dynamic systematic approach first appeared on Building Your Innovation & Ecosystem Intelligence.

This needs to be complementary, synergistic, clarifying and building new intersections of opportunity

The value-adding impact and business model needs to be central

The need is the bringing together of many strands of thinking, ideally in a “living and dynamic” designed way”

Aspiring to achieve

*Innovation touch and value maps

*Evolving constantly over time in ecosystem design thinking

*Building out the dynamic environment

* Structuring the activities in a Landscape journey

*Making it a sustaining one

Until we understand the scope and impact of innovation, we can’t fully grasp the nature and the amount of change that innovation can unleash

@paul4innovating.

We need to cover the breadth,depth and scope of all innovation possibilities

It is the ability to seeing patterns, synergies and different connections that give us new avenues of convergence and value

We need a distributed, interconnected and networked environment

Agility Innovation

Recombining offers or concepts offers greater value creation in the short term but it is the ability to look out and see a different future will bring the higher value returns that innovation aspires too

We need to look to build Dynamic Innovation Ecosystems and radicially different Business Models to change the nature of innovation discovery, validation and implementation.

Paul Hobcraft

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Applying the three horizon framework to innovation and change

I will always recommend this three horizon framework for shaping innovation. So much of our need to think about innovation is about managing differently the today, the tomorrow and the future, these need to be thought through in very distinct ways, to clarify the innovation levels of intensity, resources and outcomes required.

To explain the impacts of innovation and the change it creates, we’ll use an accepted framework (the Three Horizons) to consider the impact innovation has on change capabilities and business models.

Here we introduce the three horizon concept to better understand the range of innovation outcomes and the potential change requirements.

The three horizon framework has distinctive horizons for specific outcomes, management and approaching change

The three horizons framework provides distinct horizons, requiring different outcomes and approaching the scope of innovation in mindsets. Usually, it is represented by a typical XY plane, whereas Y is the amount of scope/need/value/change over x, the time each takes/seen/needed

What’s important to understand is that every innovation creates change, and the amount and impact of change scales out across each of these three horizons.  For greater clarity, let’s examine each of the three horizons in a bit more detail.

Defining Horizon One – Operating in the Now

Horizon One defines the portion of the potential innovation space that is most similar to existing services or solutions.  The typical innovation focus in Horizon One is on improving efficiency or cutting costs.

Innovators working within this space are typically creating small but useful changes to existing products and services, offering new solutions to existing customers and prospects.  The anticipated outcome is “incremental” change, easily adopted by existing customers and no real threat to the market, competitors or the industry.  This innovation is based on existing capabilities with the intent of maintaining or growing existing shares in the existing markets.  It relies on existing capabilities and emphasizes excellent operational execution, with less focus on new needs or expanding the competitive market space.

The internal change focus is on improving execution and increasing efficiency.  There’s little change required for external constituents.  Consumers are already familiar with the products and have some expectation of improvements or modifications.  Competitors and the industry at large aren’t significantly impacted by the innovation.

The vast majority of innovation activity is “incremental” innovation because the risks are low, and market knowledge is relatively high. 

Defining Horizon Two – Looking ahead, anticipating change

Horizon Two is the portion of the potential innovation space that focuses on extending existing capabilities into new markets or introducing new capabilities into existing markets.  Horizon Two is the mid-point between “incremental’ change in Horizon One and “disruptive” change in Horizon Three.

Companies innovating with this horizon anticipate “breakthrough” innovation, usually extending a known technology into a new market, or introducing new technologies or capabilities into the existing marketplace.  Breakthrough innovation often requires extending to new capabilities as well as building on existing capabilities, with the intent of expanding markets and the competitive space.

The innovation arising from the 2^nd horizon requires more experimenting than Horizon One innovation and often leads to some change for all three constituents.  Internal change in this horizon is focused on experimenting and extending capabilities. Consumers may experience change due to the introduction of new technologies or capabilities.  Competitors will experience change due to the broadening of industry definitions or modifications to industry or technology conventions.

Operating in Horizon Two the innovator begins to stretch its horizons, using either new technologies, extending or establishing new practices or capabilities as they explore and enter new markets or shape existing ones differently.

Horizon two is regarded as the zone of greater uncertainty

Defining Horizon Three- The future, defining change and transforming

Horizon three is the portion of the potential innovation space that seeks the most significant innovation change as the innovator seeks to create new markets or dramatically change or disrupt existing markets, or create completely new technologies or capabilities. 

When companies conduct “disruptive” innovation the anticipated result is market or technology disruption, creating new market dominance by upending existing products, technologies, capabilities or markets or creating entirely new products or markets.  Innovating in Horizon Three requires significant discovery and learning while building and adapting new capabilities.  Successful innovation will create disruption for all three constituents.  This is the space where the most change will occur.

Consumers will find a completely new, novel and valuable solution to an existing problem or challenge, and must change their actions or behaviour to adopt it.  Disruption of industry expectations and norms will force competitors to react and may cause so much change that they cannot respond to the speed and scope of the change.

The innovator themselves must change, in order to provide all of the features and capabilities the disruptive innovation requires in order to be adopted by consumers.  These internal changes will be based on exploring new technologies, evolving business models and expanding the definition of the market or solution.

Those attempting Horizon Three innovation are creating entirely new capabilities or technologies, creating new segments or markets, or both

Relating innovation and change within the three horizons

As we define each of the three horizons and the anticipated innovation outcome, we can begin to document the differences among the potential outcomes, in terms of approach, the leverage of new or existing capabilities, intent and strategy, and many other factors.

Understanding the decision making, strategy, intent and emphasis required for each horizon helps delineate the commitment, resources and effort involved, and begins to signal the scope and impact of potential innovation and the change the innovation can create, for customers, markets and the innovator.

These ideas culminate in a rather interesting conclusion, which is that any innovation, especially in horizon two or horizon three, regardless of its intended outcome (product, service, channel or business model) is also by definition the need to reflect on a business model innovation change.

Will the innovation significantly change the existing business model or distort or disrupt the model?  This means that innovators internal to the industry will be constantly evolving the model from within, questioning it, evaluating changes, and new entrants and disrupters will seek to change and challenge existing models from their external perspective.

Both of these facts lead us to the conclusion that good innovators must excel at sustained change and business model evaluation.

Most corporations don’t understand how much change is created by innovation.  A most important realisation 

Innovation in almost any form may require that the customer or market change.  It’s very likely that these innovations will require that the innovator change as well. We simply cannot expect to create change in the marketplace or in the customer base without also being expected to change as innovators.

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In any ecosystem thinking and design, we do need to find this “sweet spot” for encouraging more innovation. For me, it is the ability to build the dynamics within the involvement required.

We live in a world where we are having greater connectivity than ever before. We are increasingly engaged in far greater interactivity with easy access to social and organizational tools than ever before.

We are encouraged to share what we know increasingly so others can build on this, or shape its original concept into a different value proposition simply by having that triggering idea and seeing the ‘possibilities’ to build upon it.

Within business, ecosystem thinking and design have become central to how organizations go about their search for value and impact. This thinking is recognizing a network of interlinked companies that dynamically interact. This set of dynamic interactions enables both an increased intensity of purpose from cooperations to seek out different levels of competitive advantage.

“Ecosystems are dynamic and co-evolving communities of diverse actors who create and capture new value through both collaborations and competition need, to deliver unique propositions against increased customer demand and expectations.”

Ecosystems comprise of suppliers, customers and a growing diversity of organisations to merge their thinking, that works through common processes and systems, mostly enabled in a cloud environment and accepting a common platform to gather and exchange. Over time a pattern of behaviours builds to enable a flow of ideas, and concepts, drawing upon available talent and resource capital to coalesce around a set of goals to vision.

Ecosystems create stronger barriers for competition to duplicate due to the inherent complexity within the network. The leveraging of technology, in both software and hardware, in combining research competence, enables a different level of creativity and innovation than just in one company alone.

Perhaps we have a new innovation equation to explore and exploit more

It is the degree of connectivity times the degree of interactivity times the degree of sharing, that is within our growing ecosystem community that enables the innovation to emerge.

We need to find the spaces to innovate and those are coming increasingly from higher levels of collaboration and sharing.

I wrote this piece “the chance to think differently about ecosystems for innovation” providing some thoughts on why ecosystems are vitally important to innovation in the future.

Ecosystem design in today’s more open world where technology allows us all higher degrees of freedom, discovery and ability to make the innovation space a vibrant one.

A connected world where it is the collaboration we undertake, that leads us to break out of the existing, changing the known, investigating the unknown by the ‘degrees of our willingness to explore and exploit all that is around us, if we only reach out and be open to new levels of thinking and collaboration.

For that it is this connectivity, interactivity and sharing that creates the dynamic environment and technology becomes the enabler to making this creative space the space for innovation to emerge.

** If you are interested in delving into the understanding of ecosystem designs and thinking then please go to my dedicated posting site for Ecosystem thinking

The post Innovations Degrees of Connectivity, Interactivity and Sharing for Ecosystem Design first appeared on Building Your Innovation & Ecosystem Intelligence.

Innovation is the key driver to turning our world from a fossil-led one into one based on renewables and technology is the enabler.

For this to happen, our focus today should be fully on low-carbon technologies and their technical realization.

We should be looking at applying the three horizon methodology here to determine a pathway from today through to 2050 to achieve our goals of having a world free of man-made carbon emissions.

Innovation applied has three value points here 1. Sustaining innovation, 2. Disruptive innovation coming from the 2nd Horizon and 3. Transformative innovation from technologies has yet to fully emerge.

Let’s take a look through the three horizon lens and outline the basic differences and approaches using the three horizons

If we apply these to the prevalence of each horizon and group the type of application and the different maturity levels of energy technologies we are grouping these into three types:

1. Extending Mature and Established Technologies,

2. Technologies in development and emerging on the market, that have to go through validation and commercialization and the critical need for scaling up

3. Those technologies in fundamental research or yet to be proven beyond the lab or small pilot scale.

Examples of these different technologies that can build out the renewable pathway are shown below, along with the important need to apply relevant new thinking to developing or altering the business model.

Each technology has a significant scale, financial impact and business model approach. I am not discussing the Business Model changes needed here.

Each of the energy technologies here is known and discovered. There are many questions we need to answer

For instance, a real need to change the materials used to reduce rare earth materials for example, or find more effective and safer ways to build out small modular reactors. Can we make sure all future designs are net-zero or circular economically designed for recovery and maximum re-use?

How do we handle rapid changes in infrastructure needs, incentivising market changes or managing a number of potentially stranded assets, switching from fossil fuel to renewables, or the ability to ensure developing countries can have access to financing these changes, even with proven technologies we have today.

The business case of change, in any technology, market or energy carrier is a significant endeavour in itself

We need to ask basic questions such as a) how can we achieve stronger electrification of the end-use more rapidly, b) how can we decarbonize power supply, c) shift any gas to being 100% green, d) build out the infrastructures to handle variable energy sources and equally e) build a sustainable mobility need for cars, trucks, trains and aeroplane travel.

Also how can we constantly drive energy efficiencies, optimize plastic issues, resolve hard-to-abate sectors like steel and cement and capture existing and future emission?

The three-horizon approach is a triggering device to begin to explore and answer all of the questions raised here but it gives it better structure,

The structure enables and opens up all the different voices needed in each board room as they consider energy change, as all must do, to decarbonize and evaluate the impact and costs and consider the shifts this means in the business model.

For me, we need to heed the different voices and recognize the dominating systems that need challenging in any change of such magnitude as the global energy system.

We need to clarify how to identify the existing prevailing or dominant system and the challenges to its sustainability in the future, i.e. the case for change (horizon 1). Innovation can lose the ‘fit’ aspects over time as the external environment changes.

We also need to think through the desirable future state, the ideal system you desire and the emerging options. Those that can displace what you already have. Often you can find elements in the present that give you encouragement (horizon 3); keeping yourself open to all options that could lead to transformational change.

Often the struggle is to draw out the nature of the tensions and dilemmas between vision and reality, and the distinction between innovations that serve to prolong the status quo and those that serve to bring the third horizon vision closer to reality (horizon 2); This is the space of transition, often unstable, called the intermediate space where views can collide and diverge.

The three voices that need to be in the same room
The different voices involved can be highly engaged, all wanting to add their perspective:

• You have the voice of today, the incumbent, the manager(s) responsible for delivering today’s result, very much operational and result orientated, that are more concerned with managing the existing, maximizing returns and keeping the organization going efficiently and effectively.
• Then you have the second voice, the voice of the entrepreneur or pioneer, the one eager to experiment, try out new things, wants to push further, explore and extend, accept some aspects will not work but keen to investigate, experiment and learn from these discoveries.
• Last we have the third voice, the voice of the aspirant, the champion for energy change, who is looking to build a different vision, believing in different, more pioneering, perhaps radical solutions that seek to visualize things in their ‘mind’s eye’, far more aspirational. These concepts often can seemingly look on first ‘take’ to be totally incompatible with the reality of today but are picking up on ‘weak signals’ that are out there that signify a changing future that might impact your own.

It is the combination of these different three voices that need to come together and frame the innovation journey by using the three horizons framework.

In summary, the three horizons provide a further structure to the need of exploring and exploiting both mature and emerging energy technologies

The three horizons approach offers the methodology for constructing plausible and coherent innovation activities projected out into the future. It looks for emerging winners. It allows for dialogues to commence and be constantly evaluated.

This is not a planning tool; it is providing a valuable evolutionary perspective that dialogues can be formed around so decisions on where to focus and what resources to apply can be made on a more plausible and coherent set of activities, projected into the future, searching for emerging winners that can change and challenge your existing business.

You really should give it a far greater consideration within your innovation and energy transition toolbox, it ‘aids’ the framing of your present to future needs and gives ‘voice’ to all the different thinking and opinions on building the innovation pipeline, balancing the portfolio and helping to identify all the gaps and opportunities that need resolution.

If you need any stimulation or help, then come find me!

The post Phasing the Energy Transition by Technology and Horizon Management first appeared on Building Your Innovation & Ecosystem Intelligence.

The Pathway Curve Methodology

The approach we take to embedding innovation in all its forms is a unique one that we call the Pathway Curve Methodology.

Innovation needs to be worked at, to grow into a deeper understanding, over time. It needs to be understood in all its different forms and often many can become confused and disappointed by their initiatives by not taking a more measured approach to them.

Innovation building faces a multitude of obstacles to overcome so innovation has a chance to be embedded within an organization.

The more you wish to build from incremental, through distinctive to finally more radical, game-changing innovation you need to recognize, resolve and seek solutions that take you from where you are to where you want to be.

Firstly what are you trying to achieve?

Firstly you have to ask what you are trying to achieve, is it incremental innovation, distinctive, disruptive or even radical? Getting a thorough understanding of what it takes to move up this learning curve to achieve the different types of innovation takes time.

You gain from this approach a deeper understanding as well as it supports experimenting in ‘controlled environments’ to take these fully on board, embedded and practised.

Here is ONE EXAMPLE of the pathway curve of understanding

Focusing on the critical organizational impact where the return, cost and viability have a growing need for visibility, and have a learning and maturity curve to climb. It is getting to recognize differences, adapting and advancing in understanding to get to the constantly evolving innovation value-adding dashboard this curve brings.

Our methodology takes you through a structured approach, a way of climbing up this innovation understanding curve so the different needs you are trying to achieve (distinctive, radical, disruptive) can be managed in a clear way to support any future innovation initiative.

Let me provide one of the other Innovation Pathway Curves

When we build capability and capacity we cannot build this simply overnight, we need to systematically build this, partly depending on what you want to achieve; incremental, distinctive or radical innovation as these are a growing set of competencies to drive you up the innovation pathway.

We need to keep building our innovation core for greater value generation potential here. It is recognizing and setting about moving up this curve of understanding.

We all need to be taken through FIVE of these curves in learning. So we have five innovation pathway curves to scale.

1. The Obstacle curve- recognition and overcoming the barriers
   
2. The capability & capacity curve- evolving as you tackle different phases
   
3. Growth building steps
4. Organizational impact understandings
5. Discovery & transformation path

Briefly, we introduce the Innovation Pathway Curve Methodology here with a couple of pathway curves-

In Summary

The learning is how willing and open are you to learn, and how capable and hard you feel the need to push up these five complementary but distinctive curves of innovation understanding. It is not an easy journey, it takes, time, patience and determination

At each start point, we need a diagnostic and climate assessment, we need to gauge desire and commitment and we always need leadership commitment and understanding.

At Agility Innovation we can help you to understand and be effective on your own innovation curve to understand all the different components of innovation that need to be in place and valued.

Interested?- well reach out, make the initial contact and let’s simply discuss this for you to get ahead of the innovation curve of understanding!

The post Knowing Your Innovation Pathway Curve – A methodology first appeared on Building Your Innovation & Ecosystem Intelligence.

I have been working through my innovative points of focus, those that have, for me, my innovating purpose that needs constant referencing back and adapting to the future needs of innovation.

So here are my points of focus with a number of reference links that I have selected and written upon in the past. They help build out my narrative for innovation capability building and understanding for the future.

Asset Orchestration the new game around- structuring, bundling, leveraging the complex interactions. Asset orchestration is required for more dynamic innovation.

Dynamic Capabilities – opening up your thinking to dynamic capabilities by spotting and resolving the tensions, gaps, building a greater fitness landscape model that builds agility on a new pathway, strengthening and defining all the different stocks and flows

The multiplicity of Investment – transforming, integrating, identifying, contextual, common language, coherency premium

Value Creation – what is it, value creation resides where, wealth-generating perspective, a narrative to be broken down, integrated framework, impact points in new combinations and discovery

Innovation Capital – defining innovation capital,  the combination of the core sum, learning about, interactions, bundles, future value, recombine.

Innovation Infrastructure–  building-related innovation assets and dedicated resources, the architecture around innovation building, the connected building blocks, the innovation work mat approach.

Knowledge Management– learning how to absorb and translate in common ways the knowledge we need for innovation, recognizing how knowledge flows

Intellectual Capital – building our learning capitals, the importance to us,  the bundle of unique assets, agility and attitudes, collaboration, the building mechanism for organizational learning

Different Horizon Planning –  We need to plan in different horizons, to assign and think in different ways to sketch out the future sustaining pathway to meet the three different voices we need today, of articulating and innovating today’s business, adjusting the business of today to the immediate future by adjusting and update, and the longer-term sustaining one, that will offer a very different future from today, that we need planning and building for, today.

YOUR Business Model Innovation– articulating the value-generating story goes way beyond your organization, for today’s more compelling value propositions, it is becoming a critical interplay.

My final one is emerging as a repositioning towards innovation ecosystems. One of my posts was “Business needs innovation ecosystems” and I have been building understanding and knowledge on the influence of ecosystems and platforms consistently over a number of years.

There are so many points of innovation value, these are just a taster of all the knowledge, understanding and linkages that need to be built in any innovation capabilities for competencies and capacity to innovate.

Dip in, take a look, and go further by viewing the key reference tabs provided on the right-hand side.

The post Linking sense of innovating purpose first appeared on Building Your Innovation & Ecosystem Intelligence.

I was recently working through a set of older presentation files and came across this extract concerning innovation again and thought I must share this. Sadly, it rings true as much as it did those  (many) years back.

“Strategy is useless without innovation; innovation is directionless without strategy”.

Below is an extract from “Reinventing Innovation” by John J Kao. For me, it is sadly as relevant today as when I first came across it, some years back. Are we making real progress in our innovation activities?

Read this slowly, can I ask you to linger over its implications, its questioning and its suggestions. The extract offers much for any innovation pathway we might be considering.

The Innovation Pathway

” Innovation fits with a designer’s definition of design: the ability to move from the existing to the preferred.

Innovation is the path by which we seek the future we prefer. Not the future that we’re going to get, but rather the future we want.

Today, there is a vast gap between the aspiration for innovation and its reality. Innovation practices that are in step with the speed, uncertainty, and volatility of the new economy are still a promissory note, in this day and age.

Until we have practices that go beyond brainstorming on the one hand or simply tweaking a new product development process on the other, we will never arrive at the promised land of strategic innovation. Few if any can point to systematic practices that realize corporate innovation in a reliable and continuous fashion.

If you take innovation seriously within an organization, it touches every aspect of how business is done. It’s about leadership, organizational structure, knowledge management, corporate purpose and values, norms regarding collaboration, and strategic foresight processes.

Innovation touches everything. An innovation system requires an examination of the organization in a holistic kind of way, which is why most organizations have a tough time grasping the agenda.

We have to talk about the hard work of creating deep capabilities within the organization, capabilities that once established with tremendous effort don’t go away and confer a competitive advantage over long periods of time

The economies of scale organization are hierarchical and control focused, as is the mindset of its managers. Economies of discovery, on the other hand, which in my opinion are characteristic of the new economy, work quite differently.

Instead of efficiency, we strive for originality, for what will change the game. Instead of hierarchy and control, the focus of management must be on collaboration and enabling what is new.

There must first be an intimate connection between strategic thinking and innovation. Strategic planning must co-exist with strategic foresight. Innovation becomes an answer to a set of strategic questions. Strategy is useless without innovation; innovation is directionless without a strategy. Second, we must develop robust innovation processes

We also need a new sense of the scope of innovation, to look far beyond products and services of seeing things and shifting perspective, so that a new vision, a new set of possibilities can emerge.”

The extract is from “Reinventing innovation” by John J Kao, The Idea Factory.

This simply needs re-reading and recognizing what John said then, which still applies today. Do you agree?

The post The lost innovation pathway first appeared on Building Your Innovation & Ecosystem Intelligence.