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Sorting through our Innovation Management Tools

@paul4innovating — Thu, 14 Jan 2016 11:25:57 +0000

We all are caught up in handling and understanding different management tools.

The numbers are accelerating, and if anything it’s adding more confusion to the pile we already have. So let’s see if we can help here, step back a little from your favourite tool and look at this just a little more deeply.

How do we pick through all the tools, let alone keep up with all the new ones emerging?

There are management tools that have become ‘enshrined’ in organizations and many of the executives become settled on the ones they have bothered to learn or seemingly do the job. The problem we are having, many of the traditional tools, many still taught in most management schools are lagging in the changing market we are operating in. Equally, there is such a growing movement on adopting new tools, many still in that lovely excuse of “being in Beta” that it does become confusing.

Tracking the trends in Management Tools
One of the consulting companies, Bain & Co has conducted the Bain’s Management Tools & Trends survey since 1993. The latest one for 2015 is here. They have made 15 surveys over the years and reported on the top 25 tools of each year. To be included they have to be relevant to senior management, topical and measurable.

The intent of this survey is to track what is ‘trending’, under what circumstances is it being used and how satisfied managers are with the results. It also helps provide better choices in selecting, implementing and integrating the different tools so as to hopefully improve an organization’s performance. Finally, when Bain conducts this survey they gather the opinions on a range of business issues and report the changing management priorities.

I have followed this for a number of years and yet I am constantly surprised how little this seems to have really changed or the tools used, yet we have such a groundswell of management tool makers or so we believe. If we want to get top management to change their beloved tools I feel it might take a different generation to sweep away the old guard and bring in the new.

Yet there are signs of tool management change

One company pioneering a change in tools is Strategyzer founded by Alex Osterwalder of Business Model Canvas fame. They are working towards a Strategyzer’s Toolbox of useful Business Tools.

They are positioning themselves on a mission to find the right remedy for designing future growth engines by wanting to fill that gap by creating a set of tools for business strategy, business design and innovation. Each one of them focuses on solving a specific business problem. I feel they have a long way to go but are certainly on a promising road.

For Strategyzer they define a business tool through Alex Osterwalder’s definition:
’Business Tools’ are conceptual frameworks that are specifically designed to help business practitioners solve a concrete (and limited) business problem in a real-world context. The best tools are conceptually sound, simple, practical, visual, have a great user interface (UI) and provide a great user experience (UX). It is these characteristics that make them ‘fit’ for the real world and increases adoption by business practitioners.

According to Strategyzer, Business Tools help strategists address today’s complex challenges in two ways: by providing a structured approach and a shared language.

Structured approach: tools frame strategic conversations and ensure all the important aspects of a problem are being addressed. They help organize information and prioritize the work.
Shared language: tools align teams around a visual concept, making complex ideas clearer with an image.

In Strategyzer’s view, there is clearly a gap between the tools a company uses to execute a known business model and the tools they use to design future growth engines.

Returning to Bain’s advice might help us work through the tool ‘desire and need’.

As companies seek to grow and innovate in an era of rapid technological change, they offer the following four suggestions based on their research to help managers get the most out of the tools they choose.

Get the facts: Every tool has strengths and weaknesses. And tools’ usefulness can change over time. To succeed, companies need to understand the full effects of each tool and then combine the right ones in the right ways at the right times. Peruse the research and talk to other tool users. Don’t naively accept hyperbole and simplistic solutions.
Champion enduring strategies, not fleeting fads: Line managers and tool experts don’t always have perfectly aligned agendas. Tool experts may have an engaging perspective, but managers must manage. Companies should champion realistic strategic directions and view tools as an aide, not a panacea.
Choose the best tools for the job: Managers should take a rational approach to selecting and implement tools. A tool will only improve results to the extent that it identifies customers’ unmet needs, builds distinctive capabilities, exploits competitor vulnerabilities and develops breakthrough strategies.
Adapt tools to your business system—not vice versa. Bain’s research shows, for example, that major efforts achieve significantly better satisfaction scores than limited ones. If management can only engage in a limited effort, it may be best to avoid using some tools. It’s also important to keep in mind that satisfaction scores for the same tool can vary widely depending on company size and region.

Bain also offers some further important insights
Over time, Bain’s research has provided a number of important insights. Among them:

Overall satisfaction with tools is moderately positive, but the rates of usage, ease of implementation, effectiveness, strengths and weaknesses vary widely
Management tools are much more effective when they are part of a major organization effort (critical point this)
Managers who bounce randomly from tool to tool undermine employees’ confidence
The hyperbole surrounding the trendiest of tools often leads to unrealistic expectations and disappointing results (chasing ‘Beta’ tools needs a possible cautious approach)
Decision-makers achieve better results by championing realistic strategies and viewing tools simply as a means to a strategic goal
No tool is a cure-all
Surprisingly globally, the trend toward using fewer tools continues, (which is in exact opposite of what I would have thought)

Then we get into Tool Usage Trends
Companies seem to be deploying a wide and ever-shifting array of management tools, to address business challenges and capture business opportunities. The number of adopted tools is partly determined by the organization’s size, its needs and its abilities to really apply the tools and get these well used in their company.

The size of the management effort is critical to determining tool satisfaction. The more they use the tool, and give emphasis to it, the more it seems to give satisfaction in capturing and delivering on the tool’s design.

Clearly, the importance of implementing tools across the organization needs top-down support and consistent use.

Presently the highest rated tool is Big Data Analytics; more than half of surveyed executives say that Advanced Analytics are transforming their marketing strategy.

Complexity Management was not a highly used tool even though increasing complexity was identified as one of the most pressing business challenges.

Putting real concerted effort into your chosen tool ‘delivers’ corporate satisfaction

In the above table, you can see different tools vary in their level of satisfaction based on the level of effort put into their implementation. Big Data for instance scores a 4.22 in satisfaction from increased effort and falls to 3.65 with limited effort. Innovation labs show similar variation (4.22 vs. 3.70). Digital transformations have the potential to go very badly, with a score of 4.17 for highly active efforts and 3.52 for low effort operations.

Sorting through the tools need real knowledge of their value and contribution

We also have to remember that the tools you select often have differences in their focus, is it more on revenue growth or cost-cutting, on innovation or customer relationships for example. This may be one reason for the increasing popularity of Big Data Analytics at present, which is helping companies more effectively segment and target customers as currently, companies are looking for greater growth.

Established market firms continue to lean toward using more traditional tools such as Benchmarking, still, the Balanced Scorecard and Employee Engagement Surveys are extensively used, even though these might come in different guises of simple to complex scorecards, dashboards or KPI initiatives, with lots of traffic lights and directional arrows ‘enhancing’ these.

Finally, one tool that is being put into place in the APAC region has for me a really high interest.

Disruptive Innovation Labs
On the 2015 list of Bain’s is Disruptive Innovation Labs. These foster disruptive innovations—high-risk, high-return breakthroughs that often start at the bottom of a market but eventually displace established competitors.

So What do Disruptive Innovation Labs do?

Disruptive innovations require different time frames, processes, performance metrics, people and skills than incremental (or “sustaining”) innovations. The evidence shows that Disruptive Innovation Labs work better when separated from core business operations.

Primary benefits of separation include the ability to acquire and retain exceptional talent, work within specialized facilities, offer a higher level of Freedom to challenge conventional wisdom, look to reduced bureaucracy and increased flexibility and offer more entrepreneurial cultures and incentives to build the culture to seek disruption.

Companies are using Disruptive Innovation Labs in different ways:
Research also shows that Disruptive Innovation Labs benefit from “soft integration” methods, such as social integration of senior teams, job rotations, collaborative planning, shared knowledge networks, and cross-functional teams and task forces.

These methods help to focus the lab’s efforts on real-world problems. They also reduce conflict, leverage existing assets and economies of scale, and encourage the adoption and deployment of breakthroughs.

Most management teams aspire to innovation “ambidexterity”—the ability to fully exploit existing assets while simultaneously exploring new capabilities required for future success.

Disruptive Innovation Labs push organizations beyond incremental improvements. They are often deployed in three situations:

When companies face new forms of competition that are stealing market share or reducing profitability
When traditional innovation methods are failing to deliver the required results
When management senses that the organization is growing complacent and needs concrete examples of bold innovations to raise its vision and transform the culture

So how aware of this specific trend in disruptive labs were you?

It is presently not trending very highly in Europe or North America and that must give many companies one or two alarm bells around innovation. It would be.

So if you would like to explore more the Management tool and trends survey for 2015 by Bain and Co here is a further link.

Tools and trends are certainly just piling up, have you established your toolkit yet? Time to take a deeper look at all that pile.

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Publishing note: This blog post was originally written on behalf of Hype and with their permission, I have this added to my own site

The post Sorting through our Innovation Management Tools first appeared on Building Your Innovation & Ecosystem Intelligence.

Navigating the future landscape by developing adaptive innovation skills

@paul4innovating — Wed, 24 Apr 2013 14:25:18 +0000

So where are we focusing upon to make sure we are developing the right proficiencies and abilities we will need to manage our innovations of the future?

For me innovation capabilities and competencies needs to be far more adaptive and aligned to the different emerging skills we should be bringing to bear, so we are able to find better innovating solutions for our collective futures.

The issue is this: if we do want to reshape much of what we are struggling with today – poor growth, diminishing futures, disconnected communities, stagnating economies or ones struggling to emerge from devastated and austerity measures inflicted upon them.

We do need to change our skill sets to reflect a more realistic and up to date need to navigate and transform knowledge to tackle these. Often our present skills are not equipped to manage in these more “disruptive” environments.

I wrote in a past post about “Learning to absorb new Knowledge for Innovation and the ability to understand Absorptive Capacity and how it works. Recently I followed that up with two recent posts about our pressing need that Jobs can be created but our skills do need very much adapting and refining, from where we are at present. One post was “Innovation Job Chasing- A Race Needed to Win” and the other was its precursor “The Present Innovation Jobless Era We Face.”

Our real need is to put in place those stronger adaptive skills as our foundations so we can be better equipped to compete in the growing innovation race we all facing at personal, community and national levels. We need to equipped differently to meet the tougher global conditions that will be with us for our lifetimes, irrespective of our present age.

Competition won’t go away; it will only increase in its intensity. To meet this we need to be far better equipped to be ‘innovation-ready’ in our skills. What forms a better ‘innovation ready’ skill set?

So what are those future skills we should be working towards to group around?

There was a report published in 2011 by the Institute for the Future (IFTF) and sponsored by the University Of Phoenix Research Institute to understand the skills workers will need over the next decade in our changing world, based far more on technology and its continued advance.

The report “Future Work Skills 2020” looks initially at what it feels are the six drivers that are shaping our landscape and then the ten skills they see as emerging that need to be where we place our future focus upon. These are:

Sense-making: the ability to determine the deeper meaning or significance of what is being expressed
Social intelligence: ability to connect to others in a deep and direct way, to sense and stimulate reactions and desired interactions
Novel & adaptive thinking: proficiency at thinking and coming up with solutions and responses beyond that which is rote or rule-based
Cross -cultural competency: ability to operate in different cultural settings
Computational thinking: ability to translate vast amounts of data into abstract concepts and to understand data-based reasoning
New-media literacy: ability to critically assess and develop content that uses new media forms, and to leverage these media for persuasive communication
Transdisciplinarity : literacy in and ability to understand concepts across multiple disciplines
Design mindset: the ability to represent and develop tasks and work processes for desired outcomes.
Cognitive load management: ability to discriminate and filter information for importance, and to understand how to maximize cognitive functioning using a variety of tools and techniques
Virtual collaboration: ability to work productively, drive engagement, and demonstrate presence as a member of a virtual team.

A call to action

As the report authors of Anna Davies, Devin Fidler, and Marina Gorbis suggest, the results have clear implications for individuals needing to learn these skills. They will be asking from where will these come? From the educational institutions that need to grapple with changes that are occurring fast. Also it is the actions both in business and at government level on how they will encourage and develop the strategies and policies fast enough, so as to offer the incentives to drive the changes needed. It is how quickly we move towards any organized ‘grouped’ learning of new skills can we begin to build within these new groupings.

All institutions certainly do need to provide the leadership to embrace the shifts needed in a constantly changing set of lifelong learning. It is recognized increasingly that skill renewal is constant to meet tomorrow’s ever changing global challenges. A place where skills are far more heavily reliant on technology and we are able to manage these constant changes effectively. So as the knowledge that is emerging gets translated into new values offering new opportunity, learning and growth. We discover, absorb and translate.

Teaching both hard and soft skills that reflect tomorrows needs

The underlying need is to teach skills that promote quickly in response to changing conditions that will include a higher emphasis on critical thinking, depth of insight and the analysis capabilities to ‘translate’ the information or data emerging from multiple sources.

Equally the soft skills, so often ignored as crucial become increasingly relevant. The ability to collaborate and network, to read social cues, not ignore them as not important to me and respond with this much higher level of adaptability. I wrote about “Recognition of better soft skill taxonomy for Innovation some time back that has a useful way of grouping soft skills.

My summary

Predictions can always be difficult but the impression I gained from looking at the suggested ten future skills suggested by IFTF is that they do seem to make for a solid basis for us to gather around.

What of course we need to do is to develop what ‘lies underneath these ten skills ‘to allow us all to become more ‘innovation ready’ in our skills needed to survive. These might give us that better chance to thrive in the future and find fresh innovating opportunities because we are better equipped in relevant skills.

The burning issue is that our window of time to change and incorporate these into our organized learning is shrinking at ever faster rates. We need to move from recognition of these skills into the setting about of building them far more systematically.

We need to build our future innovation capacities on more relevant skills that are based more on what we need to have within our ‘natural’ skill base based on today at least, and not ones still based on 20th century practices.

The post Navigating the future landscape by developing adaptive innovation skills first appeared on Building Your Innovation & Ecosystem Intelligence.

Learning to absorb new knowledge for innovation

@paul4innovating — Tue, 12 Jul 2011 15:39:51 +0000

In a blog I wrote in November last year entitled “Moving-towards-a-more-distributed-innovation-model”( http://bit.ly/b38ixv) I outlined some thoughts on the flow of knowledge in a distributed innovation model and discussed the Absorptive Capacities more from an internal organizational perspective.

Increasingly we are looking outside for new knowledge that needs internally managing.

As organizations seek increasingly outside their own walls, the appreciation of how they are managing knowledge, learning and interpreting this is becoming a critical aspect of open innovation to be successful.

There is a growing need to absorb, integrate and apply this in new and novel ways for accelerating innovation performance.

The more we seek, the more the knowledge increases in complexity as markets are rapidly changing. The more we are relying on knowledge flowing into the organization the more we have to strengthen our inter-dependence and collaboration efforts to extract the knowledge we are acquiring for it potential value.

Are organizations recognizing the value of structuring their knowledge flows? Do they have the right learning mechanisms to accelerate and exploit new potentials from this knowledge?

Organizations tend to be set up for incremental learning.

Often the markets we operate within are volatile and suddenly change. Our capacity to change is often governed by the new knowledge we are provided. To make a change beyond incremental learning we need a different path of learning, we need often new capabilities to learn.

We all tend to place what is being said to us as highly situational and we often interpretive it in the way that we know, we reject alternatives to see things differently and as such we do not spot the innovation opportunity that was actually in front of us.

We look for what we know. This is sometimes called being locked within your own ‘competency trap’. To move away from this risk we need stronger learning mechanisms, a change in the path of learning.

Understanding Absorptive Capacity and how it works

“Absorptive capacity” is a term introduced through some academic research by Cohen & Levinthal, back in 1990 to describe an organizations “ability to recognize the value of new, external information (knowledge), assimilate it, and apply it to commercial ends”.

Since then there has been significant academic contributions for exploring and validating this, in order to improve innovation performance and competitive advantage yet it is still not well integrated into our innovation process.

What we do need is to improve our HR management systems to build a more efficient transfer of knowledge throughout the organization to leverage it.

This is part of applying the principles of absorptive capacity as we increasingly use more networks, and external partners and collaborate with others we are accessing wider skills, inputs and competencies and we need to learn what this provides to aid the innovation process.

The theory goes that the more we understand, the more the innovative behaviour and capability go up in potential, and then the more we have richer innovation choices.

The Model of Absorptive Capacity explores potential and realized knowledge.

The Absorptive Capacity Components

The need for a distributed organization innovation knowledge system

In some studies by Van den Bosch et all (2003) they suggested the need for three combined capabilities to manage and absorb the flow of knowledge coming into the organization

System capabilities that are used to integrate explicit knowledge
Co-ordination capabilities that build upon teams that establish the routines for structuring communications
Socialization capabilities that begin to share a ‘certain’ ideology, understand the potential of new paradigms and work towards interpretation tacit information for the good of the community.

When organizations are acquiring new insights, new knowledge that is not as closely related to their existing knowledge base there needs to be a very active set of efforts to manage this new incoming flow so as to extract all its potential value, absorb it and disseminate it across the relevant parties within the organization.

Having the three capability parts structured clear helps establish different areas of capability focus and embed it more fully.

Can you imagine the need for rapid learning of leading-edge knowledge that is required to be absorbed within the company, these require dedicated structured learning, and these cannot be left to individuals or ad hoc measures.

When you are learning anew you are searching for cognitive structure, managing implicit, often un-codified knowledge (tacit) that is difficult to transfer and also increased complexity, where you need to absorb a greater range of ‘components’ and apply new‘ architectural’ knowledge.

The difficulties multiply if you do not recognize the needs to structure knowledge but to explore it in more open unbiased ways.

The ability to use external knowledge has three sequential processes.

A) Exploratory Learning– recognizing and understanding the potential value of the new knowledge that lies outside the organization

B) Transformative learning– dispersing and assimilating the valuable new knowledge

C) Exploitative learning– using the assimilated knowledge to create something different in knowledge or product and seeking to exploit this in commercial ways.

The more open Absorptive Capacity Process leads to understanding and outcomes

The more ‘open’ Absorptive Capacity Process

The call for managing the effective use of knowledge

One of the central drivers of the competitiveness of organizations is the effective use of knowledge. It is the generation, acquisition, integration and application of (new) knowledge that need managers manage to learn.

Knowledge underpins innovation, the more it changes, the more it becomes complex to discover, and the more we have of this real need to upgrade how we experience, experiment and absorb learning.

This needs structuring. As we absorb more external knowledge from our collaborators the need is to organise this well. Absorptive capacity needs to go beyond good theories into the increased application.

Absorptive capacity is an integral part of an organization’s innovation capabilities and its healthy development is a real significant dimension of innovation management that we all need to consider well.

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