There is still a continued reluctance for exploring new radical innovation opportunities and although organizations ‘talk’ growth, they continue to struggle in achieving it through new innovation.

The incremental commitments to innovation still rule the day to move growth along. Until new sustaining confidence returns to our economies, risk mitigation dominates as markets continue to be more volatile and unreliable in predictive data and executive sentiment remains cautious.

Our organizations are looking for a higher certainty of return and seek sometimes endless validation and justification before they commit, even to small incremental changes. It is no wonder incremental innovation dominates in our innovation decisions; it is where reality sits for many. Are we heading off in a bad innovation direction?
Solidification in organizations seems to be moving towards simplification
As this incremental set of attitudes solidifies within organizations, have you noticed a growing trend of recognizing the processes and systems built up are actually more complex and creating ‘drag’ on performance demands? There is a move to greater simplification that strengthens the incremental mindset. We are perhaps ossifying innovation in our organizations if we elect to take this simplification route.

Risk readiness might be taking a bigger ‘back seat’ than we expect. This has significant implications as organizations continue to lose the ability to be ‘growth ready’ to execute on any sudden change of executive direction if market conditions suddenly change. Many are losing the ability to innovate beyond incremental approaches. It might catch them out badly if markets suddenly change and they are faced with a very different set of challenges demanding a more radical set of innovative solutions.

What signals are showing through?
Often we read of the likely demise of innovation but I think it’s ‘nature’ is changing. At the top of our organizations there continues to be this higher dissatisfaction with the value and returns within innovation and this is possibly being addressed in different ways down below in the organization, to compensate and appease.

Risky projects for the majority are not the place to blaze away in their careers; they want the known reward from keeping ‘steady’ the ship and being part of the incremental growth movement, to be seen as good operators working at constantly offsetting any risks, delivering what is wanted to be heard, not the bearer of bad news.

Do you spot this trend within your organization or industry? That growing movement where the ones intent on developing the routines that increasingly are only focused on incremental improvements are in the ascendency? Those driven by pushing hard for operation productivity to the exclusion of a number of traits associated with more radical innovation or potential breakthroughs.

Driving innovation through productivity has a real drumbeat
Are you in that place where there is this constant attention to improving practices continuously, to the exclusion of enquiry and only investing in the capacities that supports the delivery of this drive for greater productivity. A place where organizations are constantly seeking out those best practices, by wanting to eliminate variation, believing to simply copy others gives them the answer.

Do you gain that sense of impatience to evolve and develop in your own unique ways, as you attempt to short cut your own development in this blind copying? All around you feel that growing sense that the movement of six (sic) sigma is resurfacing, tapping into this quest for greater productivity and the ‘richer’ innovation potential seems to diminish?

When you have this incremental mindset then you become dedicated to standardization, you focus on real-time performance that can be measured and judged, you promote a more careful evaluation of innovation practices, striving to eliminate variances, you become relentless to reduce the unpredictable activities.

It becomes the prevailing organization mindset, the radical innovator drifts quietly away, disillusioned with where it is all going. Left to the gods of others making market change.

Organizations are more comfortable with improving productivity
There has been so many years of cost cutting, the consultant is also repacking it’s services from the present col-de-sac, largely played out, by housing organizations needs under the appeal for this quest for simplification.

Recently I was reading a report from www.sourceforconsulting.com that simplification is the next step in the evolution of productivity. The argument goes productivity is linked to growth and as our organizations are still very determined to do more with less, rather than simply less, the rise of rationalization grows and the demands to tap into this gathers pace.

Mitigating risk is the easier option
It is the attraction of combining this prevailing risk mitigation mindset with the idea of standardising and simplifying, validating through increased data verification and mining, striving for benchmarking and searching for best practices seems to go nicely with placing the innovation bets on increasing the incremental activities, all to the detriment of seeking out more radical innovation. Less risk, steady growth, fits with the short-termism of the board. Reward and remuneration become increasingly geared to this.

The vicious circle of meeting the board’s demands for immediate return simply tightens the noose and the longer-term building of capabilities for new innovation continue to slide, pushed off to yet another day, somewhere in the future. Does that really matter to the current board executive or his external board? Managing today’s volatility and uncertainties means risk mitigation is dominating. Let tomorrow be managed by someone else.

Are the majority of our organizations becoming the great sustainers?
A recent article by Gary Pisano on the HBR blogs was arguing for the defence of routine innovation. He suggests the vast majority of profit from innovation comes from the stream of routine, or sustaining, innovations that accumulate for years.

He mentions Intel as a great sustainer, with its value proposition of higher-performing, higher-margin microprocessor chips has not changed. Growth is slowing but Pisano’s argument is Intel has generated cumulative operating income before depreciation of $287.4 billion. That is a lot of cash generation to keep investing or distributing back to the shareholders.

Equally, Pisano argues Microsoft that started as a great disruptor but for much of the recent years, it has been following a sustaining path, defending its position. Of course it has perhaps missed out with this prevailing ‘mindset’ on some really key growth areas, yet it has earned $325 billion over three decades.

The article is equally suggesting Apple is a sustaining, more incremental organization today. It has generated $150 billion is cash flow since 2011. The emphasis is perhaps less on the next big disruption and more on aesthetically pleasing designs and versatility in their devices.

Are we leveraging to existing strengths and not grasping new opportunities?

Gary Pisano’s point is as an organization becomes well established, its innovation strategy needs to understand how to leverage distinctive existing strengths to generate and capture ongoing value.
It is about recognizing and organizing innovation around the repertoire of existing strengths to extend increasing the value from innovation, to play to your existing strengths. Or is it?

Are we not putting off our future by not investing in the future? How can we strike a balance on this and what should that allocation of resources be like? What needs to be brought in to add to the existing repertoire of skills?

Is the innovation message today becoming more deliberate in its design?
I wonder what is around the corner. So is the message today the one of trading off the risks of radical, disruptive innovation for the more incremental, sustaining innovation? Is this the period of evolutionary innovation, less revolutionary?

Of course, we all know that oblivion is potential ‘just around the corner’ as there are many competitive forces at work looking to disrupt.

For me, it does seem far too many of our organizations today might be far too focused on protecting and defending their existing positions, they are failing to extend beyond a core. Are our organizations working on incremental innovation to the detriment of more radical and riskier innovation? Is that unhealthy or simply prudent?

I fear the innovation balance seems not right.
Of course the strategic view of sustaining innovation while you explore and experiment the next big potential wave is the best approach but I tend to feel the dominating mindset of risk mitigation today, is driving many to simply just become incremental innovators only and that has a growing risk attached to it.

You continue to lose the skills, the understanding that more radical innovation is very different in time, in placing your resource allocation and building all the different skills and experience you need and these need to be consistently worked at. They can’t simply be turned off and on when changing market conditions are suddenly confronting you.

If incremental innovation dominates we lose the future
If one type of innovation prevails and begins to dominate, the risks of not providing for a healthy future increase, and we are ossifying our innovation.

We begin to lose our abilities to be responsive and flexible. We lose our agility to respond to changes in our markets.

What is always needed is to strike a good balance in our innovation portfolio, between the immediate and the future.

We need to not forget that we all must manage in all three innovation horizons to have a (greater) chance of achieving a really sustaining future.

The post Are our organizations ossifying their innovation or simply have no clue? first appeared on Building Your Innovation & Ecosystem Intelligence.

I really have appreciate it. I wanted to draw out some useful learning from this report and useful reminders here in this post that there is no easy answers in innovation, social or business related.

The report outlines the difficulties of enabling innovation in social sector organizations. In this review the authors undertook exploring what enables organization capacity for continuous innovation in established social sector organizations, that operate at an efficient scale, delivering products and services.

Three oversights that conflict in working in the social innovation area

First, innovation is often perceived as a development shortcut where pushing innovation is often at the expense of strengthening more routine activities, which this ‘push’ might actually destroy rather than create value.

Second, social sector innovation has little external impact to show when it is enacted in unpredictable environments. Proven innovation can often fail when transferred to a different context and there is equally an undervaluing of the positive internal learning impact that comes from these ‘failed’ innovations.

Third, the power of negative organizational factors, such as bad leadership, dysfunctional teams and overambitious production goals as examples, makes the innovation task extremely difficult to succeed in difficult social conditions

This report helped me rethink the value of incremental in social innovation

I have been constantly complaining about incremental innovation needs to become more radical, more disruptive, more breakthroughs and what this report provides is a totally different slant on incremental innovation.

Also I have talked often about the knowing of the context of innovation and this report offers a brilliant reminder of this.

Over-rating the Value of Innovation.
The report offers this thought within social innovation: “Most of the value that established social sector organizations create comes from their core, routine activities perfected over time”.

It is the efficiency being produced in providing standard products and services is the place that creates tremendous value, particularly in places of widespread poverty.

The organizations involved have found a working model in a particular context requires predictable, incremental improvements and lots of them to generate superior outcomes over time.

The authors cite the Aravind Eye Care Hospital for their focus on continuous improvement of practices and investing any profits in building additional capacity. It is the dedication to standardization that drives operational productivity.

They spend their time eliminating variation to build constantly capacity to make an impact at an increasing scale.

The important point here is “constantly building capacity to make an impact at an increasing scale” and it is in finding the contextual linkages is where incremental has its greatest value potential.

Perhaps I push for different types of innovation within business far too hard and this observation might argue for a better viewpoint on the pursuit for incremental innovation. It brings my own pendulum into a better position perhaps of valuing incremental improvements?

A few ‘call out’ points here

• “Unpredictable innovation activities always compete with predictable core routines for scarce resources.”
• “Poverty-related or persistent problems may not need innovation solutions but rather committed long-term engagements that enable steady and less risky progress”.
• “Innovation is not triggered by change but progress and impact may come from dedication and routine work” and that this can challenge the argument for more innovation.

Recognizing the value of productive innovation.

The report uses as their innovation type “productive social innovation” and argues the need to rely heavily on trial and error and constant organizational learning to make this truly productive. To yield improving results where scale is critical.

The value of learning from failed innovation.
In the world of complex social issues innovation actions are inherently unpredictable, often placed in hostile environments, where you need to understand local power structures and the many root causes of the situation you are attempting to solve through innovation.

The call-out for me here is the emphasis for the systematic learning and building the knowledge base that provides the capacity to innovate or not. Also each situation needs significant evaluation before any adoption of practices from other places

The impatience with making fast progress
The report touches on “doing the right things” but it is within the unique dynamics and contextual factors that often innovation is prevented from happening. Innovation relies on a constellation of many enabling and contextual factors fueled by excessive optimism of the ones pushing for innovation solutions. There is so much that can stifle innovation or derail the process.

The recommendation is for greater critical diagnosis and evaluation of all the negative factors and hurdles that set about unearthing a large number of cognitive, normative and political factors.

You simply can’t reply on “simple recipes” as a prevailing dogma or well-meaning recommendations, it boils down to exploring the factors, complexities, challenges and realistic time-scales involved in dealing not just with the poor but all complex social challenges.

My call out here: I find this such a timely reminder for all innovation, as business leaders constantly express their frustrations with innovation failing to deliver.

The learning for me here is from the report is this increased emphasis on understanding all the negative factors that constantly block innovation and these are different from one situation to another. The environmental analysis becomes vital.

A summary within the report gave me these thoughts.

1. It is time to move from innovation as an ideology to innovation as a process—a transition that might be less glamorous but will be more productive
2. These recommendations should enable social sector organizations, their stakeholders, and researchers to develop analytical models and tools to unearth negative factors that prevent productive innovation.
3. Similarly, funders who carefully think through the implications outlined in the report may find ways to escape over-supporting fashionable innovation initiatives and under-supporting promising but difficult innovation efforts, particularly those in complex environments where formulas for social progress have not yet been found.
4. Finally, the process approach they are recommending to social innovation is an attempt to swing the pendulum back from the supply side of social innovation to the demand side of social innovation.

The authors finish with “Our hope is that an increased emphasis on innovation as a process will help avoid bad social sector investments and thwart unproductive debates about quick fixes to entrenched social problems.”

This report gives a useful reminder that there is a lot to keep constantly learning about the differences within innovation

This report gave me a shift in insight by explaining many of the enabling factors for organizations already established, that are searching to operate at scale within specific social contexts.

Incremental innovation is where they might create more social value through focusing on continuous ongoing improvements to extract learning, and reinvest this into scaling improvements to then build this into further capacity.

Also we can’t take anything for granted, the context, the environment, the application of different types of innovation all are unique and simply ‘applying’ general solutions just doesn’t work. I have argued this consistently but this report deals in understanding the specific conditions for a ‘given’ type of innovation as being essential to be really alert too.

Again, this report is “Innovation Is Not the Holy Grail” and well worth your time to read.

Seeing innovation from a specific social perspective has some very useful learning from a business perspective.

By understanding the value of incremental improvements can be more valuable in certain contextual situations than simply applying additional innovation creative investments without understanding all of the factors behind the challenges that are being tackled.

The post There are no easy innovation answers. first appeared on Building Your Innovation & Ecosystem Intelligence.

For me, one ‘type’ of innovation that seems always to be often passed over is distinctive innovation in discussions. Why is that?

Most people work away in the trenches of incremental improvements and these outputs make up the vast substance of innovation activity.  Many working in these trenches of innovation on a daily basis would love to be part of a breakthrough but tend to find this is always ring-fenced for a few others to work upon. All they can often do is gaze over the fence or quietly accept this divide simply goes on.

I believe many who work within innovation simply do not share in this delineation of innovation activity, as it divides talent into separate teams, often pitting scarce innovation resources against each other, often in many unseen ways.  This divide of activities is often a real pity but perhaps another story for another day we can explore.

Disruptive innovation is seen, partly by the way it has its effect on us and our lives. Many of us are always happy to discuss disruptive as long as it does not have an impact on ourselves, on the receiving end.

As long as we are the ones doing the disrupting, or just wanting to show off the status as being early adopters or within the early majority of the innovation adoption curve, then we love disruption. Otherwise, it is a very uncomfortable space many are not prepared to travel to.
I would suggest most people understand incremental as the first type or basic stage of innovation, especially in larger business organizations. For me, large organizations give this incremental area far too much of a focus in their resources and efforts, to the detriment of other options which is partly due to their risk-averse cultures.

I really do think though, they miss a trick, by failing often to ramp up to breakthrough or disruptive innovation, by not focusing on building a real capacity to strive for ‘distinctive innovation’ on a more consistent, even sustaining basis.

We should move out of the incremental trap far more and not continue to reinforce it as many do. Let us name and shame the incrementalists and get them thinking more about distinctive innovation.

The missing value of distinctive

I think we miss something and it is a great big pity. Distinctive innovation is actually not just the middle ground, the passing through point towards breakthrough or disruptive but it is the inspirational point for all of us to rally around far more than we do.

Inspirational is really important, it is a great motivating point if we can all achieve far more in our identity with something distinctive than just incremental.

Whatever we work upon in innovation we should seek something distinctive as an outcome. I don’t regard the latest flavoured yoghurt, improvements to the speed of our computer processor power or a few more pixels on our I-phone as anything more than incremental. This is to keep pushing up the awareness curve to extract longer value from the brand or product. I’m looking at something that makes it stand out, to be distinctive.

A transforming point for all to all gather around

I think there is far more value in talking about this transforming type of innovation that I call distinctive. It is not a complete breakthrough, it is not something that really disrupts an industry but it enables a certain leadership status, a chance to build a reputation for your brand or service.

Distinctive innovation gives you the ability to build and lead in either design, solution resolution, improving function etc., etc. We forget to talk about this type of innovation as we move from incremental to breakthrough.

I believe there is a clear consensus-building point for all working on innovation would want to achieve, that is knowing they are delivering something distinctive. It is the new innovation neighbourhood we should all move toward and plan out. Let’s find ways to get out of the overcrowded incremental slums.

Most people can’t jump or not even be able or allowed to think about breakthrough, as that is far too often  “left to others” What they can really identify with is working on being more distinctive and less trapped in the basic, incremental mindset.

What do you think?  Would you want to be associated with something distinctive, I would.

The post We seem to pass over distinctive innovation, why? first appeared on Building Your Innovation & Ecosystem Intelligence.

I call this the innovation rates of exchange.

A little of the theory: Coherence between organizational context and coordination of outcomes is subject always to those natural tensions of planning, resource allocation and the time imposed. Often decisions have a real tension built into them and they ‘shear’ against the real forces in play.

Like our tectonic plates ‘shear’ and cause earthquakes, the ‘shear’ effect has a disruptive influence on innovation outcomes.

Often the time horizon of possible desired innovation often has these real conflicts. The actual realities and needs of the organization we lower the innovation impact in final delivery. We fall back on incremental solutions as the organization does not have the patience, appetite or desire to see through the potential fully.

So that puts the theory out there.

It is such a pity the different time horizons for different types of innovation are not simply treated differently in most organizations thinking and planning. We need to ‘account’ for innovation differently.

This is where my suggestions around the three horizons can partly help, these I have extensively outlined in previous blogs to see the value of different mindsets for different horizon thinking.

Different types of innovation need to be treated differently- certainly more than other parts of the business in the planning cycle.

Sometimes innovation cannot fit neatly within timing budgets, being assigned yearly targets and having tidy plans for allocating resources and expecting results. Innovation is simply messy; it does not often fit the norm of budgetary planning.

There is a need to treat different levels of innovation differently. Incremental, Disruptive and Radical all have distinct characteristics that often don’t fit the norm in organizational mindsets to allow them to be worked through at their ‘right’ pace, we force them far to often.

We have three emerging horizons that need different treatment for innovation.

1.Those innovations meeting given goals– these should be within specified period covered by a yearly plan and cover mostly incremental innovation.

2. Objectives that are more disruptive in nature-these are often attained later, after a lot of experimenting until a clear approach emerges. These need to be progressed within the period but have a likely longer horizon, in this case our horizon two within the three horizon framework but usually more than one planning cycle of 12 months. Sometimes they can take two to three years to emerge.

3. Ideals that offer Future Radical Promise– unattainable within the usual time period, more longer term, but the progress is certainly possible during and after the period planned as they move from a weak signal or an aspiration point, by probing and investigating over an extended period of time.

As this flow of understanding gets translated into something more tangible, as the future simply ‘firms up’, it falls more naturally into what fits more in the longer term horizon perspective but still needs allocating resource within the planning cycle.

Breaking down these into milestone achievements that fit more within traditional planning cycles would make sense.

Our existing planning does needs to account for all three, they cannot be simply fitted into one set of plans, all having clear metrics and financials. In many cases it simply ignores the differences completely and forces shortcuts, dilution of a great, potentially radical idea , so it becomes ‘boiled down’ into a series of part disrupting but more often incremental innovations.

The search for breakthroughs

Not accounting for those vital differences simply reducing the chances of more radical breakthroughs, the very thing the C-Level is often crying out for. We need to think our ‘numbers’ and planning differently for innovation, pure and simple, otherwise you end up with innovations competitors can easily copy, and quickly and you chase each other to the point of ever increasing commoditization.

Innovation has its own rhythm

We need a change in planning out innovation, it does not ‘beat to normal time’, and it does certainly have its own unique rhythm.

Any coherency of innovations purpose, of what you want to achieve, and applying this in a rigid accountancy planned way does not work, unless you treat innovation differently in planning cycles and recognize these clear different horizons.

Innovation operates through a different set of behaviours and also in its delivery commitment and purpose from ‘business as usual’, it is challenging and searching for “business not so usual‘ that provides new value. This requires different mindsets at the C-level to manage this dual thinking.

They need to manage expectations of when the potential value being extracted is worth and be patient for achieving a far more impactful return on investment. Breakthroughs happen but usually with a lot of hard work and a sense of commitment, even when you have setbacks.

Different innovation requires different thinking and planning. It is these different ‘rates of exchange’ in understanding that need more understanding.

Perhaps by using the three-time horizons framework it might give innovation a more appropriate context to plan them differently than the present and permit more disruptive and radical breakthroughs to occur.

The post Innovations ‘rates of exchange’ require better understanding first appeared on Building Your Innovation & Ecosystem Intelligence.