The post Constructing Innovation as Value Management first appeared on Building Your Innovation & Ecosystem Intelligence.

Working through these as essential combinations can become the real enabler.

Here is my solution that I think is worth working through, to firstly absorb and then consider for applying to your own innovation building activity. Try it!

I have worked on a formula SCA = II + OC + EE + MLC + RNE for this. I have never published the make-up of this in the public domain before, although I had briefly outlined it in a past post here.

In that post I outlined my thinking and I do not think it needs repeating, does it? So onward…….

The formula is the combination of positive relationships between the following interrelated parts:

Seeking out a working Sustainable Competitive Advantage (SCA)
What do you want to achieve from selecting the expected SCA  outcome choices? What do you need to frame as the SCA by using the parts of the formula?

• The extent of market advantage (posses distinctive advantage)
• Competitor’s difficulties to duplicate this, where the unique advantage is often found
• Strategic leadership is prevalent and nurturing and valued
• Understanding “superior” marketplace position (in revenue and cost advantage)
• Creating it, capturing it and keeping it distinctive
• Facilitating, accelerating and sustaining the diffusion process across the organization
• How do you seek relative advantage, achieve compatibility, reduce complexity, encourage trail-ability and ensure observe-ability?
• Advancing the clear “line-of-sight” new business always requires to execute upon.
• Looking to achieve better visibility, flexibility, extending collaborations and advancing concepts through technology and structured approaches.
• Other strategic objectives require distinct capabilities to be built into these 5 groups

Innovation Intensity (II) and the degree of adoption

• The extent of product, process, managerial and business innovation
• A mix of technological and non-technological innovation
• Impact of innovation expected through strategic leadership
• The magnitude of change capacity required through innovation
• The scale of innovation impact desired
• Plotting out the roadmap for innovations evolution
• Exploring the different types of innovation and their potential
• The use of Business Model innovation to change the proposition
• The essential linkage between strategy and innovation outputs and outcomes
• Investment x activity x focus x disruption = return on innovation expectations

Organizational Capabilities (OC) in developing their distinct differences

• New knowledge acquired and embedded, exploring the new contexts and ways
• The ability for value-creating activities to be accumulated, integrated and transferred
• Adaptive learning (leads more to incremental innovation)
• Generative learning (willingness to question long-held assumptions)- favours radical
• Relational learning (collaborative linkage, networking for open innovation)
• Distinctive learning of new knowledge to create added value directly.
• Experimental learning tolerance with new ways of doing things
• Learning from both internal and external knowledge focused positions
• Encouraging co-production of concepts (ideas, components, systems, R& D)
• The ability to also unlearn (long-held assumptions, group-think)
• Structural evaluations into routines, procedures, systems, culture etc
• Releasing latent capabilities- discovery and exploitation- as capital in waiting
• Linking the three capitals- human, structural and relational- for interactive leverage
• Combining complementary assets and dynamic capabilities to configure & reconfigure
• Build the technology skill sets focusing on collaboration
• Encourage techniques for formalization, exploitation and generation
• The value of Absorptive Capacity in acquisition, assimilation, transformation and exploitation.
• Seeking out the buy-in from the cross-functional business units

Entrepreneurial Energy (EE) promotes and generates

• Entrepreneurship facilitates generative-learning activities as the focus
• High tolerance of risk-taking, exploring the unproven, seeing patterns and shifts
• Pro-activeness in new directions, new capabilities, dynamics and mindsets
• Use of accumulated capabilities (coordinating, preserving and supervising)
• Key decision makers’ traits to investigate and encourage change, risk-taking propensity
• Positive outlook towards diversity & different behaviours, discovery and experimentation
• Providing a learning environment through trials and pilots that can scale quickly

Market Learning Competence (MLC) for establishing a clear awareness

• Through marketing capability and market understanding vigour
• Market focused to acquire, disseminate and use the knowledge acquired
• Exploit through sensing & scanning conditions for diverse and unrelated opportunity
• Possessing a close interaction with customers, users and suppliers
• Ability and speed to react to the variability of the environment
• Possess a high level of competitor awareness
• High levels of customer orientation and “over-served”/ “undeserved” insights.
• Always orientated towards innovation, not just new product development
• Building agility and responsiveness to constantly changing market conditions
• Getting to the “heart of the customer” in outcome-driven ways for their needs.

Relationship & Networking Effects (RNE) and its support to enhance

• Building greater exchanges of knowledge through interactions
• Encourage the constant practice of sharing
• Promote systems of relationships and the structures needed
• Strengthen alignment and appreciation of value-adding activities
• Connecting Knowledge Management with finding ongoing Business Value
• Combing Knowledge with constant practice & sharing
• Support to enhance the needs and guidance through good governance
• Resolve actively the barriers and concerns
• Build trust, connectedness and belonging
• Build a common purpose and share the vision
• Build an identity and offer difference to stop the leakage of knowledge
• Actively connect people to people, people to knowledge
• Gain alignment, be transparent, build identity and encourage networking
• Support the patterns of exchange, their impact on value,
• Assess the dynamics and new value potentials in the different exchanges
• Linking the collaborative efforts to define, align and stimulate innovation targets, strategies and initiatives to support ongoing and sustaining success
• Measure robustness, diversity and renewal
• Searching for defining and designing complementary platforms.

Brief background and some thoughts
On first take all this seems to be a long list, actually, this is offered on purpose. You add your own distinct needs within this formula but take care not to dismiss any suggestions offered here, without ‘good cause’.

The challenge is how you see it, how you value its ability to connect context and the content or aspects you want to focus upon. These structures or building blocks you can start individually adding your unique “flesh to the bone”.

Let this become an innovation capability formula that stays in your head and you constantly ‘walk around’ its parts to get an increasing connection and momentum to build its value from others needing to relate to what is important to building sustaining capabilities.

I got the original idea of this framework a number of years back by reading through some different thoughts that JayWeerawasdena had put together in a number of assorted papers. These assorted ideas and concepts partly fueled my idea that led to this ‘combining’ concept of mine, finally published here.

I feel we need to provide a framework that can be worked in ways that build your own unique capabilities. By focusing on these key components that do tend to make-up innovation that leads to sustaining ongoing competitive advantage you can frame and measure activity.

The other formula to measure this against

The one other formula I use with this is measuring its return on investment. This is

So a framework and a formula to measure innovation’s impact. Does this make sense to you? It has to me for years. I just thought I’d publish it a little wider than limiting it to a chosen few.

Really do think about it, experiment with it and see if it does not give you the increased intensity and focus you are needing for building greater capabilities.

I think you will find it does give you a powerful framework to build those capabilities around, needed to deliver real advantage going forward.

The post Building an innovation framework that has real capabilities as its formula as its heart. first appeared on Building Your Innovation & Ecosystem Intelligence.

The competition seems to be warming up in the more ‘standalone’ out-of-the-box segment and the innovative tools being provided are certainly accelerating the innovation process.

The software being provided is going well beyond the simply mining and capturing of promising ideas. The solutions are moving into sound idea enrichment, evaluation processes and managing a portfolio of innovation in more holistic ways.

The providers here, namely Hype, Brightidea, Spigit, Imaginatik and a growing group of others have been significantly improving their ‘front end’ offerings to capture and develop concepts

They are increasingly turning their attentions to the ‘back end’ and support with a greater focus on governance, knowledge repositories, campaign cockpits, evaluation and dialogue exchange mechanisms. Mobility has also been a growing feature to capture innovation ‘on the go’.

Will we see Emerging Enterprise Solutions for greater integration?

The change that we are beginning to see emerge is the growing interest in innovation management software from the bigger

Enterprise integrators. In particular, I have become more aware of the advances taking place in managing innovation from SAP, or the potential promise yet to emerge.

I have been working through a presentation made by Marco Cigaina from SAP’s Global Services Innovation group recently and felt the concept outlined was beginning to frame innovation and its management in a solid way.

One that can potentially move software solutions into a structured, comprehensive and consistent set of concepts to build around for innovative applications.

I’m not sure if SAP is advancing this as their innovation roadmap or it was just a conceptual framework offered by part of the organization to explore and contribute to thinking. I want to learn more as I think it has some potential.

They (well at least Marco) are calling this (at present) the Innovation Management Framework building upon applicable foundations of knowledge for innovation management and working towards an overarching execution model.

Judge for yourselves on this suggested innovation framework.

You can watch the video here, it is about 50 minutes offered up as a workshop from the SAP University Alliances led by Marco Cigaina. He has also written a book on this, go here to find out more.

The Innovation Management Framework presented in this book and workshop articulates innovation management in a structured and consistent set of concepts and practices, and focuses on their concrete applicability to the objective of enabling and fostering innovation in established companies. It provides a sound starting point in my opinion.

Here is the Innovation Management framework.

So what is making up the thinking that goes into each of these sections on what this framework seems to offer?

For me, it certainly feels to have advanced the potential for innovation to eventually become a fully integrated SAP solution

It has six aspects within this.

• It starts out to build the innovation taxonomy and where a common language and the critical capability aspects begin to be formed. It is suggesting to frame around innovation capabilities, projects and outcomes and looks to focus on scope, scale, perspectives, impact and discontinuity aspects. It needs to build processes, methodologies, tools, business context, strategy and architecture for managing this for individuals, teams, organizations and networks. I like this as a higher level entry point.

• Then they suggest you move through the enterprise and strategic needs and layer different aspects of the Enterprise, Strategy, the Business Model, the Business Process, the Solutions, Technology and competencies needed. This part, for me, remains a little thin but does attempt to capture the different levels of the enterprise’s need and strategy to link into and flow. I would argue my outlined Executive Innovation Work Map framework would be useful here to ‘flesh’ this part out further, plus other thoughts I feel can be built into this part.-

• Then you move into processes and methodologies. The classic search and idea through to commercialize and monetize these. The structure of passing through evaluation and selection and then implementation is sketched out. The underlying structuring into research, ideation and creative methodologies, collaborative processes and tools, design thinking, IP management, Knowledge management, new solution development, project management to commercialization offer a beginning of a well- thought through a phase to allow distinct processes and methodologies that can still cater well for different Enterprise needs.

• Then the People and Networks draw in systematically all the partners, influences, institutions, crowdsourcing, customers and lead users and they are highlighting company culture, open innovation and structuring this again into a taxonomy making this a far more advanced approach to managing innovation today than what I have heard before. It reflects a more up to date view and the importance of people, their relationships and the networks you need to build and exploit for innovation.

• The part that I particularly like is the Orchestration and Governance section. It frames these into vision and strategy, the governance roles, a section called the initiatives management one where portfolio management sits alongside venture management. The other key aspect I really like is the focus on organizational learning where you manage through a maturity model and equally feed into the knowledge repository and finally with metrics associated with these to manage and monitor the innovation activity.

I certainly believe orchestration and governance is badly undervalued by many organizations within their innovative approaches and this would advance the thinking and give orchestration and governance its place of critical importance by offering this component within any innovation framework. I’ve written about the role of governance a few times, as well as the importance of orchestration, so I welcome this more dedicated focus.

• Lastly, the Execution model covers set-up structures, analyse and design, planning, execution and evaluation steps. This is to be regarded as iterative in approach. Again, treating execution as a standalone step I think has real added value focus. I’ve learnt that execution is a rugged terrain full of as much a need for concerted leadership as the other parts of innovation and its management. One aspect is building a sustaining execution machine and is the final frontier in managing and delivering innovation successfully.

The really potential promise of Enterprise Integration
The other part of the thinking and certainly critical within any SAP solution would I assume, be any innovation system that needs to integrate into other information systems and processes.

That is the strong selling point of SAP, its focus on integration, although ‘the cloud’ might be challenging this and altering this possibly.

If SAP can achieve that ability to integrate this into being part of the Enterprise solutions then we do have many of the existing impediments to innovation adoption melt away. Offering an integrated solution would really offer innovation and its management a real opportunity to become fully embedded within our organizations.

As I said, I’m not sure where SAP is in actually realizing this Innovation Management Framework. All I can feel it has a real potential to expand and explore further as an overarching approach.

This potential framework is certainly viewing IM in a more holistic way, it is moving beyond ‘just’ ideas management or standalone components, often like PLM, or PPM and would significantly advance innovation to be fully embedded within our organizations.

We really do need to resolve this growing need to get technology and systems ‘talking’ innovation, to establish their position and integrity and have integrated interfaces into a total ERP system.

Innovation management today is often standing outside any integration structure. Some may argue it should do but I do think innovation is often missing the critical line of top management sight and suffers accordingly in numerous constraints.

Lacking this holistic understanding of innovation often makes it hard for top management to gain the confidence or be supplied with their required view of innovation and all that is associated with it. They want and expect a clear line of sight. We spend far too much time trying to connect innovation to the Enterprise.

Can this change? I believe we are getting closer to a point of having integrated software solutions for innovation.

If innovation management can be integrated into the organization’s systems many of the current problems, barriers and issues surrounding innovation might begin to melt away or change the existing unsatisfactory result game of today.

Innovation has many touchpoints, and a myriad of dimensions that need to be aligned and integrated and I genuinely believe the software provider who takes a more holistic view of innovation management can make a significant advancement in where we are today.

I simply like these perspectives offered by Marco through his research and work undertaken with SAP and feel it does makes a very credible initial attempt to frame innovation in a well-thought-out way. What do you think?

The post Are we moving towards integrated software for innovation management? first appeared on Building Your Innovation & Ecosystem Intelligence.

I often think of the parable of “The Elephant and the Blind Men” when I get into discussions about measuring innovation.

What are truths, what are the fallacies?  The parable implies that one’s often subjective experience can be true on your need, but not necessarily the other person’s view of their understanding of value.

You get, as the end result, a failure to account for other ‘beliefs’ or capture the real value and miss providing broader motivations to encourage the innovation elephant along.

Establishing the right metrics that motivate and yield the result you are looking for is sometimes a tough challenge. You should always start with the bigger picture, organizational needs and then design the metrics and cascade these throughout the organization.

This part of the series explores the Innovation Work Mat

In a series of articles I will be looking at each of the seven components within the executive innovation work mat to raise questions to probe and prompt the necessary thinking that needs to be made in organizations at different management levels determined to build a lasting innovation competence and structure.

Within this work mat series I’ve already offered some opening thoughts on the role of Governance and Innovation, and also the Environment for innovation matters to innovate followed by the innovating conditions for your Culture and Climate.

This is the fourth article aimed at deeper engagement and understanding of the connected parts within innovation management on Metrics and Motivations.

Raising some initial thoughts here.

We really struggle to describe, then measure and then find the right motivations and reward mechanisms and then achieve broad agreement, on something as important as innovation.

If we link metrics into the reward and compensation structure then we release all the energy, passion and anguish and these can serve in many contrary ways.

Linking compensation into all the competing motivations to manage and reward innovation activity is fraught with problems and can have many negative consequences.

Again my elephant comes back into view wandering around in your board room – it can disrupt everything as it charges after the results that it wants, trampling much that is good in its path.

Today’s particular trend of focusing on short-term performance can limit innovation significantly and has innovation consequences.

Let’s look at metrics and motivations with greater connected awareness.

At the end of the story on the elephant and the blind men, a wise man was passing; listened to all the different views of why no one could agree on what they thought the elephant was like. The wise man then replied “All of you are right; you were touching different parts of the elephant so the elephant has all the features as you all said”

Metrics and motivation can really make innovation happen

The value of the measures lies in resolving these eight different questions: 1) are they clear and simple 2) are they relevant to you and the central issues 3)are they timely in what can be achieved, 4)are they credible to the stakeholders involved 5) do they relate to the importance of the goals or trivial, 6) can we act upon them 7) are they consistent to the strategic message and aligned, and finally, 8) are all the investment in these measurements and motivators to capture and analyse, seem sensible and affordable, and lead to real impact in aiding innovation to achieve the goals required.

We do need to focus on the future innovating purpose surely?

The innovation links to any measurement system I would argue should point towards the organization’s strategic need and the innovation outcomes required. Within this there are broadly three parts: 1) knowing the organization’s future-orientated vision and the general direction that innovation needs to take, 2) along with the strategic carriers in types, priorities, functions, the indicated mix of innovation activities and then 3) the growth gap that exposes the organizations’ challenges, so as to bridge these knowledge and resource gaps.

These can build innovation capacity today for future innovating outcomes as they are focused on future work to be done.

For me the output intention of the Integrated Executive Innovation Work Mat should be driving the business case for how innovation contributes and offers the what, where, when, and why within the communications for others to be mobilized into actions and build out build upon this strategic working document.

Then we set about communicating it to the organization

I have written before about the cascading effect and communicating value that can support this. Then our metrics begin to cascade down to bring people, the process, and the innovative design of inputs and outputs turn into successful alignment outcomes can come into play. I’ll broaden out my thinking on this area in the next post.

It is within the leadership of organizations to become intimately involved in what is important in innovation for their organization, otherwise, we are back to the elephant and the blind men. All others simply believe they have the answer. Leadership needs to really engage in where it ‘expects’ innovation to yield its results and then ensures it links reward to this set of outcomes.

So what does success look like?

We should start with the ideals that our innovation activities should be pervasive, to be sustainable and we need to deliver clear business results mapped to known and potential unrecognised customer needs as our primary incentive points.

We need to layout the building blocks to ‘group’ management and employee identification with what is innovation success. It can begin to motivate all the stakeholders involved. This gives us the opportunity to evaluate appropriate resources, provide the workable benefits related to learning, encourage the identification of problems and encourage the identification of solutions and set about communicating to all involved the understanding of what success can look like.

Building the innovation metric and motivation scorecard there are hundreds of measures you could bring into anything; the skill is you need to find only the right few that focus upon the results you really need achieving. They need to somehow “talk to each other” so they are mutually reinforcing and all involved are pulling in a similar direction.

What gets measured should connect and matter – an example

I like one I came across some years back, by Cap Gemini, which firstly suggested you define what innovation was going to be about. Their example was “a robust creative process that turns out very distinct outputs with significant impact in the market place” and then worked on a scale for assessing the degree of innovativeness on a three-dimensional grid of Impact, Distinctiveness and Creative Process.

This then becomes the measuring and motivation barometer tied to the strategic need of an organization of what is expected out of innovation. That sort of complete picture can only come from the senior managements full committed to “wanting distinct outputs of significant impact in the market place”

I think Bain & Co offered also a really valuable performance measuring framework.

This framework offers a really good structure to begin to measure and link the organization. I think it can stimulate initial thinking well.

(click to enlarge)

There is a case for approaching measurement differently through the intangibles that make up most of our capital.

Measuring attempts need to take into account the many intangibles that make up innovation and make them tangible. Understanding the relationships within our intangibles allows groups to benchmark, diagnose, allocate resources, inform others and compensate employee’s efforts through their ongoing knowledge learning. The understanding of our intangibles is for me vital to crack.

Getting this right is increasingly important as the intellectual capitals are being recognized as the real value creation intersections. Establishing the metrics that focus on generating valuable innovation also helps extend ambition and future goals, pushing future innovation strategies as you grow in confidence and understanding of these dynamics.

To end we go back to avoid the story of the Elephant and the blind men.

By taking the integrated approach through the work mat, senior leaders can  offer strategic guidelines into the measures and motivations, by laying out their beliefs and expectations from innovation. They can’t afford to leave this open-ended, just being hopeful, innovation activities need essential alignment.

If we continue to allow the ‘blind men’ to offer their separate opinions and then decide in isolation of the bigger picture, they ‘see’ only their part of the elephant.

I believe if you put in place that critical strategic innovation document, wrestled out of engaging across all the work mat parts, the metrics and motivators can ‘form’ around this strategic intent. This can drive innovation performance.

Seeing the whole picture is the team sitting on (at) the top, directing the innovation elephant along its journey to the destination where they want it to go. Metrics and motivations follow as the path is clearer to measure and travel. We need those wise men to clarify this.

The post Measuring and motivating the innovation elephant first appeared on Building Your Innovation & Ecosystem Intelligence.

I recently participated in a survey for APQC that was looking to identify the hot topics within product development and innovation. One or two hot spots surprised me, others less so.

In the round-up of results almost two-thirds of survey respondents have placed refining the identification of customer needs and remaining competitive in terms of profit at the top of their product development agendas. I like the increasing emphasis on identifying customer needs

Among the potential research areas respondents were asked about, they felt that developing talent to drive innovation was the most important. The second one was around rapid product development: How to Move Products to Market Faster.

The one that really caught my eye was organizations have allocated the most funds to improvement in developing talent to drive innovation. This is heartening but also a worry.

We need to really stop and think about this before spending further funds

I think before we jump into spending more funds on developing talent to drive innovation are our organizations that clear on what they want innovation to achieve? Growth is one but how? What type of innovation is needed, what are the implications? Have we created the right conditions? I could go on but spending to develop your talent to drive innovation you do need a good understanding of the what for and where this needs directing.

A second voice of concern also caught my attention

Also this week a conversation caught my attention that confirms this growing concern I have had that innovation is becoming a major strategic issue. It does seem Strategy and Innovation concerns have converged.

Recently Rita Gunter McGrath a Professor at Columbia Business School and certainly globally recognized expert on strategy in uncertain and volatile environments was discussing the three top hot button concerns at the leadership level of large organizations. She discusses this here with Booz & Co.

So what are hot button issues keeping our leaders up at night according to Rita McGrath?

The three hot buttons she is constantly hearing across organizations are firstly leaders feel their organizations have not got the right talent or skills in the right place to lead projects.

The second is around the struggle of innovation and growth, and they are simply struggling in how to do innovation. In Rita McGrath’s view the organizations do not have systematic systems in place, when organizations do innovation it tends to be ‘one offs’.

The third and final hot button at present at the strategic level is a lack of line of sight and worrying about what is actually going on. These are leaving leaders not comfortable to make clear, confident decisions.

So are we seeing the effects of how our organizations have been managed over the last few years?  Is it all coming home to roost? The leadership may worry over innovation and poor growth but it is in really in their hands to do something about it. Spending funds on developing talent to drive innovation is part of the equation but it is only part.

So how are we going to develop our talent for innovation?

Does the leadership of organizations ever listen or read about innovation in enough detail to understand all the implications, constraints and pieces to put into place? Have they recognized their role within developing innovation as a core discipline within their organizations?

To care about developing a clear, strong innovation set of capabilities you need to observe and reflect on what is causing poor innovation results. A significant portion of the blame is because the leadership, for whatever reason, simply does not get fully involved. They need to determine and build the innovation capabilities into the core of their organizations day-to-day operations. It needs to be recognized as a core competence alongside all others.

How often do we hear about the constant time spent on validating innovation, arguing the innovations corner, the pleading for more resources, the layering on of unnecessary structure, demanding impossible ROI’s and the intense focus on the short-term. Innovation is often just failing to connect into the mainstream of organizations, yet we are told our leaders are worried about growth, not having enough developed talent to manage innovation and the projects yet innovation is in their top priorities.

 Yet they worry over ‘line of sight’. Their third hot button

Of course they do, innovation is constantly being driven into the dark corners of the organization, it is being treated as opportunistic, like a light bulb you can turn on or off when it suits the whims and fickleness that our organizations leaders often seeking to respond to a crisis expecting innovation to dig them out of it. Innovation needs to become systematic.

Innovation needs far more serious attention at the top of our organizations, it needs strategic innovation leadership. Until leadership leads by focusing back on the longer-term, innovation is going to deliver continued disappointments. Also leadership in organizations requires stability to sustain and deliver on their initial promise.

Aligning leadership, the strategy needs with innovation activity.

Leadership needs to recognize their role in making innovation a more sustaining discipline. They need to give this a focus where they initiate and provide the essential strategic inputs into a well-designed innovation framework and ensure this is put in place.

To develop the talent to drive innovation you have to put into place all the conditions, structures and guidance this needs. I’ve written consistently about the need for this by suggesting the value of the Executive Innovation Work Mat approach.

Setting the strategic innovation framework through this work mat approach allows for the structure to be put into place that will develop the talent to drive innovation. It provides the conditions and strategic innovation guidance.

Resolution for innovation starts at the top.

If our business leaders want to resolve the present hot buttons of poor growth, sporadic innovation and achieve a clear line of sight as Rita McGrath is suggesting, then I’d suggest you take the time to read what I have written about this, here on this site by entering ‘work mat’ into the search box for starters.

Gaining better understanding of structuring and building innovation capabilities

Building innovation capabilities to drive innovation takes time. I would suggest you find the opportunity to read the ‘White paper’ or the foundation document on this innovation work mat. Also some of the supporting articles over at my Issuu dedicated page here, where you can find different papers that can be visually picked out by the one to six billiard balls to understand the thinking behind this framework further.

Try to answer the seven parts to the innovation leader’s litmus test or exploring the ten great intractables for innovation resolution.  Each prompts the thinking. Innovation needs to challenge prevailing organizational thinking. Innovation surprisingly enough does needs to be justified so as to build its sustaining business case . it is through this structuring you gain the serious attention of senior management for them to address the role they play within this innovation framing.

I would argue you need to make the innovation value proposition afresh

Then, and I am being deadly serious here, you need to go and actually sell what systematic innovation really means as a real value proposition to the leadership.

This VP needs to focus on what needs to be done to turn innovation into the engine of growth and through its strategic design, put in place the vehicle to attract and develop this innovation talent. You are tackling the leaderships hot buttons of concern.

Any development of talent needs a well-structured approach but you need to put in place an awful lot to really give the type of returns these ‘driving innovation’ needs. If leaders are worried about poor growth, disappointed with innovation and worry over ‘line of sight’ then innovation capability needs radically redesigning. Much of the present innovation is caught in a legacy trap, this needs overhauling. How will you think about addressing this?

Do you want to really develop the talent to drive innovation? If so then talk to me, I believe I can deliver a clear return on your investment of allocated funds.

The post Developing talent to drive innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

Innovation cannot exist without all the capitals that contribute to its make-up. Yet we simply fail to appreciate all the capitals that innovation requires. It is a real pity as they are truly nested.

Equally many innovators are simply not prepared to put in the necessary work to achieve this understanding and the organization’s innovation looses out, stuck in perpetual incremental mode, lacking in anything really new or radical.

All the capitals ‘fire’ innovation. They make innovation combustible.

More often than not when we talk within business of capital we tend to default to the financial kind. Of course providing the financial capital into innovation is vital; it provides the potential ‘burn’ but what is often understated and certainly under-appreciated is the other capitals. These have been ‘tagged’ under intellectual capital or are often ‘lumped’ into our intangible assets.

What we need is to recognize the real “nesting effect” all our capitals.

Each of our capitals performs a particular function and the overhaul make-up of their understanding becomes our eventual code to perform innovation. Each organizations uses it mix of capitals to accomplish and generate innovation. It is in this mixture of combinations brought together constantly in different ways , this ‘nested effect’ that innovation occurs. The capital you ‘bring to bare’  will generate the innovation outcome or does highlights the gaps and gives real clues on where it is repeatedly falling down.

Organizations  miss the power to consistently tap into all the potential that ‘resides’ or could be added to make innovation happen. It is the unique set of capitals that offers the real potential to set each organization apart from others, it gives them the wealth-generating potential, their uniqueness and ‘chance’ to be seen as future valued.

So what makes up our capitals?   

Firstly let me offer my definition of what is innovation capital

“Innovation capital is the sum of all that promotes the development and changes required for achieving innovation outcomes, within one organization or its broader networked environment for market place advantage. These are made up of the resources, processes, and capabilities to develop a constantly evolving capacity to innovate.”

Most of our capitals are learning capitals

The more we strengthen our knowledge and value our people the more we can generate new knowledge, build greater narratives, deepen discussions, make better connections and build our interactions out across growing communities. The more we discover, the more knowledge we gain and this leads up to determine a potentially better decision-making that should, in theory, give greater confidence that our invested financial capital is in ‘good hands’.

The power lies in the linkages we can forge, in acquisition, in assimilation and then into eventual transformation that allows known knowledge to become new wealth-generating innovation..

There has been an incredible ‘body of work’ on what does make up our capitals.

For many the term intellectual capital tends to put people off or prompt immediate definitions of “oh you mean intellectual property” so there has been a concerted re-framing to form around ‘our’ intangible assets instead. Our intangibles are far more essential today to understand. They are made-up of a complex set of assets.  These can be made up of software development, product design, branding and training to go alongside intellectual property and still be accounted for, yet we have still not truly scratched the surface of capitals. There is so much more that is our true capital in organisations.

There is a ‘decent’ consensus today that our intangible capital drivers are made up of three parts: human, relationship and structural. Nested underneath these are perhaps fifteen or even more, one such view pioneered by Entovation, which is led by Debra Amidon.

For Human capital it is made up of knowledge, leadership, inventing, innovating entrepreneurship and creativity, and finally reputation capital

For Relationship capital this is made up of diversity, brand, network, cultural, social and community capital

Then for Structural capital this has strategic, organization, intellectual property, technological and environmental capitals.

Then we have the ‘new kid on the block’ in Natural Capital, to help advance the business case for better ecosystem management, with a focus on innovative initiatives to reduce supply chain and operational risks, cut business costs, enhance brand reputation, and fuel revenue growth and finally to seek out raw materials that come from a sustainable source.

Critically important is the sustaining within our consumption and diminishing natural resources and this Natural Capital is increasing as a major focal point to understand and pay increasing attention too.

Many capitals do make up our organization’s real stock and flow

I have to admit these are a lot of capitals to swallow and set about giving dedicated focus too. Yet it is this ability to recognize each capital and its make-up that when combined does offer the value creation capabilities of organizations.

The greater we can identify the underlying aspects of these capitals, the more we can combine them in unique evolving combinations to bring about new value creation. I’d start at the three broader intangibles of human, relationship and structural and then once you have your ‘intangible bearings’ you dive deeper.

It is in this greater use of capitals that lays the true value of the organization and its wealth generating capacities.

Outsiders really can’t figure out the potential for future value while these intangibles remain hidden. The current balance sheet reports the financials, normally reliant as quantifiable only on historical data, even with some sort of (short-term) future commentary around market conditions, outlooks on tangible investments and generalisations on the value of people.

Somehow this needs changing. We need to gain a better understanding of the whole picture of capital investment, not just financial and the tangibles. that we can touch and see, but the intangibles that we must sense and measure.

We need to build a better value creation story.

Why I tend to pull out innovation from the above list of capitals for instance is it takes arguably the ‘raw material’ within the other capitals into the eventual commercial outcomes that ‘inform’ us of the past, present and future wealth-generating  outcomes.

It is working the combinations of all the capitals into unique combinations that give us the potential ‘stock’. Stock can be enhanced through more investment, it can be preserved through holding investment and it can diminish if it is not managed thoughtfully, or critical parts leave, reduce or get ignored.

The job today is unlocking potential, that wealth generating potential and that requires adding stock. Through focusing on the make-up of all the capitals we unlock knowledge, we can release resource from those unproductive activities and support those that promote and generate fresh value. New knowledge gives us the ‘raw’ innovation stock.

We need to know where our value creation resides – it is nested in our organizations.

By recognizing our ‘stock’ and knowledge through exploring and investing in our group of capitals we have that greater chance of value-creation. We need to move away from the bias of one capital, financial, it is not the dominating one in today’s world, it is our knowledge generating capital, those that ‘capture’ the true story of appreciating if one organization has future investment value or not, by the outcomes they generate.

We live in an evolving complex, uncertain world

In a world of increased volatility today, it is not how our financial capital alone is moving; it is how our knowledge is flowing and being absorbed. The more we absorb and then translate, the more value we have to generate our future. To make greater sense of all the ambiguity out there, we need to build our knowledge capital.

It is the leveraging of all our capitals, the understanding of their interdependence, the value of the interactions making up the dynamics within the system, the investments being made and the potential of their impact these have on the wealth generation and future value that ‘resides’ or not.

Knowing what makes-up our intangibles is so crucial within our organizations to understand.  Do you really know what makes-up your real capital?

The post Innovation requires the nesting of all capital first appeared on Building Your Innovation & Ecosystem Intelligence.

Working in most organizations you spend a disproportional amount of time on looking to achieve alignment. This can range from aligning your meeting schedules to the bigger strategic issues by gaining agreement on the way forward.

 I would bet you that working on alignment is certainly one of the main tasks that is sucking up a large part of your working day. Interesting enough the higher up in the organization you go, the more you have to seek alignment. Gaining alignment is actually very hard.

In corporate life we are constantly attempting to also link organizational goals with our own personal goals. To make this alignment, it requires the difficult aspect of achieving common understanding of all the parties for the specific purpose you are requiring, so as to achieve a consistency between ‘agreed’ objectives and the implementation of these across those involved.

In pursuit of alignment

We seek alignment to many things but three are critically important to us as individuals.

Firstly alignments from others to our creative activities, both in those that contribute to the strategic objectives and those personal ones in the work we do.

Secondly, we always need to work on how we set about the way we communicate if we want to achieve anything within a team or our organizations.

Thirdly, alignment becomes essential in how we execute, is it going to be heaven or hell or simply nicely in the middle, well done? We just can’t avoid alignment, yet we seem to do a poor job of this when you ask, why is that? We constantly talk more about misalignment.

Part of this reason we see more misalignment going on around us is the magnitude of this constant change that is swirling around us, coupled with the incessant pressure for new sources of  innovation is causing us increasing anxiety to work on the knowing/ doing gaps more and more. Alignment remains one of our best answers to communicate the ‘need to agree and do’.

Achieving alignment, arranging all those planets to be in line, can provide the much needed impact to a whole lot of what we do. Alignment also needs that other magic word of ‘objectives’, that specific need to always set clear objectives between ‘us’ to gain this essential alignment.

Understanding the complex linkages within alignment

To get closer to achieving alignment for innovation, as an example, we need an overarching strategic design, to reduce the ‘disconnects’. Innovation needs constant alignment. One essential need is to provide a well designed strategic plan that will allow the connections and  reconnects needed. so as to allow innovation that greater freedom and scope to contribute into the growth organizations leaders are demanding to keep us all ‘still on track’. We need to seek out alignment through clarification, through talking to each other, to working explicitly from the ‘same page.’

Yet good intent is not good enough as I have outlined before “However, even when executives understand the linkage, they may fail to understand how to ensure linkages between corporate strategy and innovation actually does lie with them to be communicated throughout the organization.  When executives simply request innovation and delegate the decisions and definitions to business line leaders or executives outside the boardroom they are delegating the growth and future of the organization to others”

We are constantly fighting the failures within organizations for achieving alignment

There are so many failure points. For instance how often do you see those failures to translate the strategy of the leadership’s thinking (often those vaulting high-level ambition ones) into offering the additional leadership guidance to achieve these? This lack of guidelines or framework reduces the potential for alignment, it stops turning ambitions into specific actions that allow these strategic objectives to be translated into specific realities, that others can really identify with.

We fail if we don’t have the abilities to translate and communicate those objectives throughout our organizations to gather around and work towards achieving makes significant difference. Leaders leave strategy far too much in the abstract. They need to consciously work on the design principles and downstream choices. I have offered the “choice / cascade integrated innovation model” to help in this.

We also fail to communicate when conditions in the market place show signs of real change, we stay aligned to old objectives, we don’t dynamically adapt our strategy and thinking. We allow it to remain static, locked into old, out of date thinking, missing the essentials of new knowledge to flow through adaptive learning.

Then we fail when we simply struggle within ourselves, we can’t personally or organizationally adjust quickly enough. We still find great difficulties to really learn how to pivot in larger organizations or in our personal learning, yet this is becoming essential in today’s world, to adopt to rapidly changing conditions. Take a read within Steve Blank’s postings on pivots, maybe as a start here on a critical aspect of managing today.

Then we can fail because we struggle to align organizational capabilities with our strategic and innovation growth objectives. We are constantly battling fatigue, resistance and ownership. We fail to often take the dedicated time and consistent focus to build our capabilities to establish new ways of working, to regain those creative energies.

We then really fail if we can’t convert strategic intent, this ‘strategic enthusiasm,’ into a clear translation of fresh but sustaining investments into those that can help change our organization capabilities to learn and deliver afresh but with renewed vigour . We need to align our desire with clear intent, purpose and objectives.

I’ve written about innovation failures before, it starts at the top, if you need further thinking in this area  take an additional  read but the critical point here, is recognize and then work actively on all the potential failure points that are stopping your aligning.

Once you recognize these and what they are potentially doing to you, you can address them and remove these blockages to regain the essential alignment necessary.

Overcoming potential failure, alignment might come through more dynamic linking.

To achieve a more dynamic linking we need to find new ways to translate strategic ambition into clearer downstream choices for our innovation activities. I believe we need to offer a more explicit design from the top of our organizations to guide and frame innovation, one that offers an outline of actionable design principles.

The design needs to be specific enough but without prescribing all the details. It is amazing on how much knowledge does reside within our organizations. If it doesn’t, well it is getting easier and easier to go specifically outside the organization where you will find more thoughts to stimulate the potential answers, but I’d tend to place the caveat, as long as you understand the context but these ‘answers’ can show up in so many totally unexpected places, particularly if you wear different inquiry lenses.

We need to translate the organizations innovation ambitions by providing adaptive frameworks to build within. Finally to sustain them there is the leadership need to provide all the necessary ‘capitals’ for building the required capabilities and the capacities to be understood and established, to achieve innovation alignment.

Putting together alignment and objectives needs a specific design

I’ve argued that the adoption of the Executive Innovation Work Mat does offer a terrific framework for achieving this triple alignment of 1) communicating strategic ambitions and goals, 2) aligning the conditions to allow innovation to be put to meaningful work and then 3) working towards building the necessary design of capabilities and capacities to execute around these plans.

By working through a better understanding of the innovation ‘parts’ that make the whole we can translate our executive intentions by engaging and then communicating through the work mat so innovation can become explicit to all. You come closer to organization and personal alignment. You create the conditions for more explicit outcomes, aligning activities within the overarching frame of a desired culture, environment, governance and processes that flows through specific contexts, better communicating channels and choices.

You move closer to alignment because you are all working within the same overarching innovation framework creating the common language, gaining the appropriate context and all communicating on this- you are moving closer to alignment.

The Executive Innovation Work Mat can be summarized as a place for real beneficial alignment

1. The framework can create cohesion and consistency of innovation purpose that will reduce many existing barriers and uncertainties around innovation
2. The framework itself will generate work flows that links, become more dynamic to explore and promote the holistic needs for innovation to work. In innovation skills, capabilities and competencies needed. They become more cohesive, coordinated and focused.
3. As the framework connects, in its understanding and as its impact grows, we certainly can ‘see and believe’, our confidence builds. Both formal and informal areas are addressed in parallel, growing all-round identification and alignment.
4. It can reduce present tensions and increase the dynamics within innovation in dialogues, framing and identifying with the organizations innovation goals
5. You can begin to align compensation and incentives into your abilities to generate the innovation activities that provide the impact the organization is looking for. You can understand and measure innovation impact far more through a well-designed framework

We do need a unified view of innovation design and I believe to ‘arrive’ closer to alignment there is a clear, perhaps a compelling value proposition that a well-designed innovation framework, like the Executive Innovation Work Mat does offer.

I certainly believe this can move you closer to spending less of your day working on the negatives of bad alignment into generating positive innovation outcomes, simply because you do have in place an aligning framework that works on dynamically linking all the parts, one you can gather around.

I can’t promise it might not make you business day any shorter but it might make it a far more positive experience,where you are aligning  your contributions and expertise into a specific innovation design, where innovation activities do link into organizations strategic that is needed and achieve this often elusive alignment we all are search for, far more than we want to acknowledge.

I’m more than happy to explain the approaches taken in the Work Mat methodology for Innovation’s overarching design, if interested.

The post Alignment is needed everywhere first appeared on Building Your Innovation & Ecosystem Intelligence.

Of course I am not suggesting this is all our business leaders but I would argue innovation and its ‘make up’ remains a mystery to nearly all our leaders.

They are more than willing to allocate responsibility down the organization, failing to recognize their pivotal role in managing or orchestrating innovation engagement themselves, or even ensuring the mechanisms are fully in place. Why is this?

Time and time again you read one report after another, about the leadership gap in innovation or issues relating to innovation disconnecting from the top of the organization.

You can read reports from Booz, Allen Hamilton, Boston Consulting, the Conference Board, Harvard Business Review, IBM, A T Kearney, A D Little and many others all reporting issues and gaps in connecting innovation at the top of our organizations.

Can they all be wrong, if not then why aren’t our CEO’s listening? Why are we not resolving this and only just keep reporting it?

In March of this year Capgemini Consulting and IESE issued their report called the “Innovation leadership study” and this went deeper than most into the problems.
The study revealed that “the absence of a well-articulated innovation strategy is by far the most important constraint for companies to reach their innovation targets.”

In the report they mentioned not just the lack of many formal mechanisms were missing but the total environment for innovation was missing this explicit innovation strategy. That is a serious failure at the top of organizations in my opinion. How can leaders expect innovation if they remain unclear of their role and function in facilitating and encouraging it?

Can this change?

A collaborative effort
Jeffrey Phillips of Ovo Innovation and myself have collaborated on a number of different innovation frameworks over the last twenty-four months or so.

These have been  to offer concepts or frameworks that we felt were missing or needed explaining. We have set about the offering up of possible solutions to reduce much of this ‘mystery’  that seems to still surround innovation.

As we shared and exchanged views, we have mutually recognized our personal frustrations on this continued leadership gap towards innovation.

This has been triggered even more by this Capgemini report and so we decided on a way forward as our ‘tipping point’ to set about studying this and seeing if we could find a solution to this innovation leadership issue.

Or at the very least, advance this recognition, beyond debates from this constant recognition of a problem, into offering an emerging framing on the ways to begin to resolve this.

A soft launch will happen offering our integrated innovation ‘framing’ as a solution.

We think we have now arrived at a further tipping point and will ‘soft’ launch the integrated innovation framework this coming weekend, starting Sunday 9^th September 2012.

We will build within a series of seven articles, one per day over a week, which we believe make up the component parts.

We will attempt to explain what we see as an integrated executive innovation framework that will be delivered through a work mat methodology approach. These articles will be published initially through www.innovationexcellence.com to gain an audience of innovators and then will be taken out further by our two respective organizations in further field work, validation and consultation.

I recently wrote a series of articles in August and one is perhaps worth reading again, this is “From a buzzword to the imperative.” In this I discuss this need for a framework and then go on and explore different components within a series of subsequent articles, that I felt needed leadership attention.

The present argument needs moving on and resolving

There is no argument surely that we need to break into this leadership gap around innovation? We need to offer suggestions towards their role, to address this lack of engagement or awareness?

We need to provide an organizing framework that achieves alignment into the organizations goals and provides the structure across innovation that can ‘cascade’ down and across an organization.

The end aim is that so all those involved within the organization, or closely associated with it, can relate too and ‘gather’ around an overarching framework, articulated and constructed from the top, that guides innovation.

We want to narrow this leadership gap and organization understanding so as to achieve a specific connection between leaders and their role in how they can facilitate and bridge this clear divide and present seen ‘impediment’ for innovation.

The leaders of organizations are no different from all the employees working within the company, they are all looking to secure a sustaining future and participate in a vibrant one that primarily comes from the innovation engine needed for all businesses and economic growth.

The contribution of the leaders within organizations falls mainly on defining their role, laying out its parts in a coherent way for all to relate too.

We believe this framework approach can be one of the primary organizing ways for that engagement and identification so much needed.

Tune in please and we certainly hope you can relate to what we are offering

We believe this integrated framework will require some real leadership engagement but we believe the outcome can offer four significant benefits:

1. The framework can create cohesion and consistency of innovation purpose that will reduce many existing barriers and uncertainties around innovation
2. As the leadership does become engaged this will demonstrate a significant commitment and promise that will certainly increases the visibility of innovation, lowers risks, encourages more involvement and generation of better ideas.
3. The framework itself will generate work flows that connect, become more dynamic to explore and promote the innovation skills, capabilities and competencies needed. They become more cohesive, coordinated and focused
4. As the framework connects, in its understanding and as its impact grows, we certainly believe confidence builds. Both formal and informal areas are addressed in parallel, growing all-round identification and alignment.

A challenging road to travel

To get to this tantalizing promise needs a lot of recognition, engagement, investment and commitment. You don’t suddenly arrive at enacting such a change without some ‘hard yards’ to cover and tough issues to resolve.

We are only at the starting point by offering this integrated innovation framework. We have confidence it will help, what we need is the right audience to listen and simply say “I get it.”

For the leaders, to hopefully see its organizing value and fit and their critical role to play in supporting innovation through this organizing and integrated framework so the organization initiates and delivers what is expected, better than today.

Do we see bumps on the way, of course, do we feel they can be navigated, again of course; otherwise you don’t start the journey. We are equipping ourselves for some demanding challenges.

We continue to invest in this framework as we see it does offer real potential

We feel this period of research, investment and consistently exchanging between us both has certainly increased in intensity over the last six months.

We have built a structure; a methodology and a guiding set of approaches that help facilitate and provide the CEO and his leadership team with a way to radically reduce that innovation leadership gap.

We can offer a clear ‘way forward’ for engagement and alignment that can help, perhaps radically, the organization to establish innovation firmly into the minds of the boardroom and their vital role to play within this real need for all to engage in.

We seek to bridge the innovation leadership gap
All I can do at this stage is ask you to please explore this series of articles, don’t rush to judge and dismiss, take the more explore and reflect, approach. We simply want you to have a similar identification and equally ‘I get it, maybe we need it’ at this stage.

We hopefully begin to bridge the innovation leadership gap and the role they need to play and we feel we offer a way to address the lack of innovation leadership that is clearly ‘out there missing’ in nearly all organizations.

In organizations this needs internal discussions to recognize this ‘gap’ and then gain the leaderships attention to how this can be addressed. The proposed integrated innovation framework might be the place to start and our arguments might be the catalyst.

We launch our “emerging thoughts” in this series of articles on the different innovation domains needed to be explored at the leadership level, this coming weekend 9^th September 2012, and each day, during that week.

We outline these through the frameworks different domains themselves. Do take a look and I hope you agree, we offer a way forward and are wanting to engage and deploy this framework to the leadership of innovation.

The post Leaders need to engage and drive innovation first appeared on Building Your Innovation & Ecosystem Intelligence.