How can we bring increasing agility into our innovation work, that requires both stable and dynamic moments to deliver better outcomes?

Where do we focus, what do we recognize as organization practices, that can begin to transform the organization and re-equip it for a different future?

Agility for me is vital, it allows us to increasingly be adaptive in an uncertain world.

As innovation continues to be central to growth far more in the future it is our ability to adapt and adjust to all the uncertainties and this requires the ability to be agile.

A report provided by McKinsey “How to create an agile organization” has been part of a broader ‘agile’ series from them but this one specifically gave me my necessary anchor point, to move forward with my own design thinking for agility and innovation.

McKinsey does point out in this report you do need all eighteen practices to be fully alert to agile, but it is these dynamic ones that hold the real promise in my mind. These are the ones we all should move towards as our projected aim to achieve.

So let me summarize these nine dynamic practices

I have taken the nine dynamic practices outline meaning from this McKinsey report and added my own thoughts and reflections within these summaries.

1. Information Transparency

Today we need to take away all the filtering going on in organizations. Those who fill positions to control and attempt to influence the data. If we can’t unlock the knowledge within the organization, we fail to connect the people working within the organization to its products and related customer needs. Transparency makes the sharing of the knowledge increasingly relevant to connecting up the ‘whole’. There needs to be a very powerful concept of un-filtering, to allow the flow of understanding. It is highly dynamic and powerful in all it can release if encouraged and supported.

2. Rapid iteration and experimentation

The whole emphasis today is on rapid and fast cycles of learning. That testing, learning and adjusting from mistakes and building on these become really valuable progress points. Prototyping is getting so much better, it is creeping into the everyday culture when we innovate, or should. The MVP concept is so right to get features that are potentially better, out there, to test and learn from.

3. Continuous Learning

The moment we stop personally learning, we are the real losers. We need to find ways to ”cut out time” to explore and look for new ways to learn to improve ourselves and what we do within organizations. We need to push for new ways of working and to learn ‘more freely’ from other’s knowledge, in open exchanges and ways to collaborate. We progress by learning from failures and relating to them.

4. Flexible resource allocation.

We need to be adaptive, fluid in any organization and team design. The ability to feel in a position to ‘ramp up or shut down’ initiatives empowers us. We need to want to constantly change teams, seek out joining new ventures. To be always wanting to be redeployed, not because we are hanging on but because any new deployment means new horizons and opportunities. Seek change out, embrace this flexible world and show you are a key resource to help mold and shape it.

5. Open physical and virtual environment.

I often struggle with open planned offices, they provide an environment that distracts and not promote. If you can achieve a way that people communicate and collaborate with each other then great but when you are in a globally dispersed organization it is how you openly ‘react’ in your daily work. For me the virtual environment holds the real future and with so many organizations denying social tools the key to make it ‘purposefully designed’ is to make the activities clearly visible to all that need to know, to constantly show where your intervention and impact has made a difference in building context, content, structure or sharing knowledge. We need to find much better ways to make this a really dynamic, exciting, and rewarding part of agility within organizations

6. Sensing and seizing opportunities.

The value of being proactive, to watch out for signals, to then act upon them, to make your insights valuable to change perceptions, to alter customer bias, to engage with the external environment to shape, influence and contribute into new initiatives makes ‘sensing and seizing’ so important to drive innovation as the catalyst of change.

7. Technology, systems, and tools.

The constant demands being placed on us, to learn and adapt to new technology, systems, and tools as it keeps changing is mega-hard to keep pace with. New organization design in architecture, infrastructure, practices, and ways is tough to integrate the old and the new. How we respond to these is highly dependent on the articulated needs of the business. We can only be ‘responsive’ if we relate to the changing needs. The ability to have a more modular architecture, updates coming in a shorter interval of times can help in a continued updating. It is when the process determines rigid design you can’t change. To ‘react and respond’ you need to keep looking at moving towards technology frontiers. Exploring and exploiting contributes to a better holistic desired business outcome.

8. Role mobility

The movement needs to be constant. When we design we need to always account for achieving a certain fluidity. We need to constantly match our present skills with organizational needs. As we develop a more open talent marketplace we need to have this increasing mobility. Communicating roles, tasks and project outlines need to be demanded, then we have the understanding to change and then deliver to these ‘askes’ of us. These need to constantly match with our own goals, the alignment is the enabler to make this happen.

9. Active partnerships and ecosystems.

Relationships are our trading value. As we build out networks we need to trade. We trade in knowledge, in contribution, in working alongside others to co-develop. We seek out partnering, to invest our intellectual capital with theirs. We look to build the organization’s ecosystem through these engagements, to contribute to new products, services and solutions to look to bring them always to fruition. Our ‘need’ for activity and engagement builds a thriving, more dynamic environment.

In summary.

If we can embrace change by seeking out ways to re-equip ourselves, we encourage our organization to become more dynamic by these actions. We do get stuck in a certain mindset and set of behaviors. We become beholden to them, they eventually ‘freeze’ our progress, we stop learning and experimenting. We need to push for formal mechanisms of change, we need to seek out our own. We need to take hold of our actions, be clear on our organization’s vision and how we believe we can contribute.

As individuals, as members of fluid teams and as an organization we need to be mutually reinforcing. For me, fluidity is equally the growing need of organization’s today.  It is in recognizing that the dynamic practices found for building agility into ourselves and the organization do lie in these nine practices, they give us this level of fluidity. Take them on board, practice them constantly and over time your agility becomes your transformation. It becomes the ‘norm’ and allows for constant adaption.

The post Achieving agility within your innovation work first appeared on Building Your Innovation & Ecosystem Intelligence.

Let me confess: I am not alone I am sure but I seem to be presently suffering from Social Media Return Dilemma. There I’ve said it, it is out in the open, “I suffer from SMRD”.

To be honest I am struggling with social media in innovation, struggling to get my head around it for my business, for me for a long time. It often seems overwhelming, do you feel the same? I worried about this years ago and still do. What is the best social media to have as part of your communicating strategy, how much time do you network?

It starts with a realization

I can see daily the amazing power that social networking can provide, it is certainly eating into my day, more and more. Is this a good thing or bad? What suffers, what benefits? The time issue has to increasingly be managed, and I have yet to come up with a repeatable plan to manage social media consistently each day into my work. I get so much from viewing, commenting, relating and learning.

I don’t have a clear enough strategy for it or where to direct my social media energy, does anyone? It continues to evolve in front of our eyes, are you cresting the social media wave or swimming like crazy to get back up on the surfing board?

I am still learning, experimenting, exploring through a combination of writing blogs, contributing to others, updating my connections, tweeting sometimes like crazy, publishing, promoting or simply clicking on a retweet or offer a “like” back to the author or the one that has publicized something that interests me. Often I do wonder all this frenetic energy leads to what end. It does nag away at me?

My daily bread is innovation

I focus 100% on innovation- I research, I advise, I coach, I mentor, I consult around it. I also write a fair amount about the subject. It is a little “all-consuming” and maybe social media is eating into this a little more than I can digest.

Not an uncommon dilemma

Presently I work as an independent but find this has its marketing difficulties so I need a greater exposure and through social media, I feel I can achieve this. It can lead to a clearer awareness of what I stand for and what I can offer and to date I can see solid progress in others responding, connections made, work undertaken on behalf of others. I want more, so I have to stay on this social media treadmill. The building does take time and time is a precious commodity, so I try to balance this accordingly. Is it “the chicken and/or the egg” so it becomes part of this social media return dilemma?

For me I certainly want to contribute to others, to provide back some of my experiences and significant knowledge gained in working across different aspects of innovation, as many people struggle with this daily. The one problem is I want to get paid for this and I keep wondering how social media can give me that monetary return?  At present, it seems more a constant outpouring and I have not figured out yet, the return for this. The more traditional channels to market still yield more but I think, no I believe, this is changing but it is early days. I’ve just got to figure out my SMRD model better to make this happen more.

The #influencer model- things are changing fast

Things are changing at last. There is a growing recognition that over time your thoughts, opinions, views build up a level of trust. Now, this is precious, as you really do need to guard this, hold onto it and keep improving it as best you can.. Achieving a “go to” trusted resource means you are entering the emerging #influencers domain. This #influencer phenomenon is presently hitting a fever pitch for consumer brand marketing and digital influencing. Perhaps innovation is following from where I see and partly where I seem to be heading, into the #influencers camp, in understanding this and re-orientating to what it requires. What do I need to put in and what do I want out of it- gigs and (close your eyes or look away, those of you that are sensitive to this) paid work for sure!

Connecting is one thing, engaging is another!

The opportunities are certainly endless to engage across the many innovation communities and social networks. To be honest it really is becoming a full-time job and I am simply ill-equipped to go there. I run a business, this must be only a part of the running, not the taking over.

I am trying to balance time, need and return.

I have certainly found offering a considered opinion on “all things innovation” as hard work. My time spent in research gathering and exploring, let alone reading all this collected wisdom is hard work. Yet in my view, to be recognized as an innovation expert, where I think my knowledge does reside, you do have to put in this hard graft and can be very satisfying.

I’m equally always in search to engage. By engaging in numerous conversations, in exchanges, asking/ answering questions and gathering value contribution back, needs a consistent synthesis of how to channel this back into my business in a more effective and productive manner. I’m told the opportunities are endless but are these leading to work? So far it is difficult to tell as my experimental strategy maybe is muddling the social media water, or is it all the combinations that keep me “bobbing along”. I often ask myself am I straying away from traditional models of consulting and client approach and is there one better than another?

Is anyone out there, really listening?

All I know is most clients seem to have given up listening completely. That is until they run into their own brick wall and then you see all the signs of panic and suddenly and urgently need to seek from others, finding answers to their problems. Often these are the new ‘burning platforms’, self-inflicted,  as many simply were not aware what was actually coming towards them, they ignored the warning signs, that building up of a head of steam, that then suddenly blew the cap off their innovation well.  Then it is “parachute time” for help to arrive and full-scale rescue. That familiar roar of the innovation fire engine coming to help douse the fire before it fully consumes those that waited for far too long, for it to happen.

Where do you go to generate awareness? We are told to form a social media strategy and execute it. Oh yeah, right! Is that on Facebook, YouTube, Instagram, Pinterest, LinkedIn, Twitter, Google +, Flickr, Tumblr and soooo many more. Anyone got some half-decent solutions to manage this without an army of helpers, human or robot? Of course as pointed out by @mirko_ross in reply to @akwyz, for super-nerds Medium, Slack, and Discord. We can go on.

What I really do enjoy about social media

Social media allows me to build real relationships with my potential innovation audience, to inform them instantly of new developments in my area of expertise, in my company, in my travels, in my thinking and more and more in my life. I really have got to know many others that are social #influencers or experts that you can turn too and get some reaction.

Social media is allowing me to bring a previously unseen human factor into these relationships and I like that. It does seem the person at the other end understands the #influencer brotherhood and more than often wants to respond, as they are actually looking for that same important value in their social/ business need of being seen as contributing?

The blurring in front of my eyes

Don’t you wonder who really has time to read the “stream” of tweets that just “blur” in front of my eyes? How do we sort out this stream and extract value? I really wish I had a few more magical tools for that.

Are people on the receiving end really connecting with what you say or recommend and more importantly listening to all this advice being offered? Are we forming deeper relationships from this or just fleeting ones? Am I still a click away from the recycle bin or buried in a flood of messages crushing my message by arriving later and on top of the page?

So I’m asking myself many open-ended questions, on the contribution and impact that social media is having on my business life. I learned many things, I’m moving towards a better social media strategy from all this questioning. Will it transform my business- well that is another open question?

What I’ve learned to keep remembering

1. Social media is not a ‘fad’; it has become deeply embedded in my daily life.
2. I’m needing to engage across multiple groups to contribute and to learn from others
3. I am getting a ‘pulse’ on innovation happening all around me, each day, that shapes my thinking and response.
4. So far I have been dealing with social media on my terms but struggling to extract the value I need to build this fully into my business. I need to go with a different “flow” and “letting go” as you can’t relate to everything but what does that mean?
5. Broadcasts don’t work, self-promotion is not welcome and there is emerging a clear accepted social behavior depending on the social media. I’ve avoided these pitfalls and pleased that I have, as so many others seem not to be as socially aware.
6. It takes a lot of time to build up a reputation, a feeling of being a trusted voice, going to bed each night you worry constantly over not losing that.

Where I’m still learning

1. I need to select and settle on the social media applications that can fully support my strategic development priorities of building a thriving innovation knowledge practice.
2. I certainly feel I need more professional guidance to this whole area to make more sense of it as they seem to be fragmenting even more and experimenting just for the sake of it is tougher for small organizations to do. I just still feel inadequate when I see others seemingly working this space seamlessly- or are they?
3. Getting recognition of the expertise and knowledge that resides ‘within’ my business is still hard to achieve through the tools and applications. Knowledge platforms that work like Google or even LinkedIn are not so aligned to knowledge depth or breadth, they seem aligned with clicks, views, and shares.
4. The time that this engaging in social exchange is taking out of my day needs to be capped. It really is a huge daily struggle.
5. These “online exchanges” are running 24 hours a day, 7 days a week, 365 days a year…even on holidays! You choose when you want to get involved yes, but is this just not leading us into an even bigger treadmill of never-ending activity?
6. The development of #influencing is valuable within my business mix, more than ever. Social media, my growing network are connecting me more than most other marketing channels into prospective clients.

What I still question to find the right answers to on four topical points:

1. That links are the Key to Success! It goes beyond that, it is to do with engagement, sustainable engagement and links are just not enough.
2. There are out there amazing building opportunities that wait. You can’t engage in social media half-heartily, it has to be full on!
3. Opening up new markets for your business will happen. Yes but I think over time, a time you have to put in to make this happen and it is often random, fickle and fleeting and must be the real struggle within the corporations at present, seeing a return on investment. Can we afford to just’ go with the flow’ on this?
4. Social media can provide instant market research abilities and feedback. The larger you are, the more demanding this will be. The more opinionated you are the more popular you seem to be but that has its downsides. The fickleness of crowds. The instant reaction may not reflect the long-term value.

So, I struggle on social media and its role in my chosen space of innovation. When you suffer from SMRD like I do,  they do tell me that part of the cure is to talk about your own troubles. A trouble shared……is a trouble tweeted!

The post So I keep asking myself “What is the role of social media in innovation?” first appeared on Building Your Innovation & Ecosystem Intelligence.

I was catching up with my often collaborator and sparring partner on “all things innovating” Jeffrey Phillips  recently, and within our conversation, some of our discussions sort of triggered a reflection back to some fundamental work we undertook some years back.

In revisiting it, I felt it does stand the test of time and does seem to make this “come around” seem true. Let me provide a quick introduction along with some brief explanations :

Innovation for me always needs common reference points

When you don’t have a common approach to something, in this case, the management of innovation, you can have considerable pockets of inefficiency and a high level of ineffectiveness to deal with. Your organizational energies become fragmented as you constantly deal with differences, gap issues & misunderstandings that result in much-hidden costs and ‘spent, unproductive’ capital.

You often find resources are not focusing on advancing innovation; they are often spent on fixing what you have. By not having a clear common approach that everyone understands you fail to establish a common language. By not adopting a common set of innovation reference points you can remain often unproductive, consistently re-adapting, re-working and plugging gaps that could be better invested in managing the many aspects of complexity you always find in a better thought-through innovation management structure, one that focuses on advancing your activity.

A belief that has not changed.

Jeffrey and I believed, even more so today, that the innovation space needs a common starting point – a collaborative reference model.  Certainly, many other large and successful industries have common standards – in technology for definitions and common software and platform building, or in common accounting protocols have significantly advanced business confidence, common understanding, and sharing. We are gathering around the protocols in Industry 4.0 presently to connect and link manufacturing in a more “globalized” world.

So we need to begin to build an Innovation Management Understanding

It is with these shared and transparent frameworks, clients can gain knowledge, have a growing confidence to make an investment and gain a clearer sense of direction. So why don’t we seem to achieve a common approach to innovation, not constantly adjusting and adapting to different ‘standards’ or approaches and feeling innovation just seems to be stuck in a random, ad-hoc approach, left in individual organizations to figure out?

What we all really want is to acquire a common, repeatable, scalable innovation structure that allows us to invest, manage distinctly different innovations on a consistent basis.

 Adopting a common innovation framework has numerous advantages

Clients in partnership with advisors can build from this basic common platform of understanding by the more effective use of applying people with the right skills and capabilities to focus and accelerate the job-on-hand: the need-to-deliver innovation consistently to final clients needs.

If consultants, advisors, and practitioners can demonstrate that their solutions are based on a common framework they set about the creation of their own unique differentiation, based on their unique skills and points of value-add, not hiding behind generalizations, easy to copy quick fixes, spend most of their time on the constant need to firefight and plug gaps, or sometimes add to the mystery that unclear aspects of innovation management or incomplete advice can generate. It degrades efforts in our view.

We constructed a four-layered innovation model building around 1) strategy, 2) different necessary innovation approaches, 3) people and culture and 4) processes and platforms.

Reviewing where we are and recognizing innovation can be approached very differently

Now before I go any further I want to spend a little more time on reviewing this past work, relating it to what we have learned in the recent times on innovation’s advancement and see if we can re-emphasize the depth of analysis and research we undertook and bring it back into our innovation world.

This is the next step in building the common understanding

This is recognizing there are different innovation types and they have unique approaches that can still be incorporated in a common process. Each has its own detailed map but the top-level type denominators are shown below.

As I said, on my recent re-visit it seems to stand a test of time and forms a fundamental bedrock of collaborative innovation in all its different dimensions and guises.

Then we have the Common Process suggested as the adopted process for managing innovation

This is where innovation management software needs to be ‘joined up’. We have two distinct offerings, those that provide software for the front end and those that approach the portfolio management process. These need integrating but as the best, in the class as an integrated robust software offering, one that is available in one software package, not as it is offered today, in one or the other being a stronger piece of software (FFE) and the other staying light (PLM) or the other way round. It needs connecting up in a comprehensive way. Some current software providers might claim this is being offered but I have yet to be convinced any have achieved this as yet. Let me be proved wrong!

Does what I am sharing here make sense to you?

I need another chat with Jeffrey to see if we can open this back up to the scrutiny it requires and, as always, different thinking to improve the approach any argument for a common innovation process requires from others.

We are not usurping the different standards being currently worked upon for any ISO or equivalent proposal. We are in the search for a practical and logical common practice for innovation and its management process.

The post What goes around, comes around, in Innovation first appeared on Building Your Innovation & Ecosystem Intelligence.

It is not just for innovation application, that can determine innovation activities. It has multiple values in any organization thinking and alignment.

The 3H informs the decisions to be taken, by recognizing their importance to the future and ‘frame’ resource allocation, identify current capability gaps to resolve.

It helps to enable the whole organization to “get onto the same page” and move towards that desired future.

This 3H thinking helps break down complex issues. Thinking in different horizons prompts you to go beyond the usual focus of fixing innovation just in the present it provides the connections of the present with the desired future. The 3H builds portfolio design, outline the steps to resolve in any complex challenge, it ‘informs’ strategy and builds the business case for taking a specific direction to that ‘desired future’.

If you want to read more on the three horizons then take some time out to explore the “insights and thinking” resource page shown under the ‘tabs’ above.

I recently applied the three horizons thinking to ‘frame’ a new innovation design

Using the 3H you have to have a ‘reasonable’ framing intent, those essential guidelines that can provide “the Wireframe“ (a concept taken from thinking about a UX backbone) for establishing the basic design and activity process. It forms the foundation to move forward with a ‘united’ purpose, it gives the essential backbone to your future thinking. This is a useful way to think about the initial 3H outcome. We capture those signals around us today that can point to a very different future.

So the thinking intent of searching for a new innovation design had some framing assumptions that can leverage where we are to move towards a new future

• In my view, we must go way beyond “open innovation” as we practice it today. There is a real need for a broader ecosystem approach that taps into a constellation of diverse and specialized players that all come together around a particular challenge, collaborating to deliver growing complex solutions that offer real growth value for the client.

I would argue this fits within a constellation of partners all working towards delivering innovation that is highly valuable, radical, disruptive and distinctive. A network of highly vested ecosystem partners all working towards a common goal on behalf of the organization that holds the principal intellectual property, as the founding partner.

I believe one option to seriously consider is you can project this forward as becoming an ecosystem arrangement with a multitude of agents participating in resolving complex challenges, sharing their individual knowledge. The ecosystem sets about pooling their collective expertise, working in a collaborative creative environment, built on a platform design, where the development and commercialization of the process are established, mutually understood on who shares or owns what and driven to a co-created proposition. The significant outcome being a collective approach to working on creating real value creation, one that delivers on the expertise and passion infused into this.

• We recognize today we need to be highly adaptive in what innovation applications, processes, tools, and frameworks can be used, or possibly “grabbed” then why not perhaps from the innovation cloud and ‘drawn down’  into the individually designed innovation process we believe we need. Applying transformative applications at speed requires the approach to rapid experimentation, frequent iteration, and close collaboration between those involved. Adapting agile management to empower a more dynamic collaborative environment, using all that is available to you, intelligently and appropriately.  Designing a process that looks capable of delivering the challenge or idea but can also be updated and adjusted, as we learn and go.
• We also know today that innovation management itself must become “fluid” in design, in adaptation so the right approach is to be constantly ‘adaptive’ and put together what is needed to tackle the challenge that needs resolution. A constant redesign to meet the circumstances seems to be a goal of what we achieve in any new innovation design.

So we have a series of questions to ask and explore based on this ‘premise’

• It will be how and where a business or entities of business come together and see where people, things, and knowledge understanding that is often fragmented and dispersed, can be combined, and where the mutual value is based on the unique combination and utilizing the different technologies available. This needs designing in unique ways, not in rigid processes and structures, expected to be repeated and only achieving incremental advancement. Each innovation challenge is unique and needs to be treated so.
• I think applying a digital mindset is clearly a transformational phenomenon across much of the existing business today. The unique combining of the cloud, big data, social streaming, the internet of things, mobility, the industrial internet, are all making this the time for new growth opportunities, exploited through this digital economy and require a radical overhaul of the design today, to realize the benefits. Where is innovation within this? Innovation needs to embrace digital fully.
• Can we find ways to be highly adaptable, agile and fluid in grabbing and taking the parts of the innovation system, and then constructing them into that design and process that works for that specific challenge? We build a process that relates to the problem at hand in its structure, offering the suggested process needed in frames, tools, process designs that you adapt to each challenge.

Becoming adaptive in organizations that are often highly rigid and standardized is so conflicting, so different, you must separate the two that many are arguing even stronger today than ever, offering a dual innovation process or organization design to exploit and explore.

• We recognize that Innovation today conflicts with much of our existing organizational designs. We need to separate it out and recognize it can be highly fluid and adaptive to extract the best, not to be constantly forced to be compromised by constraints within the system.
• We also know innovation involves a more abstract thinking, as we are increasingly focused on “engineering our business in new and different ways” and this becomes the new goal of providing a clear uniqueness, a real competitive edge that is purposefully designed in our innovation systems, to meet specific needs.

So there is this growing need to have a new cycle of innovative design.

So in my premise, I believe we need a really radical way forward on innovation, a highly adaptive solution, where all these solution parts are available on demand, constantly adjusting and adaptable to the situation you have to resolve.

Does this recognition of the growing importance of platforms and ecosystems, of designing with more of a digital “eye” be able to shape any future innovation design? What type of innovation intelligence platform can be built so multiple ecosystems can form around it? It needs to be one that is integrated and connected up; in tools, methodologies, frameworks, in solution providers and collaborative clients, all working on common problems with data intelligence, feeding into their decision-making process, evolving the discovery and the needs required through innovation, by what they are “intelligently” learning and exploring

There is a sequence to work through within the 3H thinking, shown here to help in this

So as my initial outputs in thinking I came through this 3H sequence (H1- H3- H2) in establishing my “wireframe”.

You might recall, the aim of understanding the 3H is to recognize differences between horizons; H1 is often seen as the prevailing or dominating system and what it needs to deal with for sustaining those parts that have value, validate the purpose or need a “refit” as the external environment changes over time. With H3 there is a need to build the desired future state, the ideal system we believe will transform and allow us to grow and then begin to explore the options of what and how we get there.

Often that future understanding is clearly present in the existing, as commonly referred too as “weak signals” or blind spots, these are often hidden amid the noise of delivering on today. We need to amplify these signals and harness the ones that have become emerging in practice that challenge our thinking. These help us to figure out what is changing.

H2 aims to draw out often the conflicting tensions and dilemmas between vision and reality and determine differences, distinctions to manage diverse views, that often can collide & diverge. H2 is the place you experiment, build and strengthen the existing (H1) but explore the concepts, prototypes, fill the missing gaps in your capabilities to move you towards H3, validating and adjusting in what you are learning as you go.  Hence why you work H1- H3- H2 as the sequence.

The absolute underscoring of this is to raise “future consciousness with a common awareness of the future potential within the present” It is to gain common identification and sense of purpose, both at an individual, team and organizational level.

Often within our ‘business as usual’ attitudes, there actually lie the seeds of destruction. Today there is a relentless pace; we are facing a relentless change occurring. Yet we actually subvert the future to prolong the life of the existing. We need to frame our innovation needs differently for exploring and exploiting innovation across different time horizons to move beyond the usual.

The underlying need in searching for a future ‘desired state’ in innovation design is we do need to recognize that Innovation is constantly facing disruption; it is constantly going through life cycles and new waves of different activities and business invention, we begin decay faster today than ever. We run increasing risk that we begin to lose any dominance or competitive position increasingly. We need to innovate, to evolve, to sustain ourselves and maintain our market positions in a rapidly evolving world. To cope with this accelerating world we need to ‘go digital’ in any innovation design.

Here are my opening thoughts framed in the three horizons thinking I undertook.

Horizon One – keeping the lights on, managing today but moving forward

We have to recognize that innovation will certainly not get any easier; it will be faster, more demanding and a heck of a lot more risky to design, create and execute.

Without a doubt, digital and physical do operate at really very different speeds. We need not only a new innovation management system, we need a modern engagement platform.

At the moment innovation is seriously lagging in its potential as we have failed to “connect it all up.” Yet it is not just a need to simply connect up, we have this need to redesign innovation from the bottom up in its design to ‘account’ for all the changes that have ‘advanced’ our understandings.

 We need to leverage technology in significant ways to automate the process and capitalize on the power of data, intelligence, and flexible design delivered in highly adaptive ways.

We know a lot about innovation and its needs – in culture, environment, treatment, processes, collaboration and aligning to customer needs and being integrated into any strategic intention of the business, going forward, to deliver the new growth ‘called for’.

Horizon Three – confirming future aspects and realities to move towards

I think we need to see a greater advance in multiple Business models, each will not stand alone, they will interlock in intelligent ways, to benefit from scale that becomes the essential need and greater appreciation of sharing services, jointly working towards common outcomes.

These strategic connections will open-up due to collaborating in different partnerships those opportunities for shared cost of new channel developments, building their part of the value propositions, driven through common back office services.

These will increasingly rely on platform management to manage these and partners within ecosystems to come together to achieve more complex solutions that advance customer experience.

The growing pressure will be demanded to find solutions that provide a cohesive and business-focused approach to the new social enterprise where we seek engagement at scale into multiple arrays of communities and advocates that has data and innovation as their operating core.

Horizon Two – the zone of conflict to resolve and work through.

As we recognize that the enterprise will need to move towards a design that is constantly evolving, adapting, adjusting and reacting. We need to design our systems to be highly agile. Systems that allow people to make their decisions based on the data they can access and predict a result.

This needs to be designed so it will be totally redistributed down to the person that is the interface so they can have decision authority, to seize breaking opportunities and achieving customer satisfaction far more quickly than in the past.

It will be how and where a business or entities of business come together and see where ‘people, things and their business offering’ can come together for mutual value based on the unique combination of the different technologies available.

We go and simply ‘grab them’ to fit the innovation we are working upon. We design the innovation system we need after we know what we are trying to achieve the challenge or idea. We “pull down” what is needed. Can we design a totally ‘adaptive’ innovation process to fit the specific need?

Moving from the present H1 into a world of Ecosystems and Platform collaborations, calling for a different innovation design.

There will be a constant evolving evaluation of the assets both internal and externally that make up this digital world (people, the business, and things) that will take this out beyond the control of one company, into a system within a larger system to make it works at a far constantly evolving speed, gaining adoption and appreciation of the value of being connected and collaborative.

We need to adapt our system thinking to the challenge identified, not the other way around, that of trying to fit them into a generically designed process. It should be each real challenge needs the innovation system design that is unique to fit the mission; highly adaptive, designed to the business need and the innovation discovery that helps fulfill the mission. It adjusts and you learn.

The dizzy array of strategic choices will totally disrupt existing business models if they are right in their design. We can scale a concept faster than ever, we can utilize others for resources, we can collaborate in highly agile, flexible and fluid ways. We are partnering more than ever, how can we accelerate that? How can we design innovation purposefully to work within this digital world, where (global) scope, scale, and speed are being demanded?

In summary

The whole world of communicating, transacting and designing all the different negotiations and products that meet the immediate needs of the customer makes this the “digital business era”, where constant redesigning and orchestrating the parts will keep it at the forefront by a constantly evolving set of combinations and leveraging a network of diverse capabilities.

All of this ‘calls for’ a radically new innovative design, built upon the digital age and the technologies available, as well as flexible enough to adapt into the future to provide a more dynamic innovation process, not one that today is very static in its present form. We need to make this case for change, as well as search for the mechanisms of that change.

The post Applying the Three Horizon Thinking to a Fresh Perspective of Innovation Design first appeared on Building Your Innovation & Ecosystem Intelligence.

The number of helpful reports, observations and suggestions are constant and becoming overwhelming to translate effectively.

How can we map a new pathway for shifting current practices and transform them?

Where do we focus, what do we recognize as organization practices that can begin to transform the organization and re-equip it for a different future?

After working through a number the one that held my attention and has become central to my thinking to take organizational practices forward was provided by a recent report from McKinsey “How to create an agile organization”. This report has been part of a broader ‘agile’ series from them but this one specifically gave me my necessary anchor point, to move forward with my own design thinking for agility and innovation.

Agility for me is vital, it allows us to increasingly be adaptive in an uncertain world.

As innovation continues to be central to growth far more in the future it is our ability to adapt and adjust to all the uncertainties and this requires the ability to be agile.

I want to separate agile from the software push side, empowering small teams, into this agility for organizations. We all need to learn or hone new skills, be this sense-making, novel, and adaptive thinking, developing deeper social intelligence and managing new media literacy. How we do this will be one of the keys to making progress or sinking due to a growing cognitive overload.

I recall one report suggesting the work environment needs to be redesigned with three goals in mind, so we can tackle increasingly higher-impact challenges, strengthen those higher-impact connections to deliver on these challenges and thirdly, be in the right shape to amplify the impact.

These three suggestions came from the Center for the Edge. I liked these as they fit my innovation mindset and focus and continues to extend my own views, such as these two posts of “Making Agility compatible for you” and “Building Collective Agility for Innovation”

So, let me return to the McKinsey report, it builds out “agility” even further.

They have identified eighteen practices for organizational agility. Have you noticed how many organizations are emphasizing agility in their transformation, yet McKinsey have suggested nine of these practices are more for stability and can give the foundations for the shaping the other nine, those they nominate as dynamic.

Stable and Dynamic Practices of Agility.

A brief summary but I would recommend reading their report

Now within the list of stable practices, I think most organizations are falling into the trap and placing their emphasis on building these. Is this focus wrong? Yes, but it is largely where you are in nay transformation journey. There seem very few organizations have completed any form of agile transformation, they are for many a current work-in-progress.  It is the scope and ambition of organizations real determination to transform, their higher aspiration, that will determine how far along an agile pathway they can go. The stable group reflects significant progress on where most of our organizations find themselves today.

The ability to transform, moderates the ‘higher aspirations’ and my feeling is, unless you aim for the dynamic agility practices from day one, you will not make sufficient progress in delivering agility into the organization. This is why I just want to focus on these more dynamic ones, as they really begin to make a radical difference, one that can separate one organization from another.

McKinsey does point out you do need all eighteen to be fully in practice, but it is these dynamic ones that hold the real promise in my mind. These are the ones we all should move towards as our projected aim to achieve.

So let me summarize these nine dynamic practices

I have taken the nine dynamic practices outline meaning from this McKinsey report and added my own thoughts and reflections within these summaries.

1. Information Transparency

Today we need to take away all the filtering going on in organizations. Those who fill positions to control and attempt to influence the data. If we can’t unlock the knowledge within the organization, we fail to connect the people working within the organization to its products and related customer needs. Transparency makes the sharing of the knowledge increasingly relevant to connecting up the ‘whole’. There needs to be a very powerful concept of un-filtering, to allow the flow of understanding. It is highly dynamic and powerful in all it can release if encouraged and supported.

2. Rapid iteration and experimentation

The whole emphasis today is on rapid and fast cycles of learning. That testing, learning and adjusting from mistakes and building on these become really valuable progress points. Prototyping is getting so much better, it is creeping into the everyday culture when we innovate, or should. The MVP concept is so right to get features that are potentially better, out there, to test and learn from.

3. Continuous Learning

The moment we stop personally learning, we are the real losers. We need to find ways to ”cut out time” to explore and look for new ways to learn to improve ourselves and what we do within organizations. We need to push for new ways of working and to learn ‘more freely’ from other’s knowledge, in open exchanges and ways to collaborate. We progress by learning from failures and relating to them.

4. Flexible resource allocation.

We need to be adaptive, fluid in any organization and team design. The ability to feel in a position to ‘ramp up or shut down’ initiatives empowers us. We need to want to constantly change teams, seek out joining new ventures. To be always wanting to be redeployed, not because we are hanging on but because any new deployment means new horizons and opportunities. Seek change out, embrace this flexible world and show you are a key resource to help mold and shape it.

5. Open physical and virtual environment.

I often struggle with open planned offices, they provide an environment that distracts and not promote. If you can achieve a way that people communicate and collaborate with each other then great but when you are in a globally dispersed organization it is how you openly ‘react’ in your daily work. For me the virtual environment holds the real future and with so many organizations denying social tools the key to make it ‘purposefully designed’ is to make the activities clearly visible to all that need to know, to constantly show where your intervention and impact has made a difference in building context, content, structure or sharing knowledge. We need to find much better ways to make this a really dynamic, exciting, and rewarding part of agility within organizations

6. Sensing and seizing opportunities.

The value of being proactive, to watch out for signals, to then act upon them, to make your insights valuable to change perceptions, to alter customer bias, to engage with the external environment to shape, influence and contribute into new initiatives makes ‘sensing and seizing’ so important to drive innovation as the catalyst of change.

7. Technology, systems, and tools.

The constant demands being placed on us, to learn and adapt to new technology, systems, and tools as it keeps changing is mega-hard to keep pace with. New organization design in architecture, infrastructure, practices, and ways is tough to integrate the old and the new. How we respond to these is highly dependent on the articulated needs of the business. We can only be ‘responsive’ if we relate to the changing needs. The ability to have a more modular architecture, updates coming in a shorter interval of times can help in a continued updating. It is when the process determines rigid design you can’t change. To ‘react and respond’ you need to keep looking at moving towards technology frontiers. Exploring and exploiting contributes to a better holistic desired business outcome.

8. Role mobility

The movement needs to be constant. When we design we need to always account for achieving a certain fluidity. We need to constantly match our present skills with organizational needs. As we develop a more open talent marketplace we need to have this increasing mobility. Communicating roles, tasks and project outlines need to be demanded, then we have the understanding to change and then deliver to these ‘askes’ of us. These need to constantly match with our own goals, the alignment is the enabler to make this happen.

9. Active partnerships and ecosystems.

Relationships are our trading value. As we build out networks we need to trade. We trade in knowledge, in contribution, in working alongside others to co-develop. We seek out partnering, to invest our intellectual capital with theirs. We look to build the organization’s ecosystem through these engagements, to contribute to new products, services and solutions to look to bring them always to fruition. Our ‘need’ for activity and engagement builds a thriving, more dynamic environment.

In summary.

If we can embrace change by seeking out ways to re-equip ourselves, we encourage our organization to become more dynamic by these actions. We do get stuck in a certain mindset and set of behaviors. We become beholden to them, they eventually ‘freeze’ our progress, we stop learning and experimenting. We need to push for formal mechanisms of change, we need to seek out our own. We need to take hold of our actions, be clear on our organization’s vision and how we believe we can contribute.

As individuals, as members of fluid teams and as an organization we need to be mutually reinforcing.For me, fluidity is equally the growing need of organization’s today.  It is in recognizing that the dynamic practices found for building agility into ourselves and the organization do lie in these nine practices, they give us this level of fluidity. Take them on board, practice them constantly and over time your agility becomes your transformation. It becomes the ‘norm’ and allows for constant adaption.

The post The Dynamics within Agility. first appeared on Building Your Innovation & Ecosystem Intelligence.

It is then by utilizing robust research and development projects, combined with an acquisition strategy that augments growth, management creates sustainable and evolving business model.

These are the hallmarks of effective leadership. through managing your future development, mostly through research and development, that when combined with a sound acquisition strategy, that you believe will augment your present internal growth, so as to look to sustain the business, longer-term, becomes your contribution as a leader.  These are the bedrock of good corporate management. It seems within GE, all of these have been forgotten or collapsed. Why, I mean how can that have happened?

For a company reputed to have a good management discipline and focus, yet this year, 2017, for GE, it seems all of these are lying in tatters, or some parts will lose out as a consequence, into the future. What has gone wrong at GE?

The last few months have been some of the most shocking ones in GE’s history. GE has been around since 1892 and was one of the corporate titans of the 20^th Century. Since the crisis of 2008, GE has been struggling to fully regain its position but all its actions were regarded very highly as “making good progress” as it maintained a relentless momentum of shedding and acquiring operations, as well as pursuing a buying back of its shares, and paying out the beloved GE dividend. This certainly provided a highly dynamic environment for managing the business. There has been a consistent muttering that this was not fast enough or clear enough. Well, GE faces a very different set of realities today.

Today, GE is in a very dark place at this moment. It is managing a full-blown set of crisis, that has investors highly spooked and demanding answers. Its share price is hovering around $17 per share, whereas, in February of this year, it was ranging in the $31- 32 price. Its market valuation, once over $400bn, is now closer to $150bn.

This is a long read, as the story itself is only just emerging and is a complex one. I simply have to step outside my own innovation comfort box to try to get to grips with the breaking GE story. It has shaken me.  I assume you already have some awareness of what is happening in a company that has been held up over so many years, as a model of good management.

So let’s jump in and try to find some answers to the GE story unfolding in front of our eyes, it is one that has more to come and a finish that is less than clear. Is it too big to fail? A Kodak moment? Will GE eventually break up? Or is this a set of crisis overhyped and those attempting to manage the complexity of this turnaround will simply put it back in good order in the next eighteen months. I just wonder if it does hold more ‘spin’ yet to be discovered?

Whatever, it is a big story happening in front of our eyes and it is generating more coverage by investors than you can possibly read. So here’s my take on it, so far:

Past transformation activities were not enough within GE, the cash has been running out!

Jeff Immelt who ran GE for the past 16 years, attempted to radically transform the business, he really did. GE was beyond the classic conglomerate, it had such a massive financial arm, GE Capital that at one point in that financial crisis of ’08 it had been determined as “systematically to be deemed as an important financial institution to be allowed not to fail”. In preceding years, Immelt stripped away as much of the tangled web of GE Capital to refocus the business on its core industrial business. GE Capital is certainly a tangled web and still might become central to any further crisis.

Yet GE stayed locked into the classic conglomerate structure, where Immelt chose the shaping of this by taking the high road of acquisition and spending, to be his attempt to reshape the business. In Immelt’s view, he was achieving a strategic transformation, yet it seemed he also relied far too much, in recent years, on the significant ramping up of the digital arm, now Digital GE, that equally required lots of cash. GE made a $4 billion bet on connecting industrial equipment via the Internet of Things (IoT) and analytical software with a suite of products called the “Predix Cloud”. This has a significant place in the future but it was not able to alter the conditions that radically changed in the marketplace GE are facing today.

The complexity of the GE transformation is unique and unfinished

This complexity of transformation, when you operate within any heavy industrial asset world, is a significant challenge, especially today when technology is fast displacing dated business models, technologies and ways of work at an ever-increasing pace. A world where others, far more nimble and agile, are able to respond as they are more laser-focused.

Yesterday’s models of the world, especially the conglomerate, has to be equal to the same task of responding to the short-term nature of our stock exchanges and increased returns. Our stock exchanges are still not recognizing the value or rewarding innovation in a time when companies need to be innovative more than ever. There is such misalignment in time for innovation to emerge. This impatience goes far beyond companies and investors, it is hurting the economy and society as a whole as well.  Each company, big or small needs to be nimble, agile and highly focused, on what will return a market premium, or the investor drives your business down even more. GE has been caught in this for some time. Time is not on your side in this world of immediate return. I wonder if GE will follow its rival, Siemens in moving towards more of a holding structure of separate entities?

With all Immelt’s selling off of those slower-growth, lower-tech, and non-industrial businesses, over the years, he just simply stayed with too much of the core business model as central, being managed centrally. He was ignoring the shifts taking place within the marketplace,  or perhaps he had the feeling he could shape them accordingly, simply by GE’s actions and rhetoric. More of his businesses were far more vulnerable than he realized to the changes taking place in these markets.

Even though he doubled the GE investment in R&D progressively, the innovations emerging from the businesses were not transformational enough to counterbalance all the negative positions developing in market shifts, although it produced some significant breakthroughs and advances on what went before.

A slowing growth, a rapid shifting of market sentiment, from fossil fuel to renewables, also went faster than expected. Other more focused companies were re-working their core business models where digital played a part. In retrospect it seemed in GE, it increasingly became the only growth game, in his view, besides acquisitions to bolt on to existing industrial business areas. Digital became overwhelming in management attention, to find and sell digital solutions.

Then came 2017 and the roof caved in on GE

Immelt kept faith on the existing core industrial business, he even recently decided to double down on the fossil fuel industry and you can question seriously was he ignoring the realities of where the sentiment in the market was going. He had a greater belief this was a time to consolidate within core businesses reliant on fossil fuel.

Until this year, a constant stream of GE buying back its own shares, paying out a good, solid and reliable dividends and profit returns has kept the investment market from deeper questioning. Coupled with a consistent upbeat stream of management views has projected GE as a well-run and highly effective, highly optimistic organization. There was a growing denial set in by all that steady reassuring news. Well not anymore, GE recently in its 3^rd quarter review revealed its chronic cash position. In reality, its free cash flow can’t pay its obligations. Its recent acquisitions were not achieving the synergies expected and especially GE power was in deep trouble. Could this have been foreseen?

In 2012 GE free cash flow (FCF) was $16.2bn, in 2015 this was down to $12.6bn, then in 2016, this started to drop significantly with it really “hitting the rocks” in 2017, with some suggesting a negative of  $3bn predicted for this year, although the urgent action currently was undertaken, might pull this back into positive territory, partly due to the dividend being cut in half, allows for this saving to flow through. Some in the markets still view the latest GE predictions with caution, as too optimistic.  In late January 2018, they will be announcing their 4th quarter and end year results, to confirm the full 2017 performance and that will determine, much of the future, and determine even more immediate action.  Presently the GE position is that they will claw back too  $6- 7bn (FCF) in 2018, although many in the market are predicting this might be tough as well. Suddenly they have had to be faced with a cash-starved reality.

So the cash to fund the bets, fund the dividend, keep paying into a pension scheme, keep pushing the digital solution began to unravel, as the main business units generating the cash, built on fossil sources, dropped through the floor. Oil, gas, and power that GE had put ongoing bets on, have become significant cash consumers at unhealthy rates. The other parts of GE, especially healthcare and aviation could not bail them out.

Obligations mounted. Dividend cuts (50% ) have caused significant anguish for the longer-term smaller investor who was partly reliant on that consistent dividend pay-out. The dividend policy is still up for potentially more cutting, the share buyback is highly questionable (if you have no spare cash) and any M&A program suddenly becomes shrunken dramatically, down to small tweaks. Ouch!

Immelt retired and his vice chairs headed also for the exit door

Immelt made a series of expensive big bets that especially investors did not share as winners. The synergies were hard to extract on his promises. So in mid-2017, the writing was on the wall, Immelt needed to go. He resigned or was retired in June 2017 as CEO and it seemed quickly departed as handover Chairman, once the 3rd quarter results come out.

GE was heading for a full-blown crisis and the new CEO, John Flannery, quickly became also the Chairman and undertake a massive review “across the board”. Three vice chairs in Beth Comstock, Jeffrey Bernstein, and John Rice also decided the time was right. In Flannery’s opening discussion with investors, he outlined a dismantling of the legacy of his predecessor as he began with his comment “we need to make some major changes with urgency and depth of purpose”

So what has caused this radical shift to turn GE into a full-blown crisis?

Running out of cash, bad investments in recent big acquisitions, paying out of a dividend that GE’e earning could not sustain and the collapse of its GE Power division and coupled with the continued lackluster of the oil and gas business, transportation, and its lightening business has become the crisis. The business model was broken and was in a real urgent need to be fixed, markets were not performing and GE was becoming even more complex with the layering on of digital to every business, to shift the focus from product and service into product + service + digital.

GE had gone for a doubling down on fossil fuels when the world wanted solar, wind and all other renewable sources of energy, as well as the global customers seemingly determined to keep extending the life of the existing asset and not invest in the new, however much, GE tried, in its selling.

GE was attempting to unwind a very complex beast. It goes back actually a long way. Even in Jack Welch’s time but in the tenure of Jeff Immelt the GE stock fell by about half. Its stock is trading well below where it was 20 years ago. In 2017, so far, GE is the worst performing stock on the Dow Jones Industrial average. The trouble was GE was unable to make a complete strategic transformation, it got caught up in supporting its old business model, just by adding new digital clothes.

Renewable energy versus fossil fuel- a reality check

As solar and wind power costs have plunged, this has been challenging the traditional model of the industry. Mr. Immelt decided to bet the other way by investing in  2015 on Buying the power business of Alstrom for $10bn, a company specifically strong in coal plant designs.

Then he went and paid $7.4bn to merge with Baker Hughes that has an oilfield and gas manufacturing and services business, that has been in seriously difficult market conditions for a long time. This created a merged company where GE retains 62.5% stake. I have heard that In the past the attitude between GE and Baker Hughes in the marketplace was antagonistic to each other. Not ideal for a friendly merger and already the profits of that business for the first nine months of 2017 were down 41%, excluding restructuring costs. The synergies were not materializing in downturn situations.

The Gas turbine market, a significant part of the GE power division, for example, has fallen through the floor, along with the usually highly lucrative improving gas-fired plants has dropped away as the shift to alternative sources of energy continued. GE is not alone on this rapid decline and bad forecasting, Siemens, the other titan founded also in the 19^th century, Siemens in 1847, GE in 1892, has been equally scrabbling to drive down costs dramatically in their power and gas divisions. It does seem Siemens has been well ahead in spotting this trend, warning of the risks within the hydrocarbons- based power, a lot earlier.

Both Siemens and GE are having to deal with some rapid adjustments and downsizing. Inventory needs to be run down so the demand/supply is rightsized and any healthy return to positive financial results for GE might not show through until 2019 at the earliest, most even are predicting 2020, draining GE of much of its management attention.

There is going to be a very painful adjustment in their GE Power, as well as their Baker Hughes division, and related GE Energy Connections business, in adjusting to the present and near-term realities of today’s markets, one of the reduced demands for power and oil solutions. Is this cyclical or permanent? In GE’s case, they will be hoping for some shift in really tough market conditions, presently facing them as they have been placing really big bets in recent investments that fossil fuel will still be needed to satisfy the world’s power needs.

GE divested their Water business a while back due to concerns that the deal would not be approved by the US government. Not only was the Water business highly profitable, but it was a segment that would almost certainly have led to large profits in the future. Selling the water business was, in retrospect perhaps a poor business decision for pivoting away from being reliant on fossil fuel.

The confluence of issues came into reality also in 2017 for GE- a lack of cash finally hit home!

With the power division in so much trouble, on its own, it might be contained but GE’s troubles don’t just end there. The opaqueness of how GE managed its conglomerate has been a source of worry for investors over the years. Until this year a constant stream of buying back its own shares, paying out a good, solid and reliable dividend has quietened the market, along with a consistent upbeat stream of management views. There was a growing denial set in. Not anymore, GE recently in its 3^rd quarter review revealed its chronic cash position. In reality, its free cash flow can’t pay its obligations. Suddenly as I stated earlier, they have had to face up to a cash-starved reality.

Also, the pension fund has been grossly underfunded for some time, where some regard a fair value of the GE Pension fund to be $63b, benefit obligations of $94b and GE’s pension shortfall of $31b, the largest underfunded pension plan in the US. GE has been forced to borrow in new debt $6b to pre-fund some of its immediate obligations in 2018 to 2020. This becomes a real red flag as these obligations only continue to build and will constantly drag down share price for the dividend or shareholder return with this level of obligation. According to one analyst, this obligation of $31b equates to $3.50 each share.  So GE is shifting more to debt but needs to address this pension obligation, in the future.

Finding cash to fund obligations makes for a very uncomfortable position. To have its major business, Power, caught in a severe, possibly consistent declining market, reliant on fossil fuels, makes for a double whammy.

The pressure to save money; to delay payments, to renegotiate supply conditions, to reduce expenditure, all need a high sense of operating awareness, sensitivity and observation of possible consequences, as each changing action has its negative impacts when you are managing to extract cash or delay your spend or payment.

Yet the worries continued unabated.

Until the management of GE resolves the opaqueness that many still feel is surrounding GE. There will always be a feeling by many investors, that “they are spinning a good story,” something laid at the previous managements door of over hype and promise, under delivery. Here Mr.Flannery has been far more open, signaling the problems he is finding

The real opaqueness lies in GE Capital, it needs to become transparent.

There is a growing view that GE has billions of dollars of obligations from reinsurance agreements with other insurers. Each time GE was caught in a bid for contracts on any significant scale, GE Capital took on a portion of the carriers responsibilities of paying and helped in having access to more favourable rates of borrowing, due to its near- bank status (recall the designation some years back of “systematically important financial institution to big to allow to fail”.

Thankfully there is a set of actuaries examining GE’s long-term care reserves, many in the market believe these might be deficient. If there are any skeletons found here then GE would be very much down on its knees. No spare cash, struggling major portions of its business and a lack of growth in many markets is a very uncomfortable position to be in.

So why do I say that the enemy is already within?

Firstly we have the very real shift in the investors in GE. The secured dividend kept its stock as a large retail one, made up of pensioners, portfolio funds and individuals looking to have this guaranteed dividend come to them. There is growing fear the dividend might have to be cut again, or deferred in the possible near future. That takes GE out of one set of shareholders that held their shares due to the dividend, these shareholders made up a healthy part of the long-term investor. GE still sees its dividend as part of a new “balanced capital allocation mix” of R&D, CAPEX, the dividend and the company’s underfunded pension fund.  I wonder. This is ever more reliant on free cash flow.

The other investor, the large institutions, more looking for short-term gain, are always looking for rising share prices, attractive assets, good management providing strong returns. They are critical, fickle and demanding. At this moment, we are on the downside of many of these “needs” they expect by holding GE shares.

The type of investor attracted to GE is changing even more. In 2015 Trian Partners, known as activist investors, brought $2.5bn of GE stock, which was about 1.5% of the company. They campaigned immediately on how GE was undervalued and believed Immelt and his management team would not do the necessary things to deliver both a higher stock price and dividend.

“Activist investors” are regarded as the modern day “corporate raiders” of the 20^th century. They are part of a group of investors searching to unlock hidden value and increase shareholder value and have collectively, at their disposal, enormous assets of $120b or more, looking to invest in where they see opportunity. Their goal is clearly to increase their assets full stop.

They set about getting the management of the company to change strategy, they seek seats on their board, organize proxies and draw on the broader sentiment of the investor market to their side of the argument to maximise their position.

Trian Partners has recently achieved a seat on the GE board. They will be a part of a revamped board, that will shrink from 18 to 12, and three of these will be new directors. Recently the board might have been sleeping at the wheel, not seeing the problems as starkly as they have been painted in recent months. One can ask the question: why did they fail in their oversight and fiduciary duties? No wonder many are bailing out.

When you have more “activist investors “they often seek removal of the present company management or demand changes that are a radical shake-up as part of their belief of unlocking value.

The value of such an activist is he does prod a management into a more radical transformation, something GE should have achieved within themselves. It forces a very hard internal look at itself, one that is now being undertaken. The board itself wakes up and becomes the activist. The top management is put on notice.

 It remains within, that the problems still lie and all is clearly still to do.

GE, through its new Chairman & CEO, John Flannery has been responding. He undertook a 100-day review of the business he has taken over and presented his opening view in late November. The reaction has been muted as the market and investing community was expecting far more but there is a growing opinion of greater transparency than in the past.

The present portfolio is in need of a reset with a new guiding set of GE principles. The lighting business they have badly failed to refresh, transportation is in need for some radical rework and change in its market conditions before it shows growth. Both are likely to be sold, without some major redesign. The mergers they have made, have badly failed in generating the synergies or returns expected.

The renewable energy division is in a less than dominating market positions, something GE always prided itself on achieving, in “we must be No. 1 or No. 2 in market share” and their Digital and Additive business divisions are disruptors of ‘future’ promise but not yet of the substance to offset and absorb some of the other internal problems coming from declining profits and market conditions.

The two stars in the GE stable, are Aviation and Healthcare but these are in danger of being “swept up” in the same house cleaning need of greater rigor and fiscal tightness, to extract the essential cash needed for the group to fully function.

GE is restating what makes a GE business.

Its financial, operational and strategic characteristics need to be robust. There are presently far too many businesses caught out that need to prove themselves.

Mr. Flannery has promised to exit $20b of assets over the next 1 to 2 years, these will include transportation, industrial solutions, current and lighting and a host of 10 plus other transactions. This $20b promise is around 5% of the $365b on the books last year, that does not seem much does it? Selling off assets can also add to your problems as competitors “sniff” bargains and push down prices and markets don’t reward those that “blink first”.

His top team going forward is made up of 40% in new positions. The concern is they are all internally appointments and you worry that the same myopic view of the business might still prevail. Flannery said he would change GE’s culture to hold managers more accountable, demand better performance from the businesses and reduce the complexity of GE’s portfolio.

Why have so many “bright” executives (150 top executives) on the inside, why did they not spot some of this “storm”? With much of the same management caught up in this over last few years, coming through to replace some of the past ones they had been working for, are we honestly going to get the necessary challenging and fresh perspectives that Flannery suggests? Questionable.

Flannery promises to radically change the compensation plan for his top 5,000 employees with a higher equity mix and move from 20% to 50% of their compensation. This movement away from cash, into equity, aligns the top managements fortune to the shareholder’s expectations of share price and performance. They are at least working the same oars if the boat is to make headway.

The culture is expected to change.

Will it go back to the days of Jack Welch of stack-ranking, firing the bottom 10%, that would be a disaster. GE has never shed this Machiavellian culture in all the years of Immelt, as much as he felt he had tried it never trickled down through the management levels in a way that GE so needed to transform their culture.

As GE go through significant cost-cutting, reducing investments, research and development will we see a choking off of innovation? I fear so. What happens if the research and development dollar is radically cut or the talent within this area, senses threat and pressure. What does this do to the creative working environment?

As Mr. Flannery attempts to instill his planned “Accountability, Transparency, Rigor and Consistency” and his call for “getting back to basics” we will see a very different GE emerge. They are targeting $2 to $3b in cost-cutting. That is nothing on what it will have to be before the rescue is achieved. Already moves are currently underway to eliminate 1,500 jobs from the Head Office, and a suggested 4,500 from the European organization in the GE Power business. So many, many more to come, cutting into both professional and production staff. Maybe 15 to 20,000 in the months ahead. Will we see operation plants equally shut down with GE Power soon?

Job-cutting sends such a ‘chill’ message throughout the organization for a “flight or fight” reaction. The talent they have attracted might simply ‘melt’ away if they deem the culture goes back to the old GE type. This needs a light hand, not a heavy bringing down of the ax.

Are we about to enter “the death by a thousand cuts period” as internal managers view bold action differently, not experienced in a managing out of the normal,  and fail to really respond to the multiple crises on hand that point increasingly to radical surgery? I fear we might.

Remember that “the enemy lies within” when you have to make a dramatic turnaround involving 280,000+ employees, spread out in a global business, that have been fed a very different message on their ‘dominating’ position. I feel they are more than likely about to learn what “agile and lean” might mean in the new GE way, and let’s see how they ‘react’ and how it is managed, will determine real, lasting change, or simply, reluctant acquiescence, waiting for further management evolution.

It is all very much to do, and GE has little “wiggle” room it seems

 There is an enormous set of “What if’s” in GE, over the coming months. Nothing is certain, ever thing is uncertain, everything is to still do. The jury is out but many will want a guilty verdict if fresh evidence of change is not forthcoming. New evidence of problems will make it even harder. Everything has come into play.  What is being undertaken is one of the most complex, difficult turnarounds in modern business.

Lacking any proven turn around executives that will find this unrelenting in its pressures for the next 18 to 24 months. Execution has never been the strongest at GE, they have bounced from idea to idea, layering on their version of change before it has filtered down to the rank and file. This time it has to be very different.

A turnaround needs to be a strategic transformational one

A culture of turnaround need is as demanding as anything that comes towards you as a manager. It is life changing as it seems in GE’s case, it is life-threatening.  Jeff Immelt in his farewell view of “How I remade GE” commented: “I led through recessions, bubbles, and geopolitical risk. I saw at least three “black swan” events. New competitors emerged, business models changed, and we ushered in an entirely new way to invest. But we didn’t just persevere; we transformed the company. GE is well positioned to win in the future”

What he never stopped to question as deeply as he should have done, was the enemy within, those that resist change, those that chose to interpret it in their way. He should have appointed a Vice Chair of Change, who drove the change he wanted, in transforming GE, all the way through the GE organization. He had within himself this “Be All In” or “Game On” or “Let’s Go” with an enormous sense of competitiveness but he felt it was his to do, perhaps ego got in the way, so for others to follow it never was “full on” or that deep organizational commitment I felt.

In that remarkably ill-timed departure article over at HBR of “How I remade GE” his final words tell a story of promise yet to come:

“It will take years for GE to fully reap the benefits of the transformations. But as I contemplate my departure, I love where the company is positioned. I love what we’re targeting. The company in 2001 was certain that the future would look like the past. The company in 2017 is ready for any future. I’m confident that I’m handing over a company that will flourish in the 21st century. Some people at GE feel that the stock market doesn’t fully appreciate what we’ve accomplished. But I look at it this way: Our task now is just to perform, to execute, and let the market make its own judgment”.

Judgment time is here, the clock is ticking down. To flourish in the 21st century the new management tasked with this turnaround, really will need to challenge everything as the market and GE investors are certainly not in a friendly mood.

Self-belief or Delusional- we are still facing the volatile time

Immelt held a view that what people were calling GE, the 125-year-old start-up was his achievement, well that was a little delusional. They were and are slowly transforming into a digital industrial company that is defining the future of the internet of things but is it changing the very nature of the product businesses that GE are in? Nice vision, only part way there. and certainly, his claim “Change is in our DNA” was perhaps only skin deep. No one doubted his self-belief.  He made the opening comment in that (farewell) article for HBR: “remaking a historic and iconic company during an extremely volatile time” seems to be exactly where we are today. The difference is that this is of GE’s own making, this time they can’t blame others, it is theirs alone to turnaround.

Turning the page with difficulty, whats next?

As we turn the page with some difficulty, I’m optimistic at the strength that lies within the cores of GE; in its people, in its research, innovation, and real resolve to forge ahead. I’m certainly pessimistic at present, I worry that there is not going to be more “bad news” discovery when Flannery not just opens up the cupboards but starts working through the piles of issues he will find that need to be unraveled and reshaped.

Will it get even uglier, not just for investors but for the employees, for the customers to worry over? Well Yes, is my feeling, in all that I have read as it gets vicious as you spiral down, with less and fewer options. Everything seems to diminish. If GE starts pairing back R&D, they will begin to see their talent leave and their renown innovation spirit dry up.

It is far from that all doom and gloom, GE has incredible products and dedicated talented employees

I want to come back and focus on GE and its incredible potential in another post soon. At present, I’m still working on my shock. GE is clearly in the middle of a storm and like anyone caught up in this, it takes time to regain your footing and beliefs, mine as an admirer, included. No, GE in its real core, its product, is far, far, too good to fail.

As it slowly attempts to dig itself out of its own hole with a new strategy, let us see if it is enough to bring it back to health. Much is returning to the basics but recognizing that the recent business model needs a radical overhaul. The hard days to turn it around are still ahead.

Like many, I have a store of goodwill and sentiment for GE. I want to see them come out the other side, recognizable. I really wish I could help as I just feel they, the management, are ill-equipped for managing relentlessly a turnaround of this complexity and magnitude.

They do need all the help they can get and some good luck that sentiment; by investors, by the markets, by their customers. all the vested stakeholders, or their own employee’s, to not make the present position that GE finds itself in, even worse. Don’t hold your breath in the coming months, it will be a tough period.

It is theirs to do, they need to fight much within themselves, open themselves up to healthy questioning internally as well as externally seeking help. As I said, the floodgates are open, will GE survive but in what eventual shape?

***My research for this offering my personal assessment was drawing down from the GE material released in recent months, from management transcripts, numerous investor and analysts assessments and many views; especially countless articles on www.seekingalpha.com and in trade-related papers, or individual viewpoints that I found made a contribution to my own knowledge and understanding. Errors and omissions are clearly down to me.

*** some amendments or new editing was made on 7th December 2018

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We have seen the incredible rise of platforms that have become part of our everyday lives. Be these Apple, Google, eBay, Amazon, Android, Facebook, Microsoft, Alibaba, Salesforce, Uber, Airbnb, PayPal and many more, all becoming some of the hottest companies in value. They have built out their business on powerful platforms for us to simply connect into and draw down what we value.

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With the dizzy array of choices, combined with technical prowess and ‘plugging’ these into ‘seen’ customer needs.

These  are setting about disrupting existing businesses and establishing new ones, on an ever-increasing global scale.

So what and how is the incumbent meant to react if it is an existing market?

What should they do when they realize the traditional markets where they have safely operated for years has suddenly been overtaken by a new market creation, one that has gone outside old borders in industry and product.

Markets that are in the hands of the technically savvy entrepreneur are to be sliced, diced and recombined, are providing totally disruptive approaches to existing business models.

If they get the factors right, hit the needs of customers in their design, understanding, agility in responding to learning and adapting, ability to be fast to market and capable of scaling up really fast, then they transform spaces, leaving the established players desperately struggling to find answers and catch up.

The whole world of business is changing radically.
The existing organizations are failing due to their lack of agility, flexibility and ability to adapt; they always want to manage through existing systems, structures and designs. They constantly want to just simply optimize the existing and not radically redesign these.

Mastering the technology, thinking in radically different ways and harnessing to this customer need is just not built into the DNA of most existing businesses. They can’t let go, they hang on to what they have got and not capable of radically redesigning, in time, to offset this digitally savvy usurper.

Within all the failures to change there still remains inside our existing organizations there is the inability to let go, to open up and share. Control still dominates. There is still this relative reluctance to form broader collaborations that will provide new ways of managing through this technology led revolution.

The Ownership mindset still prevails, that of managing the assets, real estate, resources, value chain ‘as ours’ still dominates most board members thinking. Eventually this reluctance to not let go of large swaths of their possessions will be the death of the organization.

Changes that need to be faced in many situations need to be radical and most existing board members are ill- equipped to understand this, as they have not gained through their own experiences the skills to manage in highly fluid, entrepreneurial ways.

Their careers has been built in their era of rising through the organization ranks. Growth was found through expansion, through being efficient and effective, in leveraging ‘owned’ assets, not in seeking radical reinvention.

The business world as it seems to be radically changing is exposing this weakness within established organizations. Growth has slowed significantly, it is coming from exploring risk far more, with the world the entrepreneur enters and accepts is part and parcel of the ‘play to win’ entrenched within their mentality.

The established corporate executive is poorly equipped to compete in this technology age, where lean, agile and flexible are required to explore risk and new visions, increasingly critical to build and operate under.

This not only is the age of the digital savvy entrepreneur but it needs to the age where connectivity and collaboration will determine new business models that provide growth and scaling in ways not seen before and this is where the large, existing companies should be in the ascendancy here. It is where the analytic and physical meet and combine.

Managing in different ways in large organizations
Existing companies need a different game plan. A more open one built on collaborating, on leveraging, on tapping into low-cost capital presently available and pushing really hard for radically different business model design.

The closest I have as an example is GE , do really see this video, at least the 1st 15 minutes where Jeff Immelt sets about explaining the changes and how GE is currently undergoing a radical redesign. GE is radically designing its approaches around all these different links to explain their positioning on 1. digital, 2. the industrial internet of things, 3. the connected cities, 4. software and 5. an ecosystem of different partners and connected into 6. the industries they work with, all participating in this radical redesign of business and finding different solutions.

In GE words for instance “GE is transforming itself to become the world’s premier digital industrial company, executing critical outcomes for our customers”

External collaborations built on emerging platforms of shared need are becoming vital to change the dynamics of existing industry or service to extract growth.

Addressing the needs of a global customer, demanding not just a certain uniqueness in their solutions but a recognition that their partners really work on improving the business in more connected ways where innovation and technology combine with traditional effectiveness and efficiency needs.

This is requiring this partnership of global organizations to come together and provide solutions where all involved have ‘skin in the game’ and outcomes that can be measured in real growth and savings.

Large organizations all collaborating and leveraging their assets can respond effectively to savvy entrepreneurs.

This collaborative imperative need acquiring the ability to manage platforms, operate in different ecosystems simultaneously to form a significant part of forming the competitive response position to counter the young usurper, the technology savvy entrepreneur, who lacks scale, resources, existing established partnerships all vested in finding solutions and access to vital capital.

The customer is making this the “digital business era based on their needs”, where constant redesigning and orchestrating the parts will keep ‘things’ fresh and relevant.

It will be consistently offering new sets of combinations and leveraging a network of diverse capabilities that businesses will grow and these come through the exploitation and exploration of technologies and diverse partnerships.

New combinations can led to real competitive advantage

It will be how and where a business or entities of business come together and see where ‘people, things and their business offering’ can come together for mutual value based on the unique combinations that serve identified customer needs with all the different technologies available and the innovative way these are combined as the value offering.

There will be a constant evolving evaluation of the assets both internal and externally that make up this digital world (people, the business and things) that will take this out beyond the control of one company. This will evolve into a system of connected ecosystems working at a constantly evolving speed to gain identification and partnership adoption.

Innovation will certainly be one significant part of this, so it will not get any easier; it will be faster, more demanding and a heck of a lot more risky.

Managing within collaborative platforms the innovations that are needed to ‘work and deliver’ will be complex and demanding.

Innovation is hugely caught up in this transformational change.
To be an innovator, you are always restless but the present structures and frameworks that innovation operates within have been often highly constraining and heavily reliant on existing operations. Innovation as a system has often conflicted within the approaches taken by our present organizations.

There is an urgent quest in finding different approaches to allow the human side to shape, interpret and extract the value not just in what they want to see but through different lenses. It will be through the effective leveraging of all the different technologies that will fuel the innovation activity but in these new platforms of collaboration and ecosystems required to deliver game changing or game reversing innovation offerings to counter the usurper.

What needs changing is the innovation process to accommodate these changes that are occurring all around us. We will need to transform much within our systems but more importantly to orientate our skills to receive, translate and diffuse new knowledge, in significantly different ways.

The balance in innovation activity is changing
Whole new business propositions are emerging, where technology drives the change and many established organizations we know today are powerless to stop as they are unable to adapt fast enough to transform their business model, it is far to ‘vested’

They will need to adjust radically to a new collaborative model that leverages the assets they have and combine these with partners that can deliver global solutions that can scale, require large investments and resources, something the entrepreneur struggles with and is less capable to build, unless they have such a radical set of solutions heavily protected by IP and technology prowess. Time and resources to scale can be a wicked inhibitor unless you really have a unique offering, unable to be replicated.

The need is to transform into radically different form of entity that have intelligence, innovation, customer understanding of their real needs, deep connections, global reach in technology and capability to meet market needs, delivering to each customer’s specific needs.

Managing digital knowledge that adds value and growth

Digital technology is about to become the precursor for all the changes we have put off for years within our organizations. We need to radically improve our abilities to engage, relate and discover new innovation opportunities at a completely different level of faster performance.

Technology is presently moving way-ahead of the systems our organizations have presently in place, it is failing to extract the value and insights that others are beginning to clearly see and capitalize on through the connection of technologies and market insights.

Unless larger organizations fail to see the significant changes occurring then we will see the disruption of existing organizations will simply accelerate.

Today’s established organization needs to be fundamentally redesigned.
We are in a new age, the technology age and much needs to be challenged. This is no different from the arrival of the industrial age, it changes society dramatically.

We are dealing with a completely different set of mindsets, skills, procedures, governance, processes and responsibilities. To gain from the digital evolution taking place we need a robust, comprehensive and radical overhaul of much of what is going on within our organizations or they will not survive the current revolution occurring all around us.

It requires radical thinking in new design, leveraging technology and collaborations. I watch GE and how it is radically redesigning itself, it is significant “full-on, full load” . Presently it is the top of GE that is engaged in the huge change required, driving this down the organization, yet it is the organization underneath that is presently struggling to come to terms with this and the ongoing approach to business.

The level of change might be underestimated within GE but these next two to three years will determine this. Many other organizations must be watching with fascination and real interest but should be citing this as an example t learn from

In summary

I believe that many existing larger organizations will need to follow in their own ways this example of GE, by placing really big bets on connecting technology so it ‘runs through everything’  to not only stay in existence but to discover new growth paths built on technology, innovating prowess and established business that can be reassigned (realigned) to meet changing market and customer needs.

The revolution of business as we know it today is undergoing radical redesign in front of our eyes, are you watching from a safe distance, in the back seat in for the ride or in the front, driving this radically re-designed model in the real-time conditions that all pioneers face to prove it is the model of the future.

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The new combination is the new connections through people and things (IoT) that we can achieve a new innovation potential.

We will obtain increasing more powerful insights that have the real potential of being turned into new innovation outcomes, through the connected businesses we are presently needing to build. This can generate new value and business propositions.

Today the virtual world of digital is moving much faster than the physical ‘enacted world,’ of turning insights into actual innovation activities, through the innovation pipeline. Our innovation systems are lagging significantly behind. We need to radically redesign them and bring them up to date, fit for managing innovation in the 21st century.

The whole discovery to final execution, is for most organizations still a very fragmented, often disconnected system. It is highly reliant on manual systems with people often disconnected from the real innovation engagement making decisions on inadequate data or insights.

We are failing to leverage all we have gained from our innovation understanding over the years. We have this ongoing inability to adapt, to connect the innovation system through the use of technology and growing value networks, so as to provide the integration, the dedicated resource and accountability to deliver successful innovation outcomes that our customers require.

Successful outcomes are certainly possible, from a well-designed innovation management system brought up to date, adaptive, flexible and responsive, if we apply the time and effort to conceive and construct it.

It is still managed mainly through a linear process of stage-gates and investigation / validation to decide to move on or not. I can’t see this continuing to work in any efficient or effective way in such a digital hyper connected world, where insights flood into the innovation engine room, expecting the same ‘hyper’ response and delivery outcome result.

We need to address this incompatibility, we need to integrate and harness the innovation management system and bring it completely up to date and integrated in design and function.

In a series of posts I have been arguing that innovation management needs to radically be redesigned, based on the thinking around the shift from products to solutions, from transactions to growing far more value-adding ongoing relationships, from a supplier of product services to highly valued network partnerships, exploring innovation across all options, instead of delivering on discrete elements; this requires managing the whole ecosystem of the innovation design differently through technology, driving the design and response capabilities where platforms dominate and transformation becomes an ongoing process, to constantly evolve the business model, so as to seek out constantly changing market opportunities, in agile, adaptive and fluid ways, for successful innovation outcomes that meet those real customer needs.

Mashing up for explosive change
I recall reading that up to now, each digital technology change was a separate era of change, to absorb and adapt towards, yet today we are facing something seemingly different, a collision, a whole mash-up of disparate technologies and systems, that seem to be heading for such an explosion of change, a post-digital transformation.

This merging of cloud, big data, social, and the internet of things is becoming the new system of discovery according to some. Others call it the crossroads where the post-digital reality of bringing together the cloud, mobile, interconnected devices, data analytics and embedded intelligence are pointing us to a hyper-connected world, less tomorrow, more speeding towards us in the here and now.

Digital matters, in its raw innovating power and its potential business impact

I think digital is clearly a transformational phenomena across much of today’s existing business. The unique combining of the cloud, big data, social streaming, the internet of things, mobility, the industrial internet, are all making this the time for new growth opportunities through this digital economy and the radical overhaul of the activities to realize the benefits.

The enterprise integration will need to be constantly evolving, adapting and become highly agile, it will totally redistributed, decision authority will move more rapidly towards evolving business models and distributive decision-making, to seize breaking opportunities far more quickly than in the past.

Business models will not stand alone, they will interlock in intelligent ways, to benefit from scale that becomes the essential need and greater appreciation of sharing services, jointly working towards common outcomes.

These strategic connections will open up different partnerships, opportunities for shared cost of new channel developments, separate value propositions driven through common back office services and increasing requiring a platform management to manage these.

We are transcending traditional industry and product boundaries
The dizzy array of strategic choices will totally disrupt existing business models if they are right in their design.

The whole world of communicating, transacting and designing all the different negotiations and products that meet the immediate needs of the customer makes this the “digital business era”, where constant redesigning and orchestrating the parts will keep it at the forefront by a constantly evolving set of combinations and leveraging a network of diverse capabilities.

It will be how and where a business or entities of business come together and see where ‘people, things and their business offering’ can come together for mutual value based on the unique combinations of the different technologies available.

There will be a constant evolving evaluation of the assets both internal and externally that make up this digital world (people, the business and things) that will take this out beyond the control of one company, into a system within a larger system to make it work at a constantly evolving speed and gain adoption. Innovation will certainly not get any easier; it will be faster, more demanding and a heck of a lot more risky.

Innovation is caught up in this transformational change.

To be an innovator, you are always restless but the present structures and frameworks that innovation operates within have been often highly constraining and heavily reliant on manual operations. Innovation as a system has often conflicted within the approaches taken by our organizations.

The quest is in finding different approaches to allow the human side to shape, interpret and extract the value not just in what they want to see but through different lenses

The balance in innovation activity is changing
What needs changing is the innovation process to accommodate these changes that are occurring all around us. We will need to transform much within our systems but more importantly to orientate our skills to receive, translate and diffuse new knowledge, in significantly different ways.

It is through this combination of people and ‘things’ connecting into our businesses that we will be able to extract new observations, to give us insights that can lead to completely different innovation opportunities.

Huge amounts of data can be interpreted through specific algorithms but these will have to have set very clear parameters set within them, for them to be of any worth on what we believe is needed by our customers, for delivering successful innovation outcomes.

The real need is delivering a new integrated innovation engagement platform

Without doubt digital and physical operate at really different speeds. We need not just a new innovation management system, we need a modern engagement platform. We need to integrate and sync so many transaction and stand-alone systems that have been allowed to proliferate over the years to meet specific business needs.

The growing pressure will be demanded to find solutions that provide a cohesive and business-focused approach to the new social enterprise where we seek engagement at scale into a multiple array of communities and advocates that has data and innovation as its core.

The Need to Automate the Innovation Process

We still are very reliant on stage gate intervention points, often more due to dogma and imposed oversight by committees occasionally meeting.

Decisions are determined by the human, based less on hard knowledge or dynamic intelligence, often these have tended to be thinner on the ground to validate concepts and judgement becomes highly personal and reliant on (past) experience.

What can we change within this? There are leading practices to compare and contrast with but we do need to push this automating the innovation process further, in different ways.

How can we connect, enable and deliver better innovative outcomes?

There is so much to be realized, connected and enabled for the higher scale, richer, more innovative business outcomes but it is a massive undertaking that is only just being ‘kicked off’ by the current internet of things. It will eventually become the integration of everything but the disruption and realization of what needs changing is only just dawning on many.
We need to review organizational engagement.

Much has to change, be uprooted and completely revisited to begin to design a new digital and physical integrated innovation system.

The need to respond quickly to new business objectives

We will need to adjust our thinking on risk. Technology insights can provide a better mitigate risk, it can equally fine tune innovation but it can equally make it far more complicated. Massive amounts of data can complicate decision-making, determining the right decisions and next steps.

Technology will require opening up the present risk mitigation process to capitalize on emerging opportunities at greater speed and higher levels of compromise, to meet that emerging opportunity ‘seen’ requiring it to be turned into commercial offering quickly, so competitive advantage can be gained.

Managing digital knowledge that adds value and growth

Digital technology is about to become the precursor for all the changes we have put off for years within our organizations. We need to radically improve our abilities to engage, relate and discover new innovation opportunities at a completely different level of faster performance.

There are many issues both strategic and tactical to work through, to extract the rich potential from any digital transformation for new innovation growth outcomes

Digital is presently moving way ahead for the systems our organizations have presently in place. What does need changing to ultimately yield the innovation returns we will be looking for?

Expectations and reality needs resetting, the hard work is not ‘just’ in connecting the technology, it is its impact that it will have across the organization to be able to ‘react, respond and reorganize’ in very different ways from today’s practices.

We are dealing with a completely different set of mindsets, skills, procedures, governance, processes and responsibilities. To gain from the digital evolution taking place we need a robust, comprehensive and radical overhaul of much of what is going on within our organizations.

We need to begin to really think though this as a complete redesign – achieving a clear engagement platform for all to gain from

So in our need to achieve a greater engagement from everyone within our organizations we need to recognize the importance of having a ‘modern’ engagement platform available, a central place for scalable learning to take place, so we can structure the new knowledge and insights that is coming into the organization and manage this through a well-designed innovation system into a final execution of successful innovations.

Moving from ad-hoc approaches to an integrated, synergistic and designed for each organizations unique state for the innovation management process to perform in today’s and tomorrow’s world on a sustaining basis. One where technology is central to its structure, highly connected, highly adaptive and totally fluid in its response to meet the constant array of innovation opportunities, looking to have solutions applied to them.

Is there not a mounting case for designing a new innovation management system?

I clearly am convinced there is and it certainly can be designed today in my opinion.

What is involved in plotting out a new innovation roadmap, who is the lead orchestrator or the navigator in this and can we structure this design accordingly, to bring it into our organization sustaining innovation?

One that offers a system that is fully integrated, connected and compatible with the needs of the business to grow and recognizes the need to build a sustainable innovation capability.

One that can to capitalize on the innovation opportunities being discovered in new and different ways that need connecting and accelerating, into commercial propositions that meet customers’ needs?

I want to look deeper into these in the coming weeks to add some thoughts to this new innovation system design and where and with whom it fits.
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They become fixed, rigid and locked into their established ways, not adapting to the changes occurring around them. We often give up and leave, moving on to better places and challenges.

We seemingly are reluctant to undergo any transformation, experimentation or adjustment in our organizations until it becomes a matter of survival, then its often far too late.

Then it becomes a mad scramble to transform ourselves, often with damaging consequences of deteriorating performance, battling more competition that are sensing our weakness, never capable of returning to those previous highs.

We simply  hate adapting or adjusting, certainly on a constant basis, we resist any form of ‘greater’ transformation – why?

If we can’t adapt to changing times, we simply struggle to survive, that is the growing reality operating in today’s environment. Simply put companies ‘die’ due to their inability to adapt to change and transformation projects fail because the message somehow fails to register and never gets completed to the original objectives.

According to a survey by McKinsey in 2011, 72% of our transformation programs fail to deliver on their original targets. Also one out of every two of our top organizations in the Fortune 500 will be gone, history, dust, taken over in ten years, according to the OECD.

Unless we create a strategy to transform, how can we re-imagine our innovation processes?

We talk so much about “innovation is critical” today and in our future, but is rarely achieved.The confidence levels plummet as the pressure to innovate mounts, simply because the necessary components of delivering innovation are critically missing.

Innovation requires us to do something different or something new, to explore, where as transformation wants to make dramatic changes in the form, appearance or performance, more to exploit and capitalize on changing conditions. We are at a crossroads of determining if the management of innovation should change and if so, how.

I argue that innovation management needs to radically adjust and will be based on the thinking around the shift from products to solutions, from transactions to growing far more value-adding ongoing relationships, from a supplier of product services into highly valued network partnerships, exploring innovation across all options, instead of delivering on discrete elements; this requires managing the whole ecosystem of the innovation design differently through technology where platforms dominate and transformation becomes an ongoing process to evolve the business model, so as to seek out constantly changing market opportunities, in agile, adaptive and fluid ways, for successful innovation outcomes that meet those real customer needs.

In this fourth post of an extended series I explore the potential for changing the management of innovation, this looks at transformation, our willingness and capabilities, on being capable of “moving towards a new way of managing innovation”

This does require a transformation of how we design, structure and bring together all the relevant part of the innovation process. This requires technology to be central to this different thinking, alongside a radical shift in how we see innovation. I refer back to my evolving hypothesis above of where, why and how this innovation management needs to shift.

Can innovation and transformation combine and work together?

We hear far too much about the need to transform and change. We do need to get a whole lot fitter in our innovation understanding to transform it into a more robust, sustainable process.

Firstly isn’t Change and Transformation the same thing? Well, not really.
Change = to make or become different (often includes more or better). This is where incremental improvement resides. Most of our innovation activities reside in this change space, fooling us, tricking us to believe we are “making real change”, whereas we are just pushing ‘things’ along.

Transformation though is = a thorough or dramatic change in form or appearance. This is where breakthroughs live. This is where innovation needs to go to counter the fundamental shifts going on in our markets, to really drive and thrive in an increasingly hostile environment.

Yet both transformation and change bring new possibilities into reality.

Both require thinking that is broad and expansive, with a strong sense of curiosity and discovery.

Unless we refocus our current management approaches to both be transformation and innovation, we will continue to face losing our competitive edge. Needlessly defending and spending our capital on the position of yesterday, not looking to seek out and transform to seize the new positions or opportunities that are occurring in our rapidly changing world.

Adapting the business model to the needs and desires of the market

There is a real shift for adding greater value within innovation occurring. There is this growing recognition that product alone has good value but it is the power of combining this with a range of services, by designing this into specific business models and solutions, that deliver on the needs of the customer.

I was reading an interesting article from LEADing Practice® posted on the iGrafx site who offers a set of process design, analysis, optimization and management capabilities . LEADing Practice® performed a study (not sure when) to uncover the obstacles to achieving innovation and transformation. 1,765 CEO’s and 2,936 business leaders representing all major countries and industries were surveyed.

In this article they were suggesting that most successful companies’ focal aspects of innovation are on new value, revenue and service models, while transformation is centered on cost, operation and performance.

To quote from the article “It’s no coincidence that when talking about successful companies and their ability to adapt to change, that they are achieving both innovation and transformation by applying both best and leading practices in appropriate domains of the business”.
“Best practices are transformative and should only be applied to non- core competencies that don’t effect differentiation – they are purely about meeting the market standard. These lend themselves especially to cost and operating models, which are not made up of core competencies. Leading practices are about doing things efficiently, but different – innovating. They are how they create value, deliver service and generate revenue and growth.”
“While best practices are tried and true methods that can and should always be applied, leading practices are methods of adapting best practices to situations that require a difference – this is a key differentiator”.

I needed to pause for thought on this as they are suggesting transformation and innovation are separated on their focal aspects. I’d never broken them up as specifically as this as I always saw this as the two sides of the same equation – the front end (value, revenue, new value propositions) and the back-end ( managing costs, operational aspects and the broader performance of key stakeholders) but both working towards a common goal- transformation through innovation.

I am a great admirer of Alex Osterwalder and the work his team over at Strategyzer are doing around and applying the Business model canvas into designing new models that have innovation and transformation as part of them. Does this article raise a new way to think about the design of the BM.

I actually do need to think about the linkage of transformation and innovation through the lens of the BMC some more, based on this article.

I do have a certain ‘crankiness’ around best practice – it is often a killer of your innovation

I do get a little cranky on this ‘reliance’ on best practices, most of our organizations like to gravitate towards. I totally agree for innovation it is actually the art of “learning practices” that emerge as ‘leading practices’ but these evolve often in highly unique and different ways. Often that is why innovation is hard for many, as they often fail to recognize the uniqueness within its makeup for them and take the existing practices, to simply copy.

Best practice is where everyone seems to want to go, the lazy and mistaken route to transformation and ending up at a point of no differentiation as everyone is also attempting to get to this point of best (existing or past) practice. It is leading practice, exploring, keeping it still efficient but different that you move towards a real competitive difference. I call this far more the ‘emerging practices’ that are working on the parts that add value, service and new revenue. These are often highly unique to individual circumstances, individual organizations and their market conditions and position.

The article stirred up my thinking at least, reaffirming my own beliefs on practices, on the increasing importance of the business model design in all we do and think. When we want to innovate, we should look at the transformation impact and this suggested allocation has sharpened my thinking, although parts of the article I’d debate or want a deeper explanation. Still take a read.

The experimental model is replacing the rational choice model

Rational choice is the familiar one where we set ROI’s, KPI’s, establish clear milestones and expectations from new projects or innovation. We are driving towards predictable outcomes. Is innovation by its unpredictable nature on time, always defensible and predictable? If it is then we are back in the land of incremental innovation where risk gets delegated down and we keep informed only to ‘what we think we know’ not what is changing. We lose so much by approaching innovation in a ‘prescripted’ manner.

The experimental model is far more the place to be in today’s uncertain and rapidly changing world. To succeed in today’s networked economy, businesses must participate in dynamic, evolving networks of diverse organizations based around platforms and ecosystems offer the fertile ground for collaboration and transformation.

And while such networks can be difficult to navigate, they offer companies the opportunity to evolve their business models, deepen skills and knowledge, expand into new markets, and scale operations. To experiment we limit risk, we learn through engaging in market understanding, validating needs, we adjust our model, then we rapidly scale, keeping competition lagging.

For companies seeking to reinvent not only their products but their business models, minimum viable transformation allows for rapid iteration on the unknowns of a new business model. This MVT thinking comes from Deliotte University Press and partly from one of my favourite thought leaders, John Hagel III. It builds on the initial work of Eric Ries and his minimum viable product thinking within the lean startup thinking methodology.

For companies seeking to reinvent not only their products but their business models, minimum viable transformation allows for rapid iteration on the unknowns of a new business model—anything from minute changes to operational processes to full restructuring of the go-to-market strategy. At its core, it’s a strategy for gathering validated learning about individual business model elements, then assessing how those elements interact and combine to form one cohesive strategy.

Based on the minimum viable product and lean start-up philosophy you are replacing internal intuition with the learning to iterate around your learning about market factors and what is valued and needed as innovations and adaptive business models.

The experimental model with the MVT thinking contains the risks down to more manageable levels; it allows you to explore market needs far more and exploits new learning by delivering and adapting ‘as you go’ and then scale.

You are combining the power of transformation and innovation.
Transformation and innovation are combining as your new agenda. To achieve a growing understanding of the kind of decisions companies want to make then we must transform ourselves on how we undertake innovation, to lead us out of average performance into a more radical, robust growth performance.

We must envisage, invest and lead and this will come through adapting far quicker to different business models, use new technologies and its powerful connection and analytical capability, so we can critically evaluate the operational process and engage with customers in all possible ways.

Innovation is far from static, it should be highly dynamic, it should be adapting and adjusting, it should be highly fluid. I’ve written on this need for fluidity as we are facing this considerable discussion around changing structures and models to become more adaptive, agile and fluid, to react and deal with this increasing turbulence occurring all around us.

Summary

We need to react and become more responsive, becoming more adaptive to changing environments and business challenges, that are often unknown, unexpected, or not yet explored or exploited.

Shifting to a different change model to meet the changing market conditions and customer needs will require a high level of transition; it needs us to transform our innovation management practice

A further white paper “Why innovators need a new change paradigm” takes this need for transformation even further, by looking more specifically at emerging models and the competencies required to react to this change in these more ‘fluid’ ways.

To achieve this different state, technology is central. My next post in this innovation management journey discusses why “Technology leads, we are lagging”

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