Innovation is often too intangible, full of unknowns as the very nature of anything new and different. Innovation risk leaves many executives very uncomfortable.

Organizations get uncomfortable when the words “radical” “intangible”, “unknowns” and other words like these when they form part of the conversation. It often starts to induce that “risk twitch” where that careful management for short-term performance might become threatened, or the manager feels any decision is ‘going out on a limb’ and possibly career threatening.

That growing uncomfortable feeling that innovation places their bonus at “risk” so they like to ring-fence innovation as much as possible. Now some of that ring-fencing is fine, you contain a risk to keep it manageable but most innovation does not constitute organization risk, yet it gets caught up in that risky fear that innovation seems to induce. Actually, if we were managing innovation at the core, our risk management for it would be very heightened and managed differently, but how many of our companies’ have innovation as their core?

So I always welcome discussion on risk and innovation. The more we talk about it the better for what is coming towards us.

As we talk about managing risk and innovation we can become more comfortable, yet when you often hear those leading the discussions on this innovation risk, where they keep overemphasizing “Risk-appetite, risk-attitude, risk-adversity, broader risk, even risk-contagion,” now if this does begin to get you nervous. Reality simply is, when most of the innovation is exploring the unknown to change the known for something better, then organizations seem to go into a certain “lock-down” when it manages the innovation-risk equation. Innovation remains uncomfortable for many senior executives.

Recently I re-read a recent PwC report “Managing risks and enabling growth in the age of innovation” as they continued to periodically give risk an innovation focus. We need more reports on innovation and risk. I can recall two or three reports they produced around this ‘risk and innovation’ theme over the years, happily sitting in my taxonomy of innovation, always useful to refer too. This latest one had an opening theme about innovation being described in more revolutionary terms such as part of the fourth industrial revolution, the second machine age, the cognitive age and this is adding more pressure to innovate or search for “greater innovation within companies.

Of course, the more you invest in innovation, the likely the risks will increase. So the report polled 1,500 executives, focusing on managing innovation risk and how effective they are in managing this risk-reward balance needed for innovation. As I have just finished writing about innovation and the 4^th Industrial Revolution in my last post, it was good to try to find some new ways to look at the changes going on in innovation.

I cannot agree more with PwC and the fact that the innovation and changing risk landscape is making us all think differently. I have called this the “new innovation era” where technology is underpinning so much of innovation’s activity and outcomes.

I have written about risk at different times, such as a post “Treating innovation risk differently, dealing with uncertainty” and a few times since. Enter “risk” into the search box to check these out if you are interested. A very extensive review of risk I wrote in suggesting “Developing a new framework for risk and innovation”

Yet this post is not about the risks but the emerging possibilities

As we enter this different era of innovation, as we begin to connect “everything up” through implementing the 4^th Industrial Revolution we do have so much new possibility for innovation than ever. Two of the visuals (figures) within the PwC report excite me in the optimism of taking innovation out.

If you look at the “within 3 years” add-on (see below), it does paint a really good picture of innovation opportunity, and by implication, the increased risk, in my opinion. This will simply not be the “as is” to simply extend our existing innovation activity,” it will be radical in innovative change. It simply has to be, coming from technology connecting up our networks supporting and forming new collaborative relationships providing us a growing set of new technology options, we have to integrate within our business thinking. These are all emerging frontiers for innovation to explore

Combining technology and innovation gives me real optimism for innovation, does it for you?

Yet just question if you are focusing on these types of innovation? I bet you many of you are not giving this much focus, your company is still debating and figuring out how to integrate the systems and processes required for such a magnitude of change. Well, innovators need to start pondering all the possibilities. Ask yourself what new innovation growth they could bring to your innovation activities?

There are new sources of revenue, of building out our growth options will certainly come from technology- it will enable projects, form new alliances through the greater ecosystem and network forming platforms. We have the potential for this connecting ability to achieve scale and global presence through the ability to connect across global networks and form new partnerships. New business models can emerge, enabling a moving beyond traditional borders, adding in new supply chain resources. All grow in innovative opportunities when you build out a digitally connected enterprise.

Then I wanted to put another spin on a second  PwC visual shown below.

This one outlines'” a programs ability to effectively manage AI, IoT, and robotic risks”. Confidence is growing as we learn to embrace and value new technology enablers. Now my spin is simply  around “where is the new innovation possibilities in the exploitation of these emerging new technologies?” They really excite me, a little frightening for me as well, yet this adoption of new technology innovation must have so much new innovating potential, waiting to be extracted from implementing and leveraging these new technologies.

When you consider the incredible list of technology enhancements we are thinking through and adopting across a business, as we  learn their value to our business, we can clearly see a number of real innovative growth opportunities as we embed and extract value out of these:

• We can streamline operations and maintenance
• We can optimize assets and increase their ‘connecting’ value
• We can get closer to greater workflow automation
• We will focus on data as it forms a greater part of our strategic input as well as build out the security of this
• The ability to engage with customers directly and in highly personal ways from the connected 3economy
• We can achieve a higher dynamic of scale, speed, size and customer intimacy thanks to technology.
• We can achieve rapid adaption and continuous improvements through greater data monitoring and management.
• We can own assets, share and build out our service provider activities from leveraging technology
• New Business models become increasingly possible by mixing and matching resources and opportunity spotting.
• We gain new learning and awareness, sharing and exchanges on experiences

All of these bodes well for a new innovation era they give me optimism. Just reflect on this excellent visual supplied by PwC on each of the enablers to achieve this new range of innovative options.

Yet the innovation impact is troubling me though. Can we achieve all the promise emerging from these different technologies?

The huge elephant in the room is this: do we have a new innovation system in place to adapt to all this significant change occurring in the next few years?. Our present innovation processes and structures live in a different age, the old industrial age, not in the new one, the one where we connect up everything, as the 4th Industrial Revolution indicates can be realized. I wrote about this from the innovation perspective in my last post “Innovation cannot expand without the 4th Industrial Revolution“.

Have you explored these yet? I think we are still grappling with their meaning, their new positioning inside and outside our organization on their effect. Yet if we ask “what are those new possibilities” by exploring them from the innovation perspective, it perhaps offers some really new, exciting innovation potential we can only begin to consider.

Innovation is moving from taking an idea, validating it and then run it through a pipeline to build out and commercialize. Innovation is going to get increasingly complex as it brings in all the different technology enablers into play. What they provide is data, in new insights on how to manage, respond and connect all part of the business, to extend this into customers to engage. Without a doubt we need to design a far better process to innovation, we need to rethink how we manage innovation.

I am scratching my head on this, yes I am getting splinters in doing this, but we are changing the very way we are needing to manage innovation. It involves different people, different thinking, different processes and this adds up to a very sizable new level of risk that we have to manage and orchestrate. As PwC suggests there is a new risk appetite in how we are investing in technology and yes, we are learning to share risks far more through managing innovation, this being far more through platforms and ecosystem design. We need to manage our assets differently, we need to invest and equally divest and outsource and give a real fresh emphasis to our innovation capital differently, and that also means discussing innovation risk differently.

I don’t have the answers, only some emerging thoughts on where this seems to be heading- the new innovation era –  but we do need to lift innovation out of its place today and give it a much higher sense of urgency in how we manage it. Risk’s are taking on greater risks in Security, in Transaction, in Customer dialogue that innovation needs re-setting.

It is all about building new capabilities and the capacity for innovation

As we move towards a new age where technoölogy connects us up we are forced to address the need for a radical review of our existing capabilities. Do we have the capacity and skill-sets for extracting out new innovation opportiûnities? We will need a much higher level of “rapid and effective” sense-making, portfolio management, and execution, of those new innovation opportunities.

We will certainly need a very different approach to risk management. The greater the innovation opportunity, the higher the risk management becomes. We need reset points all round We are going to be dealing in a world of “all things” being visible and a greater relationship with all potential things being invisible. We are dealing in a world of the immediate, to read and react too and the dual world of scoping and exploring, based on a greater informed gut-feel, growing in relying on data validation and a healthy theoretical belief and vision of how this all connects up all those ‘famous’ dots.

Today we are facing increased frequency to react, a greater pace and speed to move from decision to execution. We need to redefine new tolerances of performance, to firstly seize and then grow these “breaking” opportunities. These new opportunities are coming from multiple points of value, not just one product or a service perspective, they are all different and we need to bring a different thinking to innovation to manage them accordingly.

We need to accommodate data analysis through ‘richer’ visualization tools, we need better dashboards of discovery and awareness, we need a new approach to different capturing tools on the needed innovation inputs, drawing our attention of where innovation is emerging and signaling opportunity. It is the ability to utilize and extract from all this technology connecting-up, through our learning of the innovation outputs and outcomes from applying the 4^th Industrial Revolution, through working in platforms and ecosystem designs for innovation, we really need this transformation of innovation thinking

Interestingly I feel one old evaluation model of innovation risk actually seems to have a new twist or lease of life if we add one new evaluation dimension. We have mapped innovation ând its associated risk according to three dimensions in the past: the degree of uncertainty, the degree of controllability and the relative importance in benefit. Well perhaps we add another, the degree of technology connection (our network relationships) we have embedded and put to use in our innovation activity.

In Summary

We are recognizing there is a growing pressure to change, the technical advantage is offering new revenue and innovative sources of growth. We can see a dramatically changing landscape of the business boundaries becoming more permeable, and a increased pressure on resource management in a changing world. Innovation needs to shape up to deal with this.

I want to thank PwC for their continued focus on innovation and risk. This recent report gives me optimism. It raises the level of risk but it is offering different strands of thought (for me) to begin to frame my “new era of innovation” in further ways.

The post Optimism in Innovation, Thinking About Risk Differently first appeared on Building Your Innovation & Ecosystem Intelligence.

In a recent report, jointly from the World Economic Forum and McKinsey called the “The Fourth Industrial Revolution and the factories of the future” they made a number of observations

“After a decade of flat productivity, the arrival of the Fourth Industrial Revolution (4IR) is expected to create up to $3.7 trillion in value to global manufacturing. A few years back, experts noted that the changes associated with the 4IR would come at an unprecedented rate yielding incredible results for those who truly embraced them.

Still, the hockey stick of benefits has not kicked in yet – while all companies are making efforts to adopt technology, most of the production industry (~70%) remains in pilot purgatory (where technology pilots last for extended periods of time, and companies do not take the final step of scaling up viable technologies). Less than 30% of manufacturing companies are actively rolling out Fourth Industrial Revolution technologies at scale”

No wonder we presently have trouble attracting many businesses onto platforms when they are still very much behind in deciding or deploying a strategically thought-through IIoT digital design, that is connecting everything up.

It is equally holding a new form of innovation back, one that is highly collaborative where partners come together to work on more complex problems. Collaborators can achieve solutions only by being “fully” connected up, comfortable with their data, understanding and contribution, both within their knowledge and insights.

The power of multiple-connected ecosystems gives innovation a completely different momentum but it needs this 4th industrial revolution to be fully operative, for a digitally connected world in manufacturing and beyond.

According to a recent Deloitte report: Most manufacturing lines still look a lot the same way they did 10, 20 or even 30 years ago. Operators clock in, have a brief conversation with their crew and shift supervisor and then operate a machine or tool for 8-12 hours before heading home. Depending on the day, the machine may break and need maintenance or an adjustment, the line settings may need to be modified for a specific product or run, or the operator may need to step away to resupply the line or be trained on a new procedure. In 4IR transformed manufacturing sites this is no longer the case. So why are we adopting digital in our manufacturing plants slowly and very cautiously?

The biggest reason is dealing with the fear of the unknown – a lesson in 4IR change management.

This fear of the unknown, that constant blocker of “not been tested in our environment” has greatly inhibited adoption. Equally the nature of much of production has been designed “on the fly” and the equally tough job of connecting the whole process up in a new integrated, fully connected system meets huge resistance. Legacy systems plague the ability to break out of our present traps of silo’s and we are still struggling to solve these issues, machine by machine, a process by process, incompatible software and hardware, piece by piece.

Arguably Industry is trapped by complexity. The system complexity, understanding and investment delays are often huge and difficult to unwind. Many organizations are constantly meeting resistance to change, building some very mixed views of transformation and its lasting benefits. Thirdly the redesign to save space, and to determine more up-stream flexibility needs embracing digital solutions and reliance on partners and levels of collaboration not truly established to date. Any revolution is difficult, costly and requires time to work through a change in “order” to adapt to the new.

The Underpinning drive to connect-up is getting closer to that “crossing over” point

Increasingly, there is this recognition that the competitors seem to be moving faster towards becoming more digital, so it then becomes a race to catch up, as this “digital advantage” is increasingly eroding competitive advantage for the digital laggard, even if he is today the market leader. There also continues today that industry disruption is increasing, by those spotting both opportunity and weakness in present market players. Those that are digital laggards can’t achieve the same flexibility, the speed of manufacturing change, productivity and response as the new investor, building more on “greenfield” principles. The established player has processes that are fixed far more on past trading conditions, where longer production runs produced (past) economies of scale that became over time, more rigid and not adaptive.

Supply chains have often remained reliant still on manual instructions with limited visibility to the whole supply change to manage, adjust and respond. Today, production is changing its philosophy where flexibility is “baked in”, for adapting further upstream and downstream so as to cater to a greater individual client and customer need. High levels of automation are generating the “digital factory” that comes as an offspring of this 4th industrial revolution.

The internal change is slow. There is a strategic resistance, there is a lack of organizational agility and still not the level of commitment this is required, driven from the top. Hence why we are stuck in so many “pilot purgatories”

Yet the threat of not changing is building pressures. this reluctance to embrace a new digitally connected world is feeding the “seeds of destruction”. Customers expect rapid response, reduced delays, tailored designs and greater engagement.  What is going to shift the needle on this dramatically to recognize we are in a real revolutionary period and caution is not your friend but your enemy?

There are increasing use cases being built and shown. The WEF wants to create a neutral, learning platform, which provides the best technical and organizational insights with respect to 4IR technologies in manufacturing to accelerate the delivery of the benefits, to give a sort of safe harbor. Such a learning platform will also facilitate collaborative action and the new partnership between companies and governments. Confidence grows through these learning exchanges This will partly help yet this will not be the real catalyst, that lies in addressing the old legacy problems, in bold, imaginative ways.

Innovation is one powerful catalyst ripe for leveraging in this 4th Industrial Revolution.

I wrote a post over on the Hype site “The Innovation World is Changing Due to the 4th Industrial Revolution“: We first need to recognize that there are twin forces at work, feeding off each other. We are facing greater disruption and an increasing innovation pace. These are constantly combining, relentlessly adding the new shape to our future. We are actually caught up in a very revolutionary period. The prospect of new innovation potential will eventually work through into the world of Industry 4.0 as a major game changer“. It is all ready for those accelerating and being fully committed to their 4IR journey.

We have to recognize the days of simple product innovation are dwindling. where technology, digital solutions, greater customer insights, where a new breed of designers, engineerings, scientists and software talent are combining built through a platform and new innovation ecosystems thinking, are all emerging. This new innovative approach is building greater complexity into our final innovation offerings, yet it is providing increased customer value or societal needs, on problems that require this combined thinking.

We need to recognize that we are increasingly becoming reliant on collaborative platforms, to realize the result: one of more radical innovations, that are capable of winning the hearts and minds of many consumers as they are more adaptable, adjustable to personalization, rapid shifts in trends or solving their complex problems with imaginative solutions, unseen at the time, in ways not possible without embracing and connecting up in the digital world.

Reality dawns, when the penny finally drops as I said in the Hype post “The customer is increasingly at the epicenter of the economy. The products and services are enhanced through the digital capabilities that boost their value and worth. New materials are making our assets more durable and resilient, and data and analytics provide the valuable feedback needed to build even better services and performance in the future. All this connecting and reacting is requiring new forms of collaboration, and we are seeing new types of organizations emerging. They are far more dependent on platforms and ecosystems. Innovation is the unlocking mechanism”

There is a real value in recognizing and delivering on the fourth industrial revolution, we can start to think outside our classic product innovation boxes. We can shift our often-linear thinking as the Industry 4.0 is the revolution that connects all the parts. We can loop, explore, connect, build scenarios, test assumptions, build digital twins to just the product and manufacturing impact.  Recognizing the transforming potential of having fully connected up digital factories will revolutionize how we manage innovation going forward. It shifts our thinking and the management of innovation dramatically.

The ability to have a more “rapid response, flexible manufacturing” can align more to market shifts earlier. We can begin to design products that are more “digitally connected” that can be updated in the consumer’s premise or hand. We can enhance “their” innovation by shortening the time-to-execution and extending the product life cycle, we can build new potential through greater innovation design, based on increasing insight and collaboration.

Growing the business in new ways, we are building revenue based on Industry 4.0.

Deloitte put out one report “Industry 4.0 and manufacturing ecosystems. Exploring the world of connected enterprises“ where it focuses on a few themes that point towards the benefits of IR4. One is growing the business through I4.0 and also integrating the digital and the physical to achieve business objectives

Growing the business comes through the transforming of engineering, research, design and achieving increased levels of customer engagement and interaction and achieving a greater co-design of the products themselves. The key is again through innovation to make already existing products smarter, offer more data relevancy from smart technology, the change to add completely new products and services in format or build alternatives in business model thinking.

We have the ability to apply a greater “intelligence” to marketing products, using analytics and predictive customer tools to draw closer to actual need. The opportunity to improve the aftermarket experiences, extend the life of the product and work towards maximizing uptime all have value. The use of sensors dramatically helps connect the product throughout its lifecycle to be constantly monitored, updated and managed in collaborative ways between the buyer and seller.

Application-based technology, based on connecting in new digital ways, can reduce the idea to market, be able to digitally link design to product intelligence and improve the overall effectiveness of having connected engineering. We can test, provide feedback on early design concepts, adjust them and redevelop their designs within our network of suppliers, customers, and the manufacturing.

Integrating the digital and the physical to achieve business objectives, the arrival of the digital twin.

Deloitte nicely put this as “It is the leap from digital back to physical—from connected, digital technologies to the creation of a physical object—that constitutes the essence of the Industry 4.0 concept”

We are at a point of combining information technology (IT) and operations technology (OT) to enable the creation and use of a digital twin for example and fuse our operating environment into one.

Deloitte points out “The value of a digital twin can allow companies to have a complete digital footprint of their products from design and development through the end of the product lifecycle. This, in turn, may enable them to understand not only the product as designed but also the system that built the product and how the product is used in the field. With the creation of the digital twin, companies may realize significant value in the areas of speed to market with a new product, improved operations, reduced defects, and emerging new business models to drive revenue.

The digital twin may enable companies to solve physical issues faster by detecting them sooner, predict outcomes to a much higher degree of accuracy, design and build better products, and, ultimately, better serve their customers. With this type of smart architecture design, companies may realize value and benefits iteratively and faster than ever before.

A digital twin can be defined, fundamentally, as an evolving digital profile of the historical and current behavior of a physical object or process that helps optimize business performance. The digital twin is based on massive, cumulative, real-time, real-world data measurements across an array of dimensions. These measurements can create an evolving profile of the object or process in the digital world that may provide important insights on system performance, leading to actions in the physical world such as a change in product design or manufacturing process”

“Indeed, the real power of a digital twin—and why it could matter so much—is that it can provide a near-real-time comprehensive linkage between the physical and digital worlds. It is likely because of this interactivity between the real and digital worlds of product or process that digital twins may promise richer models that yield more realistic and holistic measurements of unpredictability. And thanks to cheaper and more powerful computing capabilities, these interactive measurements can be analyzed with modern-day massive processing architectures and advanced algorithms for real-time predictive feedback and offline analysis. These can enable fundamental design and process changes that would almost certainly be unattainable through current methods”

The Deloitte report Industry 4.0 and the digital twin is a highly useful reference to read.

The present organizational inertia is stopping innovation to realize radically different benefits from Industry 4.0

There are so opportunities for innovation well beyond products and services. We require new approaches, new skills, different talent and design capability to realize and leverage the power of connecting coming from industry 4.0. It can offer us, for the first continuous learning, we can tap new a network of talent through ecosystems and platforms designed for greater collaboration and exchange. We can reach far more into underserved markets through greater customer connections and engagement, we can co-design with them.

We can, by embracing 4IR, have available far more predictive and evaluation tools to help improve processes, to reduce or test risk, to prototype and experiment, partly engaged with customers in learning and adjusting design and value. We can build and connect different supply chains that read and react, we can create new ecosystems where we share a common goal and value, we can enable more agile systems that can adapt and respond to changes in real time to reconfigure the ‘connected factory’.

Innovation emerges out of the Industrial 4.0 initiative in radically different ways to explore and exploit.

We are waiting for the fully connected up factory and process so we can apply a very different digital set of innovation tools. Until then we have innovation being managed the current linear, disconnected way.

We fail to have a seamless set of connections into our industrial process world, into our designers, engineers, research scientists and more importantly our customers. Until we all get the same “line of sight” innovation stumbles along its familiar “guessing game” derived of insight and underlying knowledge.

The quickly we connect up and build the fourth industrial revolution we can explore, build and redesign our whole innovation process. We can .look towards managing more radical innovation design in ecosystems and networks, that push existing boundaries, explore new technologies and materials, that all can combine into the Innovation Revolution that follows the Industrial Revolution.

The post Innovation cannot expand without the 4th Industrial Revolution first appeared on Building Your Innovation & Ecosystem Intelligence.

If you are not aware, it is worth reading about the Gordian Knot.

“For people the world over, the Gordian Knot represents the difficult, the intractable and often the insolvable problem.

Today’s systemic business problems are the modern-day equivalent of this seemingly impossible challenge, our Gordian Knots to untie or cut through.

According to Greek mythology, the huge, ball-like Turkish knot with no ends exposed was impossible to untie. An oracle had predicted that the first person to do so would become the ruler of all Asia. Thousands of people had tried, without success, to unlock its complex riddles. Alexander of Macedonia, son of King Philip II of Macedon, solved this puzzle simply and very creatively – by cutting it in half with his sword, exposing its ends and making it possible to untie. Alexander the Great went on to conquer all of Asia, just as the oracle predicted”.

So are Organizations Cutting their Gordian Knots?
So how can we cut the intractable knot inside organizations and thrive from it?
We all face increasing uncertainties and are having our trust battered. We live increasingly in a world of complexity. We are seemingly not rising to the challenges that seem to be growing in this complexity in the global, organizational and personal context.

For me it is attempting something new and different, can often undo these knots we find ourselves. We grab digital transformation as one of those solutions. Often that simply makes it even more complex unless we cut through the current impossible knots we have today.

Innovation has a vital role to play but it must be ‘treated’ differently.
Where do we start? Firstly we need to revisit any work we are thinking about changing more on an “adaptive enterprises and systems” way of thinking.
We need to find ways to deal with unpredictable, discontinuous change and make this more predictable for us to manage.

We need to be agile, fluid and adaptive in allowing design, systems, and processes to continually adjust, to reflect the constant challenge of change going on continuously.

We lack often a real coherence of purpose; we lurch from one opportunity to another, from one-quarter of financial results into another, reacting to that moment, often defensively, with often no longer-term consistency in our activities. Performance has been taken over by opportunistic behaviors. Innovation often takes the real brunt of this. It gets cut like it is the very knot that needs cutting!

Our intended strategy, moves suddenly, into more of a deliberate strategy, and then somehow this gets abandoned or unrealized. We keep responding and slowly we replace this with an emergent strategy that is rapidly become our realized strategy that we present to the world, as a response to ‘factors outside our control’ for our often indifferent performance. We are passing through different strategy responses without any coherence of purpose.

Who really talks about the EXACT results achieved from a specific innovation for instance? We might get financial numbers, we will get lots ot “hype” but we never get the recognition, that transforming validation of this success, maybe in rare cases. Why is that?All we hear is just a general reference to it, to cloak innovation often in the ineffectiveness that lies within. We bundle up our innovation activity, we cloak it in mystery, we fail to draw it out and give it the credit it is often due to our growth strategy. We rarely encourage it and give it the real recognition it deserves but we constantly “simply” talk about our innovation success.

I think innovation should be central to any events involving results and predicted future. Knowing the innovation capability is knowing the changes to a better future and shareholders are denied that. Do we have any clarity on innovation processes, are they sustaining or one-off, do we know the investment being made in building individuals innovation value. Do we break out innovation investments in capability, capacity or competence management. We should, as innovation grows a company, it is a major indicator of future success. It needs more “cutting open” and revealing, as “our” innovation management process.

For innovation and many things going on within organizations they often lack a real coherence, they ‘signal’ inconsistent behaviors, especially within the organization. These bad signals simply build up all the tensions and dysfunctional aspects that middle order management and the organization, in general, has to mop up and cope with.

How can innovation thrive in this sort of chaotic mess? No wonder it never takes hold, it just has nothing ‘permanent’ to attach too and grow. Management needs a radical overhaul so innovation can be the vehicle for what is articulated but often poorly delivered on a consistent basis.

Context & Coordination needs designing in purposefully.
Again, where do we start? We start with ‘disconnect’ that organizations often have. As we “cut through” the problems we need to take the different strands and piece them together. To make fresh knots to make a different strength. The understanding of the underlying purpose of the organization going beyond just making money and keeping the shareholders happy is that it does need a deeper primary function, it needs re-articulating, it needs constructing a new entity. Some organizations do a reasonable job of this but many simply don’t.

We need to restate our primary function and purpose far more in its societal contribution. We need to express the bounds as a governing set of principles that are known, reinforced and measured against. We then need to set about building in a consistent way, the capabilities that are able to produce the outcomes. Those new outcomes need innovative thinking to be central to them.

We need to build in the accountability into the roles that reflect that need to combine innovation, effectiveness, and efficiency, that is needed so they can be managed equally side by side. We need to teach the ability to be adaptable and recognize the differences so as to actively manage the ‘creative’ conflicts and tensions.

Innovation can help in cutting through existing “knotty” problems by searching for new strands that give fresh opportunity to be tied together and build strength beyond the existing. We need to cut through old knots but, yes, make new ones that form around some of the old and plenty of the new, “weaved” into them, to give them a greater strength of purpose and ability to take on new “knotty” problems, in different innovative ways.

The post The legend of the Gordian Knot and today’s organizations knotty problems first appeared on Building Your Innovation & Ecosystem Intelligence.

Let me provide a short narrative to give this a meaning and why it is becoming so important

Today we deliver content- It has become far too easy. We are drowning in it on a daily basis. We all suffer a massive deluge of digital input. Content can’t stand alone.

• What we need is context to anchor content and give it the clear meaning to understand………..that’s our necessary starting point.
  

Context shifts everything, it gives it shape, a structure to draw (deeper) meaning from. We learn to know, to integrate, to remember, to understand and to act.

Of course, context is going to be fluid as it builds out its related content.

Having content and context is complementary, interconnected, and interdependent, they interrelate to one another.

As we gain more insights we can potentially build a greater understanding. We simply improve our knowledge.

It is going to be needed to be adaptive as we learn but it will be placed in ‘certain bounds’. If we start from a much clearer starting base then the learning and discovery allow people to want to find solutions as they gain increased knowledge and provide fresh inputs, they begin to strongly relate. We pass through memory understanding as we learn.

“ Context provides the innovation marching orders” in my world

• We achieve a higher sensitivity to needs and understanding, we begin to relate
• We engage more, we can dialogue more, we ‘unite’ more in relating
• It adds more value to our thinking, it triggers additional ideas and contribution
• Functionality and Capability then follow from this- we build it differently

Context gives us certain guard rails or borders to help gain a more united focus. Where we go after that, by pushing those borders will depend on those involved, by us collectively seeing a greater value in an evolving context of mutual understanding.

• The ‘setting it in context’ allows for dialogue, adding more value to the thinking.

Context needs to also become, increasingly the arbitrator of success. Around this, you form your community that seeks out the possible solutions to this. Context gives knowledge into the hands of others to go and work on finding possible solutions.

• Knowing the context gives us something highly relevant to judge eventual outcomes on.

Q: How can we absorb and learn differently?

• We are overwhelmed by “content stock”
• We need to understand (increasingly) what is relevant to us
• How should we engage? What can make it easier?
• We need to build content creation for a context-specific world
• This needs to be increasingly tailored to our needs with help increasingly from (AI + Machine Learning)

Introducing the notion of Knowledge Graphs (KG) – its value and purpose

Here I wanted to give a deeper explanation of knowledge graphs- a ‘potted’ history and future view.

I wrote about Knowledge Graphs “The Arrival and Potential of Knowledge Graphs Into Our World” to give them a little depth of understanding.

So, my attempt here in this post is to give Knowledge Graphs a more ”layman” context so we can begin to see how this “Knowledge Graph” concept can become really important to recognize, support and apply in our lives. They help us relate faster.

KG will equally become a significant contributor to the industrial application as well, as increasingly it will build knowledge visually and be part of our everyday working life in related searches

I recently heard Knowledge Graphs will become as topical as “Artifical Intelligence” as a prediction for use in an industrial application.

We are told Artificial Intelligence is meant to be a panacea to solve all this current ‘disconnects’.  No, not without solutions like Knowledge Graphs alongside them, well actually underpinning much within AI

It is once we try to make all the ‘connects’ in the knowledge that is out there, waiting to form new relationships, we unleash our connected understanding in completely new ways……….we become more creative, informed and innovative….so let’s look at these a little more:

Knowledge Graphs captures the relationship between people, processes, applications, data- the things and their relationships

KG makes the connections for “contextual information”

• We need to stop stringing together to build a picture of things, piece by piece
• We need a way to bring together contextual knowledge in greater collective forms

Connecting knowledge is one of our biggest challenges today

The more you “see” within the relationships the better the insight, to influence decisions, to set actions and directions.

This leads to “cognitive solutions”

Let take an Example from  Google Search

Google pioneered or advanced Knowledge Graphs- “the information box on the right-hand side”

Examples “Google”:  “Bertrand Russell” or “the “Mona Lisa” or as shown here “Leonardo da Vinci”

• We are linking data and semantics (well-defined, related), easy to query and explore
• We are linking relevant information- (threads) which we can build and add too, in time (AI) smart. We are building dependencies of understanding (content and context)
• It integrates (over time) with machine learning
• Knowledge = Structured = Connected Relationships = Entities

Outcomes are represented in knowledge graphs (visuals)

This gives us data visualization, logical reasoning, it represents and presents knowledge

So why KG? It is becoming essential for Enterprises to link Knowledge and Intelligence

Today it is estimated 90% of enterprise data is unstructured, it is hidden in textual form (documents and files). What if?

• It Organizes and Distributes Structured Knowledge
• It has Openness, Transparency, and Accessibility
• It is Collaborative, a Sharing and Exchanging ‘mechanism’
• It is Enriching and Contextualized
• It ‘bridges’ Enterprise Knowledge needs with Open Knowledge Learning

The technical know-how lies within Siemens today and this has been my initial catalyst to understanding its value.

The outcomes are full of helping us get organized:

Ontologies, Common Language builder, Builds Schema, Common Descriptors, Vocabularies

Turning A Data Aware to a Knowledge Ecosystem, linking data, information, into knowledge and building on this

It is full of Entities and Relationships, it is dynamic and grows by you making the connections to constantly improve.

If organized differently:  it can create a better customer experience, greater efficiencies, increased insights for more connected products and services and understanding across the whole enterprise value chain, internally informed, externally communicated.

It can build upon those “keepers of specialized knowledge” driven by domain experts and business users that use their (growing) insights to increase connections and subsequent value generation.

Machine learning works at understanding dependencies so emerging from any learning you get a growing sense of intent, objective and those important aspects that you are wanting to find out more upon, to build out even further. The move from just “stringing data together” to build a picture of ‘things’ you get greater contextual knowledge.

It is this lack of connecting all of this knowledge up that is really placing demands on organizations that manage knowledge flow today, As we know it is often very inefficient to know where the knowledge actually lies.

As we digitally transform and improve the IoT through cognitive/ AI solutions we will automate and personalize communications. It is recognizing the semantic technologies part that will deliver cognitive solutions that have the real value.

This value can be built in very different ways than today with the use of Knowledge Graphs. It can have the incredible value of being driven by the domain experts and actual business users, as they make and use their knowledge to make the increased value of all the connections they have, increasingly in a growing network of relationships, constantly building a deeper domain knowledge.

It is a Learning Memory Builder

It gives us: What we know or need to know how we integrate, remember, to act and understand

• What is our challenge? (the need)
• The Suggested Solutions (the insights)
• Value Generation (empowered, equipped and enabled, to decide, to improve upon)

The promise of Knowledge Graphs allows for the collected data and the connections to provide insight, influence decisions and set direction. The more you “see” all the connections and relationships the greater these become, and then the better you become, in being “informed” to act in more knowledgeable ways.

The post So the value we can derive from using Knowledge Graphs first appeared on Building Your Innovation & Ecosystem Intelligence.

The lack of having a well mapped out customer journey means missing out on opportunities caused by not knowing this complete set of connections being made into you. By not knowing all these connecting points and drawing them together in a cohesive plan, there is a significant chance you are simply restricting the developing of innovation solutions that map back to all the decision-making that is going on in the customers’ minds.

This failure to optimize and seize upon all the possible options to connect with your customers is restricting your ability to broaden out your innovation solutions, making the journey more value creating, it certainly can be really holding your business back.

As you explore the digital transformation path this can become your best opportunity to connect along the total customer experience and see a greater return on this understanding and investment.

With the increasing need to adapt to a digital world, the essential need for understanding customer behaviors of those wanting to engage with your business or brand becomes even more of a challenge if you have not mapped this out. Also, how comfortable are you as new customers start connecting – can you have any certainty of the reasons why they did, what decided this and what might hold them for the future of a repeating business?

The vital map of the customer journey

A recent Altimeter report “the 2016 State of Digital Transformation” discusses these problems, along with many others. The mapping of the customer experience (CX) has become a top driver of digital transformation, yet only half of the companies studied have mapped or are mapping their customer’s journey. So that you are aware, the data and insights in this report are based on the input of more than 500 digital transformation strategists and executives who are leading change within their organizations.

In a good visual, they illustrate the severity of the digital transformation challenges: finding that 71% struggle to understand behaviours or impact of a new customer; 69% cited the lack of data or ROI to justify the value of data transformations; and 67% on the risk management, compliance and /or legal implications. Lacking the essential insights many companies are failing to grasp the potential, with many (alternative) innovation opportunities wasted and perhaps suffering a growing customers churn rate. Knowing the why of your customers is something that keeps many marketing and C-level executives up at night.

The good news is that although half of those surveyed are now mapping the customer experience journey most of these are only just doing this. Back in 2014 at the time of the last survey by Altimeter, only 25% of companies undergoing some form of digital transformation had mapped the customer journey, as now 88% cited CX as the driver of change and why technology was the necessary solution. There is some real catching up taking place to justify any transformation.

I still sense that it still seems IT & Marketing are not working on this together, there are separate initiatives and operating in their own silo’s, often in pursuit of different investment decisions that might be better served by combining forces.

As each organization changes in its modernization with new systems, models, processes and architectures it is this lack of customer-centricity that is a growing problem. The lack of a vital set of insights means the continued investment taking place in front-and-back-office solutions has this lack of the customers’ expectations, preferences and values clearly understood.

There is even more of a warning within the report

Traditional touchpoints, such as websites, contact centers, representatives, affiliates, etc., seem to not meet heightened expectations. In fact, they deter from what’s becoming an on-demand customer experience. Equally Mobile has given way to what Google refers to as “micro-moments,” and they are completely upending traditional customer journeys.

These mobile-first moments play out in common scenarios when someone is intent to do, buy, or learn something. As consumers increasingly use their phones to complete everyday activities, they’re fracturing the consumer journey into hundreds of new “micro” touchpoints where they seek real-time, mobile-optimized content, reviews, shared experiences, and direction online.

Despite all of this, just 20% of digital transformation leaders are studying the mobile customer journey and/or designing for real-time micro-moments in addition to customer journey work. There is a need to understand these ‘micro-moments’ as they increasingly impact on the customer decision-making, behaviors, and values.

The report warns even further: Mobile is just the beginning of disruption in the customer journey. With the runway for disruptive technologies still ahead (e.g., wearables, Internet of Things (IoT), artificial intelligence, virtual and augmented reality), companies will need a resilient infrastructure that adapts to not only mobile’s “micro-moments,” but also the impact of all these trends and new devices over time.

There is also a change taking place on the primary catalyst

While CX was initially the primary catalyst for digital transformation, innovation, agility, and the pursuit of digital relevance are the new factors driving companies along the maturity model. For executives and senior leadership, the need to accelerate innovation (81%) was at the top of the digital transformation agenda.

Right behind this was the need to modernize the IT infrastructure with increased agility, flexibility, management, and security (80%), and the third priority for enterprise transformation is improving operational agility to more rapidly adapt to change (79%).

Altimeter argues it is through these priorities, businesses are developing a roadmap that helps them compete for the present while building a next-generation business model to compete for the future.

For this report, Altimeter, a Prophet Company worked with Phronesis Partners to conduct a survey of 528 qualified digital transformation strategists and executives leading change within their companies. Respondents were from companies in varied industries, with more than 250 employees, in the United States, Canada, United Kingdom, France, and Germany.

In summary

As Altimeter state in their opener in this report and I repeat here in my closing:

“Digital Darwinism continues to impact businesses as technology and societies evolve. As a result, organizations are moving away from “business as usual” as they pursue digital transformation to compete”

We are all aware (or should be) that customers are increasingly choosing products and services based increasingly on the quality of the experiences they have with them. The pressing need is to address a competitive risk if you are not mapping and understanding the channels, touchpoints and shifts taking place in technology solutions that capture, evaluate and determine customer experience.

Are you meeting your customer needs, do you fully understand their motivations, associated behaviors to design a better range of innovation solutions?

Link to the Altimeter Report “The 2016 State of Digital Transformation”

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

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The post Mapping the customer journey is the top driver for digital transformation first appeared on Building Your Innovation & Ecosystem Intelligence.

So where were you when this Business Design Summit was happening for innovation convergence? Did you miss it? Well kick yourself if you are remotely interested in where innovation is evolving too. I missed going as it was a sell out fast but I watched the live streaming.

So I had a more detached view but let me give you the flavor of what is bubbling up around the Business Model and its Canvas where a new (and older) generation of innovation ‘tool-smiths’ are all converging in a growing community.

In Berlin, held at the Classic Remise Berlin on 19^th & 20^th April 2013, around 250 people gathered around the Business Model and started to bring together the converging aspects required in any Business Models design in tools, concepts, and methodologies.

Lucky for many that were unable to attend, the wonderful thing was that the summit also was live-streamed and had a dedicated hashtag of #bdsummit. I watched it and got very caught up in the event. They plan to release the presentations and I think a whole lot more from this summit in outcomes through most probably the toolbox center to build better Business Models.

This summit became the place of the innovation ‘tool-smiths’ to meet and exchange so as to begin the forging and crafting of the new tools needed for innovation. These are aimed to help us in todays and tomorrow’s world where innovation is more central within business strategic thinking.

Firstly, the Business Model meets one of today’s need

Unless you have lived under a rock, in a hermit’s cave or on a beach disconnected from the world, anyone remotely interested in innovation will have had business model innovation seared into their thinking.  Then you would be aware of the Business model canvas and the book “Business Model Generation” by Alex Osterwalder and Yves Pigneur and a core team of leading exponents, that included Alan Smith, Patrick van der Pij and Tim Clark and co-authored by 470 Business Model Canvas practitioners from 45 countries.

The Business Design Summits Objectives

The Business Design Summit had as its primary question: “Are the Business Tools you are using relevant for today’s world? It went on to ask “If you want to teach people a new way of thinking, don’t bother trying to teach them, instead, give them a tool, the use of which will lead to new ways of thinking”.

So this was a summit of different concepts, tools and a host of the forward thinking people within the world of innovation offering the parts that are converging. The different speakers offered a rich diversity of ideas, suggestions and examples to stimulate your thinking. Each speaker contributed a tool and suddenly we had born a whole new community of “tool-smiths” crafting away within innovation.

The speakers included at the Summit

These included Alex Osterwalder, Yves Pigneur, Patrick van der Pijl, Lisa Solomon, Lisa Chen, Luke Hohmann, Mark Johnson, Stefano Mastrogiacomo, Dave Grey, Karl Landart, Henry Chesbrough, Muki Hansteen-Izora , Steve Blank and Rita McGrath. Regretfully I missed one or two of the speakers as I got sidetracked within my day.

The visuals produced as these sessions developed were stunning.

Apart from Holger Nils Pohl working away, I think there were lots of visual and graphic recorders busy capturing what was presented in terrific event maps. Each of these contributed and made it a visual feast. These visuals significantly improve ways to teach. More and more in our daily work, visual thinking will play an increasing part on the new tools needed in understanding increasing complexity and being quickly able to visualize it in today’s world and become part of our tool box for determining the next steps.

Some “stand outs” that I gained

It is hard to suggest one part was better than another, it was this convergence that made the event come together but for me the timely reminder by Mark Johnson on the strategic importance of the jobs-to-be-done cannot be ever understated. Jobs-to-be-Done are central to arriving at the value proposition as they should “inform” on the needs of the customer that present the new innovation opportunities, perhaps also needing new business models.

The second was Luke Hohmann and his innovation games, something I will need to explore a whole lot more. His tag line of “The Seriously Fun Way to Do Work—Seriously”.  This offers online and in-person games to help organizations to solve problems across the enterprise by using collaborative play to tap into true innovation.

Lisa Solomon who did such a fantastic job of being a main facilitator to much of the summit. She introduced her forthcoming book around Strategic Conversations and spoke about her work and teaching around innovation, leadership and design.

Of course, Alex Osterwalder had his usual high octane mix of presenting, tweeting, facilitating, just physically driving the summit along. He must be shattered after events like this, energized for what’s ahead but drained in the immediate aftermath. He was everywhere, the Innovation puppet master pulling all the strings of a well orchestrated summit.

Yves Pigneur did such a great job, introducing the BM Canvas but also in both wrap ups of “three minutes” to summarize each of the days sessions. The way he did this has some real lessons on how to recall and conclude succinctly.

Dave Gray and his evolving cultural mapping tool is yet another topic I need to climb into more following this appetite teaser “as a tool, the hammer sees everything as a nail… culture itself is a tool” where he introduces the tool steps of Evidence, Levers, Values & Assumptions. This seems a more diagnostic tool and I feel will develop the more this is progressed, improved and used.

Then the whole topic of where large corporations need to fit into this business model movement with the challenges and emerging issues discussed by Karl Landart and Henry Chesbrough. This is where the Business model canvas has to deepen its presence. The Business Model Canvas has still not fully found its way into large corporate culture, certainly not easily into the boardrooms. Time, short attention span and limited patience are real constraints. Should it- certainly yes, how it is going to happen is a real challenge.

This whole area or corporate challenge needs some real intellectual capital in solving this as it is a necessity for BMC to really take hold in large corporations. By the way, this was the best presentation in my opinion I have heard from Henry Chesbrough and I was intrigued by his emerging thoughts on providing a Corporate Conflict Detector.

Muki Hansteen-Izora( @mukiz) of Intel talked through their internal tool, a first in a public forum, the Opportunity Identification Tool or Canvas- the opportunity space is bringing their perspective into a conversation, developing up the essential components, and getting these rooted and traceable.

The summit finished with a conversation between Steve Blank and Rita McGrath around “the end of competitive strategy” Both are real influences within innovation, firstly they talked through the new playbook for strategy and where so much is due to change. The sum of this was that Organizations are still awfully reluctant to give up power, we simply can’t continue as we are, as all our ground is eroding and that long term quest for finding sustainable competitive advantage is rapidly disappearing .

Transient short term competitive advantage is taking the place of sustainable competitive advantage. This will become a “big idea” and influence our future in how we set about dealing with this. Rita is about to launch her book around this whole area in the coming weeks and I feel will “rattle a few cages” in a few boardrooms, when they read it I suspect.

Steve worked his usual magic of weaving both the start-up and established organization into much of this conversation. He provided numerous examples, spoke of the different “epiphanies” he has had on his customer process and where the link comes together in his work and the Business Model Canvas. Always throwing in the amusing story but always underscoring a powerful learning outcome.

Between Rita and Steve there was such a wonderful conversation between two deeply experienced people, full of knowledge to share, stories to tell and ways to bring these together in practical ways that you could relate too.  A great, great finish.

Are tools or ideas enough?  The world is moving really fast

My growing concern is not the enormous energy being invested in new tools and methodologies; these are good, really good, my concern lies still in the iteration process. The issue is do we crowd source these more and more, with growing built in bias, to keep improving on them as soon as an idea hits us or do we slow them down from “just being put out there” (alpha versions) to being better “beta” versions? I’m not sure when the right time is to release tools.

We have to remember Alex’s original foundation for his Business model canvas was a PhD and that was incredibly well-grounded and why it has taken hold to such a level. Steve Blank’s customer work has integrated his enormous set of experiences and lots and lots of experimentation but that comes in a fairly unique package.

Just having tools for tools sake is not the ideal place to go but tools, well thought through, placed out in the broader community to be experimented with, reiterated and improved is highly valued and needed. Finding the balance is going to be the key from all these tool-smiths.

Congratulations to the organizers of this Summit  

The Business Design Summit brought together an enormously talented group- could it have looked out into the future more, could it have debated more instead of the “tried and tested” listen and group work? Perhaps not, the group needed to begin to work together, to find a greater common language. To have this streamed was incredible and valued by us that were not able to attend. I offered this tweet to Alex:

But I do have a “what if” as my wish?

We do need to plot all the tools into the Business Model Map so we can have a more comprehensive roadmap of what tool or methodology fits where and why. I’ve love that to emerge from this summit. We really need a “live” mashup of all that is going on in a “dynamic” business model canvas environment so a growing community can all provide the next generation. I think this is where the summit has begun to provide a real momentum – the shifts we need to make “to teach people a new way of thinking.”

The next summit will be tentatively in Berkeley late this year or sometime next year.

amended version 27th April 2013

The post The Business Model, a Canvas for Innovation Convergence first appeared on Building Your Innovation & Ecosystem Intelligence.