Whenever I get into conversations about innovating, we always hit difficulties on the question, “how can I build this well and be sustainble?” Hence, I often try to build an extended narrative for what makes up the innovation capability building and understanding for the future. I frame this as the linkages of innovation purpose.
This opening narrative becomes increasingly important when you argue the move from our present way of thinking and building innovation systems, often linear and spread across different teams and islands of internal knowledge. into future ones built far more around innovation ecosystems in thinking and design that are integrated and connected, to open up conversations and exchanges, seeking common points of value in a broader network of solution providers.
I outlined in a post in May 2022, “linking sense of innovating purpose“, my ten points of linkage need, and I want to build on this further here in some explanations for each of the linkages..
I want to go deeper into these ten linking parts, breaking them down a little further.
We have to recognize the building blocks of any innovative design, and we tend to look at the more traditional ones of having a strategy for innovation, building a culture and environment, establishing a process and governance etc., etc.
Linking the parts and recognizing their contribution gives innovation a structure that gives organizational substance and required focus to support the different parts.
Before I get into the linkages for innovating purposes, the other concept that can accelerate and advance understanding of the question “what makes up innovation?” Jeffrey Philips and I built the Executive Innovation Work Mat. We put this concept to practice in opening dialogues or questions about the different thinking needed for innovation. This “work mat” gives a solid design for discussions and recognition. There are many posts on this site related to the “work mat”, but to kick off for those curious, I would suggest this one “Building the use of the innovation work mat as a compelling business case”.
Jeffrey and I completed a whole video series on the work mat late last year, found on youtube, but this gives you a specific link to one of the final conversations that can take you into the series.
Within this present post, let’s get back to deepening linkage needs.
My ten points of innovating linkage are building out on innovation capital, innovation infrastructure, knowledge management, intellectual capital, and different horizontal planning, which are increasingly recognizing the needs for asset orchestration, dynamic capabilities, the multiplicity of investment, set against value creation principles and abilities to evaluate different business model innovations.
– Innovation capital is the core sum of all abilities to harness all capital needed. The classic combination of physical capital, knowledge capital and human capital. McKinsey, see the breakdown emphasis as 16% on physical, Knowledge Capital at 60%, and Human Capital at 24%. The make-up of this builds over time with continued investment in competencies, generating value awareness, developing creative idea creation competencies, constantly exploring new knowledge and exploring new future value creation. Innovation needs to be recognized as having a central wealth-creating and generation role. A consistent emphasis on learning continuously, encouraging experimentation, exploration and reconfiguring make it highly dynamic.
–Innovation infrastructure is progressively made up of software, design, market research, training and education, capturing thinking in established business processes and structures that are open and accessible. You need to build up or lock in science, technology and engineering, building out technologies and communities and establishing different networks and ecosystems that combine these with designers, entrepreneurs and customer engagements. A design must account for assets building, capabilities and processes that evolve and contract, as and where necessary.
–Knowledge Management must be specifically designed for acquisition, creation, dissemination and utilization. The design has to be highly absorptive to build out a diversity of networks, anchor understanding, capture and then diffuse this widely across the organisation and partners. Communities of practice and common platforms are necessary to build out the taxonomy of innovation. You place a genuine premium on the learning capital. Collective intelligence needs to reside for new paths, new possibilities and better future results by which a large group of individuals gather and share their knowledge, data and skills to solve complex and challenging issues.
–Intellectual Capitals. For many years intellectual capital has been argued to be central to innovation. Organizations need to know where their intellectual capital resides and begin to constantly experiment, working on bundling out continuously these different unique assets to build, support and grow. The three essential capitals of Human Capital provide the triggers to intellectual agility and attitudes, the ability to apply synergies governed by motivation and the ability to absorb and translate new thoughts into tangible new insights of value. Relational capital is social, collaborative, and network-orientated and Structural capital offers the skeleton and glue in philosophies, processes, routines, infrastructure and culture.
–Different horizon planning through managing across the three horizon methodology. We need to plan in different horizons, to assign and think in different ways to sketch out the future sustaining pathway to meet the three different voices we need to combine of articulating and maintaining today’s business, as well as adjusting the business of today to the immediate future by exploring and improving on the existing, and the longer-term sustaining one. Each voice or focus will offer a very different future from today, and we need to plan for and build the capabilities out today in different ways to lead us to this future.
The recognition of the building out of these is essential.
–Firstly, the building out in asset orchestration. Assets are both dynamic and repeating in need. They need to work between simple interactions to complex ones. To achieve a configuration and deployment, we need to structure the portfolio of resources (not just those potential product/service solutions we manage in any innovation pipeline). The ability to bundle resources to keep building out new capabilities, dispensing with ones not relevant, and leverage capabilities internally and out in the marketplace to mobilize, coordinate and deploy in a very fluid way.
-In dynamic capability recognition. We need to have a constant “stock and flow” Also, you should read “Seeking out knowledge that flows”. Not wanting to repeat a previous post, I outlined nine steps in “understanding your innovation capabilities to make them more dynamic” I have developed a whole journey outline for innovation fitness dynamics. Building dynamic capabilities, capacities, and competencies that are aware, adaptive and fluid, are paramount for achieving innovative purposes.
–The multiplicity of Investments made or to be made. We must consider the need to transform our capabilities, to unlock, harness, release and build them out. We must integrate the many focal points of need within any innovation system. We need to recognize the unique mix of skills, insights and expertise to refocus the capital and resource needs. Innovation is not static, nor are its living parts. To gain an innovation coherency premium in design, you know what makes up your components to apply these to the challenge or complexity of innovation at hand or emerging. Much of our focus is on the need to focus on the “work to be done”.
As demand is more volatile, challenging and complex today, what becomes more important is the work to be done, not the work done; it needs to become the core of our focus. This can be explained as the work done is the accumulated knowledge, which has built up and been embodied in the firm’s results with the innovations achieved in the past and is seen as tangible capital. The work to be done is how well it can adapt to change as it generates the new.
Our linkage for innovation needs to achieve value creation principles and abilities to evaluate different business model innovations. (My ninth and tenth linkages)
–We need to build out the value creation principles. Good innovators always ask, “where does the actual value reside?” They take a wealth-generating perspective where they are constantly looking to combine and transform things differently. They investigate, explore and exploit, always searching for how to articulate the value and seeing the impact points. By recognizing all the other linkages outlined above, they can build an integrated value-creation framework. A narrative that builds out the value in design, architecture or solution route that seeks alignment to the Business Model Innovation or can articulate the proposition of the need to change and what that means. We must constantly build out the value creation story, draw others in, contribute, or support.
–Innovation proposals need to be delivered constantly through Business Model Innovation. Any new value-generating story needs sketching out of its design and parts. Knowing the Job-to-be-done, or the markets to be addressed, offers the underlying dynamics and shows the integrated design flow from the linkages discussed above. I provided a fairly detailed exploration of applying the innovation value proposition. I ended that post by stating, “By crafting a well-thought-through IVP for all its constituent parts, we are giving innovation a robust and dynamic framework to build out and point back as validation.” Business model investigation and evaluation become central to accelerating innovation and the solutions that can address the whole BM design.
Why do we need to understand the linking of innovation purpose better?
We must understand the potential change that innovation creates and anticipate the impact of the change on the two external constituents (customers and the market) and how those impacts may require or force change in the organizations themselves.
We certainly need better descriptions of innovation’s breadth, depth and scope to appreciate and understand its impacts on three principal constituents fully: the customers and prospects, competitors and industry, and finally, we as the innovators ourselves.
Until we understand innovation’s scope and integration needs, we can’t fully grasp the nature and amount of change that innovation can unleash. The linkages within any innovation purpose need a full understanding of their combined effect. We then, and only then, deliver a true sense of innovation purpose.
