GUEST POST from Paul Hobcraft

To achieve success you not only have to have a repeatable process but you have to ensure what is learnt ‘sticks’ so it can be used again and again.

The company we associate the most with when it comes to ‘sticky’ is 3M for its famous invention of ‘sticky notes’. They are used everywhere. Innovation needs more than a simple sticky note though

Motivational Glue leads to stickiness.

Besides ‘sticky’ we need something I’ll call motivational glue. A glue that binds between knowledge and learning to become a series of building blocks for innovation. These motivate us to keep thinking, pushing and developing our ideas into final products or services.

As you know innovation is made up of both tangibles and intangibles. Tangibles are more physical whereas intangibles are often our real hidden assets of knowledge, the intellectual assets that lie within our business. These can be made of firstly, databases, patents (assets that can be sold). Then there are, secondly, ones that can be separated out and sold or spun off (R&D labs, organizational processes). The third and the ones that hold the real huge promise for innovation success are the knowledge and skills within our people- that they alone own.

For many it is the combination of these three that makes up the new balance sheet of the organization- the real value definer, often hidden away and not appreciated for its immense value.

Think also the three capitals, our intangibles, which bind our organizational structures.

These are often discussed as the three capitals- human, structural and relationship/customer capitals. It is the investment made within these that really delivers the future value of an organization- these make up much of the unique competitive advantage they can differentiate one organization from another in its successful outputs.

These three capitals are the essential ingredients upon which an organization’s future success is built and this is why you need a ‘strong’ glue to keep them bound together- my motivational glue.

Within these different capitals lies a set of value streams that need gluing within organizations. These are how you manage the relationships (internal and external), how you attract, embed and diffuse knowledge, how your leadership sets about communicating its vision, its beliefs, its desires.

Then you have the make-up of the culture and its internal values, the reputation and trust an organization conveys, its processes and systems, its reach across different networks and lastly, its ways it sets about building the skills and competences. These make up in diverse ways the hidden value, the differentiators between one organization and another.

The motivational glue has learning as its base component

When we learn we are learning for the future. We need to gain skills in being adaptable, we need to learn from successes and failures and talk about them both and what we learnt. We need to know what skills will improve our performance, what attitudes and behaviours are the ones we can positively take forward and use time and again. The more we gather, absorb, explore and share, the more we advance.

Learning if it stands alone, then you are simply an island of knowledge that actually has little value in today’s world. It is the acting on your knowledge, as an innovation practitioner perhaps, that provides today’s real value. It is using your ‘know how’ to achieve effective action within groups, within your network, your team, your organization. It is making learning work. This is more today framed as social learning.

Social learning is becoming the essential ingredient in our glue today.

What I can see very quickly is how social learning is pivotal for developing going forward. In one article called: “A framework for social learning in the enterprise” by Harold Jarche (https://bit.ly/dlGKGA) he draws on his colleagues within this Alliance to put forward an excellent case for social learning.

He also provides a quote from George Siemens :

“There is a growing demand for the ability to connect to others. It is with each other that we can make sense, and this is social. Organizations, in order to function, need to encourage social exchanges and social learning due to faster rates of business and technological changes. Social experience is adaptive by nature and a social learning mindset enables better feedback on environmental changes back to the organization”

So for me learning, social learning, gives us our motivation- our glue for sustaining innovation.

Innovation is growing in its complexity. To keep pace we have to learn, we have to explore, to absorb and use our knowledge. The more we learn the more we offer value but we need to network and expand our relationships to make good use of this.

It may seem intangible to others but the more we use our learning, push our experiences and demonstrate these, the more this becomes tangible within ourselves and through this experience to others.

We are converting this into an asset that others will value. This becomes our innovating stickiness, the powerful building block for successful innovation to happen and provide our motivational glue to seek out experience repeatedly and offer real learning value to others.

Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

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GUEST POST from Paul Hobcraft

There are some huge shifts taking place across innovation activities. The simple fact that innovation has been thrown open and organizations and individuals can simply explore outside their existing paradigms is offering us something we have yet to fully grasp and leverage. This is a W-I-P for us all.

Secondly innovation is simply getting faster, better is another story, but it is expected to move from idea or concept to final launch in ever decreasing compressed time

As they say ‘you can’t have one without the other’. Open innovation is potentially allowing for this compression of time but where we still ‘lag’ is within our organizations to reap the rewards. Why? We are still stuck in the previous structures, systems and processes designed for internal developments that were designed for different times.

We need two really critical things really fast.

The speed of change needs agility. We need to learn to adapt, anticipate and lead change before change leads us. Building an agile company to manage the enormous unpredictability and creative destruction going on around us is an absolute must.

Secondly we need to recognize that the capabilities and skills needed to manage in this rapidly shifting world must be different from many we provide and train into our people today. We need more ‘dynamic capabilities’: the ability to understand what is needed and apply these capabilities to the challenges on hand.

The past has simply flashed before our eyes

When you stop and think, after you have captured your breath, just reflect on what has happened in the last thirty years of where we have placed our emphasis within innovation

Firstly we focused on efficiency through innovation, then we applied quality to the process, then we introduced flexibility (leaner supply chains, smarter product processes) and recently we have moved to a more open innovation. This rapid movement or compression of innovation has been demanding, many simply have not kept up, or simply never changed and faded away

What is the future in any innovation focus?

We have skirted design innovation, we still attempt to link product and service, we are building more stand alone business models and we are experimenting with social media that seems to becoming established as Social product innovation – the practice of leveraging Social Computing principles and technologies to support the product development process, innovation and business goals, programs and resources. We are also striving to manage collaborative platforms, so as to manage projects that offer scale and market shifting paradigms. There is a giant mash up going on or mess up perhaps?

Disruptive, Radical and Volatile seems a reality

We seem to be heading into a real storm of change. Change brought on by over consuming, disposing quickly and demanding even faster, better, more improved products at ever lowering prices. This is not just a race to the bottom where commoditization lurks but where we simply will exhaust our resources, our planet and ourselves. We are facing some very unsettling times and we need to get equipped to deal with them fast in agile ways through new capabilities and competencies.

There is a race we are all in where eventually no-one wins. We need to change the race.

We do need a ‘real’ paradigm shift.

The problem is nothing stops, it simply keeps moving at ever increasing pace. We can’t consolidate, we can’t experiment as much as we would like and we can’t wait and see. We are all learning by doing and to do this we need to be highly agile, amass new capabilities and competences as we go- often on the fly, often by the seat of our pants. Innovation has become our treadmill perhaps. Can we afford to get off? To make a real paradigm shift?

What would that be? Any thoughts?

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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

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GUEST POST from Paul Hobcraft

Innovation happens across time. We often constrain our innovation because we ‘shoe horn’ any conceptual thinking into a given time, usually the yearly budgetary plan seems to exercise a large influence in this constraining. We should make the case that different types of innovation operate and evolve over different time horizons.

I call this the innovation rates of exchange.

A little of the theory: Coherence between organizational context and coordination of outcomes is subject always to those natural tensions of planning, resource allocation and the time imposed. Often decisions have a real tension built into them and they ‘shear’ against the real forces in play. Like our tectonic plates ‘shear’ and cause earthquakes, the ‘shear’ effect has a disruptive influence on innovation outcomes.

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

It is such a pity the different time horizons for different types of innovation are not simply treatly differently in most organizations thinking and planning. We need to ‘account’ for innovation differently. This is where my suggestions around the three horizons can partly help, these I have extensively outlined in previous blogs to see the value of different mindsets for different horizon thinking.

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

Sometimes innovation cannot fit neatly within timing budgets, being assigned yearly targets and having tidy plans for allocating resources and expecting results. Innovation is simply messy; it does not often fit the norm of budgetary planning. There is a need to treat different levels of innovation differently. Incremental, Disruptive and Radical all have distinct characteristics that often don’t fit the norm in organizational mindsets to allow them to be worked through at their ‘right’ pace, we force them far to often.

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

1.Those innovations meeting given goals

These should be within specified period covered by a yearly plan and cover mostly incremental innovation.

2. Objectives that are more disruptive in nature

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

3. Ideals that offer Future Radical Promise

Unattainable within the usual time period, more longer term, but the progress is certainly possible during and after the period planned as they move from a weak signal or an apparitional point by probing and investigating over an extended period of time. As this flow of understanding gets translated into something more tangible, as the future simply ‘firms up’, it falls more naturally into what fits more in the longer term horizon perspective but still needs allocating resource within the planning cycle. Breaking down these into milestone achievements that fit more within traditional planning cycles would make sense.

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

The search for breakthroughs

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

Innovation has its own rhythm

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

Any coherency of innovations purpose, of what you want to achieve, and applying this in a rigid accountancy planned way does not work, unless you treat innovation differently in planning cycles and recognize these clear different horizons. Innovation operates through a different set of behaviors and also in its delivery commitment and purpose from ‘business as usual’, it is searching for “business not so usual’. This requires different mindsets at the C-level. They need to manage expectations of when the potential value being extracted is worth and be patient for achieving a far more impactful return on investment. Breakthroughs happen but usually with a lot of hard work and sense of commitment, even when you have set backs.

Different innovation requires different thinking and planning. It is these different ‘rates of exchange’ in understanding that need more understanding and perhaps by using the three time horizons framework it might give innovation a more appropriate context to plan them differently than present and permit more disruptive and radical breakthroughs to occur.

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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

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GUEST POST from Paul Hobcraft

Here is the first response to the Topic of the Month.

Economic growth is an outcome of the innovation trajectory we set. Today managing innovation is complex; often success is measured and valued by the creative destruction of others. The ability to ‘evolve’ is very determinant on the knowledge base, either within a given economy or within a ‘federation’ to bring together as something new, offering more value than what is on offer today.

Innovation is highly dynamic in its constant change but also in its needs of constant co-ordination of its parts.

Nations are Very Different

No one nation can just copy another, the same as one business entity cannot simply copy another, each has distinct characteristics, a history and a certain set of ‘physical’ boundaries on where it is located. Different cultures, different histories set each Nation apart. The main differences of Nations requiring to innovate they simply can’t migrate to another country or spread themselves around the globe to tap into the activities in these different places. Nations have to think differently, they are firmly anchored and the job of nations is to attract innovation activity so as to ‘create the right conditions’ and facilitate these as best they can, and work within the economic circumstances they find themselves within. They can’t escape but they can create the ‘right’ conditions.

The Value of the Innovation System

The innovation system operating within each country is made up of a set of resources, capabilities, technologies and institutions, all broadly conceived, that need to systematically contribute to the process of innovation. It is the way this is constructed in scope, scale and efficacy will largely determine the innovation prospects. Some countries have a well evolved (national) innovation system that devotes significant resources and knowledge to the system (such as the EU), others allow the market conditions to attract and generate innovation (perhaps the USA). The argument is if you have a good innovation system you get good innovation policies from this. I often wonder if this is really the case as policies, the world over, are governed not so much by common sense or allowing for market demands to dictate but are ‘interfered with’ by politics, by intervention that often distorts and puts markets out of good order. Decisions often made have knock-on effect that were not fully considered or simply ignored. So each nation makes its innovation system choices.

Capturing and Measuring the Innovation Activities

Innovation operates at the level of people, by firms and networks of firms learning to do new things. For them the mechanisms are the important enablers not the macroeconomic structures politicians often get caught up in. What allows competition to thrive, what needs to be in place to be within a cooperative system, where are the resources needed and the knowledge required to be accessed? It is the ability to create ‘value’ that will determine if one location over another is the appropriate place. Many nations focus hard on these factors, to ensure the set of activities needed to be undertaken by the firm can be achieved. If Nations are not focusing on this point they simply will lose the enterprise and all its surrounding knowledge to somewhere else. Sometimes Nations get lost in its statistics and measurements. It often forgets what often breakthrough innovation simply needs to thrive upon is a friendly set of conditions and encouragement to simply pursue around given ideas or thoughts-providing the right climate and nurturing culture to accommodate it.

Often Innovation National Structures Get Caught Up in Other People’s Business

Enterprises claim they welcome government involvement, but often they don’t when they see what comes with it in ‘red tape, bureaucracy, countless meetings and committees. Enterprises clearly differ in their innovation capabilities, some are minimally resourced, some are haphazard, highly entrepreneurial and opportunistic while others are highly organized and considerable resourced. How the innovation systems put in place to help in all the myriad variations can work is both demanding and difficult to balance.

Getting Out of the Way, or Placing Yourself in the Middle

The difficulty is where does a Nation wanting to promote, develop and protect its innovation base stand. Does it stay on the sidelines allowing the ‘dynamics’ of the market decide or does it wade right into the middle and swim alongside all the parties, accepting the rough and the smooth?

It comes back to the same problem “it all depends”. Today I think if Nations want to achieve superior innovation outcomes they need to ensure particular skills and practices are present, on their soil, to manage and navigate today’s world of highly uncertain, complex and highly distributed environments by crafting, and crafting really well, the mechanisms that enable this. I do not feel allowing innovation to simply flow is the right way, it needs deep understanding and often within National policies this is not the case.

Where government and its agencies can dramatically help is in providing instruments and ‘healthy’ funding options to promote and accelerate innovation and hopefully anchor it deeper into its society.

Often the Choice is Hard to Let Go Of

For me, the EU is not the ideal benchmark on how to set about innovation. It is overly structured, complicated and layered. In the EU, the 7th Innovation Research Framework attempts to put this all into place. Alongside its Competitiveness and Innovation Framework program these provide the overarching themes and objectives of where innovation will contribute in society. It funnels its considerable funds through either these programs or derivatives of these or bodies set up to focus and promote ‘given’ activity. It invests in partnership with regional development parties and offers structural funds yet still with all the hard work of streamlining its disbursement into ‘promising’ innovations it struggles to get that innovation momentum required. The structure itself has a maze that thousands are engaged in, to just pilot their projects through or offer their services to manage this activity to obtain funds or train you in its understanding. This set of activities, born out of necessity, offers no real added value and continues to depress and not progress innovation as the EU would like.

Taking this ‘highly structured’ route to innovation is not the right way. Innovation needs to be devolved as far down as it can go. The closer it gets to the actual needs of innovation, the better the delivery of resources, funds, structures etc. When the innovation is full of unknowns, completely new technology for instance, then the resource can be effectively channeled to the organizing structure to dispense more in the “R” of research than dispersing for the “D” in development.

Certainly Nations Need a Center of Innovation Knowledge and Expertise

In many countries this is ‘outsourced’ to think tanks, institutions, universities or simply review committees set up to advice government on policy. Often that advice is highly skewed to where the information is coming from. The value of innovation experts residing within a center of excellence can make a difference, it can reduce the risk of failure, improve the chances of pushing the emerging winners. This center can balance out much of the external, often highly biased thinking. This center can constantly raise the awareness for innovation and highlight the drivers, capabilities and resources needed for growth and wealth. These centers need to translate the needs of “the know-how and why” out into the market as opportunities to pursue. The market needs to determine, detect and explore these.

Proactive Innovation Needs to be Channeled Through Entrepreneurs

Innovation is considered one of the few proactive strategies available to promote wealth and growth. It does need organizing; it cannot be left to chance. It is working on the connectivity points; to reduce often abstract agenda’s and turn them into tangible opportunities. We need to make the approaches and thinking around innovation as coherent, accessible and open as possible.

At the heart of any future within innovation is the entrepreneur and the ability of nations to succeed in today’s environment of ‘stagnation’ is to provide the environment for these new entities and smaller ideas -rich ones to grow. Joseph Schumpeter talked about ‘creative destruction’ many years ago, back in 1942, that applies even more in today’s world. Creative destruction resulting from innovation and entrepreneurship is the force that creates sustainable long-term economic growth.

He concluded that radical innovation can lead to a better society but it is the way you interpret this will determine the winners from the losers. In Europe the entrepreneur exploits existing structures whereas that shinning beacon of entrepreneur activity lying in Silicon Valley and in a number of other innovation hot spots of the USA seem to have a greater appetite for radical change. This has its consequences and its attractions. Venture capital has its concentration in the US; failure is not only tolerated but talked about as a learning point, a certain badge of honor even. In much of the rest of the world failure is a heavy stigma that constrains and is often judged harshly by society.

The USA Has the Inbuilt Structure and Capabilities, Only if it Simply Would Realize It

If the US was to really extract and study its emerging innovation activity, that certain ‘collective learning curve’ often not captured and enhanced upon, it might realize it has its new launching point, to position itself even further as the vibrant ecosystem for innovation start up and acceleration.

It has most, if not all of the factors needed in place, it just needs a collective recognition of what it has, what it can provide and that is simply, going back to what America use to do best, to provide the best possible conditions to pioneer, to explore, to extract, to venture forth and simply innovate. It is through the recognition that the small business is the economic generator of jobs and through recognizing and then intensifying the factors that will allow entrepreneurship to flourish, that a path to growth can occur
The American dream is still caught up in the adventure, that pioneering need; innovation can certainly feed that ‘desire’. This time it is moving across the new innovation landscape or prairie, a global one, where entrepreneurs are free and able to roam that the US can grasp, as a nation and transform its economy back to an engine of value and real worth. To do this policy needs to ‘anchor’ everything that entrepreneurs require and seek to protect this by all the means possible, not in protective practices but in proactive practices and stimulus. Clear the current innovation ‘wood for the trees’ so it can then allow the emerging best to grow tall and give the new growth needed for the ‘ecosystem’ it will attract around it.

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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

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GUEST POST from Paul Hobcraft

By – Paul Hobcraft

Walking that narrow innovation pathway needs some rethinking.

“Innovation is the pathway to travel and seek out our future”

Today there is as much a gap between the aspiration to innovate and the ability to deliver on this. We still continue to ignore the constant suggestion that innovation should be systematic so the organization can provide some degree of reliability to innovate in a continuous fashion. We often allow the concept of ‘holistic’ to simply float over us and ignore the intimate connection between strategic thinking, innovation and their alignment. It is still sad we seem not to go beyond a certain point in our innovation thinking, it continues along a narrow path of limited understanding. Will it ever change?

I appreciate the statement, I think made by John Kao:

“Strategy is useless without innovation, innovation is directionless without strategy.”

Innovation can be strategies catalyst but is it still? I really do believe we need a new sense of the scale and scope of innovation; we do need to get a firmer grip on its complexities. I would certainly suggest we do need to align it far more to the organizations strategic imperative and recognize innovation’s role in this for this to be successful and to be repeatable. We must strive and push for more of a complete understanding of the innovation process to manage this thoroughly. Firstly innovation is never linear; it is iterative with lots of trial and error to learn from it.

Innovation leadership needs to step up to the plate and deliver.

Innovation leaders need to develop and execute an end-to-end innovation process that encourages discovery more, better screening and assessing earlier on to move discovery into exploration and concept generation that ‘fits’ with the strategy. The process today needs to manage ideas into conversion for profit and growth at increasing speed as well, it is demanded. Innovation is not an ad hoc process as many still see it, that eureka moment, innovation is a massively important strategic business process. We need to treat it as tackling an enterprise transformation designed to bring consistency into the thinking around innovation. It needs to cross functional boundaries, it has to transform current sub optimized silo’s that gets ‘richer’ through exchange, interface and learning from others and not dumped down as often is the case today. To make it work you need a common language and a common approach well understood by the innovation leader designated to deliver.

My last blog dealt with the new extended innovation funnel, with the argument that ideas that enter the internal organizations innovation process are actually in the middle of the process. Let me expand on this ‘extending’ a little more by discussing some of the parts of the innovation value chain that need to be thought through.

Extending innovations value – appreciating the whole system.

For me innovation needs to be treated more like a complete interlinked value chain. We must step back and see the whole value chain system for innovation. It constantly loops back and feeds back-in to add increasing value and experience. It has many connected parts that need to work together to deliver effectively and efficiently the new ideas and concepts being discovered through to final commercialization.

The innovation value chain needs the following, seemingly obvious often missed:

1. An established system that is clearly repeatable to ‘push’ innovation through constantly
2. It needs to be able to scale, scope and quickly adjust according to the concepts being pushed or even pulled through, often by spotting unmet customer needs.
3. It needs flexibility, resilience and adaptability that constantly adjusts and shaped accordingly and cannot be ‘fixed’, rigid and overly managed or controlled as many seem to try.
4. It needs to have break points for considering the innovation options- carry on, kill off, spin out, send back to rethink, to allow to grow at a different pace, to accelerate more.
5. It needs to ‘capture’ the collective learning and experiences constantly gained from the past and build those into improving the process for future activities
6. The people who have ‘oversight’ need to have some form of option resolution built in for deciding resources, directions, allocations and investments. They need that responsibility.
7. All innovation ideas and concepts entering the extended tunnel need to align to the strategic direction, compliment or extend onto the platforms you are providing (core, adjacent or new) and feed the portfolio’s that drive the businesses growth aspirations.
8. They must have a clear ‘fit’ within the strategy needs and be resourced well.

Designing the innovation pathway

To achieve increasing value in this, there is an innovation pathway you have to design and be ready to travel. It is highly dynamic and you, as the leader of the innovation activities, are required to constantly add the active innovation yeast by promoting the ‘fermentation’ needed for innovation to succeed, including:

1. Establishing and encouraging a robust set of innovation processes and technologies to support that constantly adapts and adjusts to the needs of the innovation concept, not the other way around.
2. The ability, energy and commitment to drive maturing ideas and concepts to realization.
3. Create a powerful desire and motivation to innovate by encouraging the environment of what you do makes a contribution to our future.
4. As ideas and concepts mature, you constantly build and restate the business case, again and again so it remains clear why this concept remains important.
5. You actively seek out the different and often diverse points of connectivity with all the stakeholders so they can engage, contribute and lend their support and commitment.
6. Constantly look for ways to empower individuals and groups to explore, challenge and improve constantly on what they know with what they need to find out and discover.
7. You have to work actively (hard) at clarifying constantly the links of the idea and concepts across the innovation process for all involved to stay committed to the ‘long run’ between idea to commercialization in times of uncertainty and flux.
8. Ensure you are actively working those networking, encouraging collaborating and building on the collective wisdom of many so that you are constantly exploring all the (emerging) options and expanding on the alternatives to extract maximum value.
9. Seek ways to always measure, evaluate and see return through progress and impact so everyone involved or viewing the efforts can constantly ‘see’ the value and where their contribution is helping, not simply once a year in those organized ways and events that fit the calendar or bean counter needs.
10. Strive for execution that builds from the best of the past by knowing what that is; remain open to what is all around you today in the wider world beyond your often more narrow confines and imagine what is really possible with that extra touch of imagination to ‘push’ by seeing beyond the knowns and traditionally accepted.

The concept-to-customer approach is an innovation pathway that constantly narrows down.

We do need a concept-to-customer approach across innovation. My 5C’s of capture, connect, convert, confirm and conclude shown in the extended innovation funnel can move this along.

Innovation is extremely strategic, it requires a more thoughtful understanding and we have to accommodate it within organizations by stating that it is often unpredictable, sometimes a chaotic process, it cannot be legislated or totally subscribed, thankfully certain significant parts can. It is by having this complete understanding of the entire innovation process so we can differentiate between the parts that can be made predictable and those that can’t. We can also constantly work at making innovation more predictable, in managing its many parts by making them more efficient and effective wherever possible. The more the deeper in innovation insight and understanding, the more we are adding to the internal knowledge. By often allowing for as much flexibility and adaptability for ideas and concepts as possible to ‘travel down’ and consistently improve the narrowing innovation path, the more it is likely to emerge as the right end-result.

As we progress from discovery to execution we need to offer more guidance and encouragement than prescriptive methods, currently prescribed and handed out in ad hoc doses. We DO need to understand innovation well. We then can manage our core well, expand into any adjacent spaces that strategically fit more comfortably and organize the associated activities to push the right innovation through a pipeline (depicted by the funnel in the previous blog). We will often have to go a lot nearer to the edge of uncertainly as we build this innovation path but knowing where these edges are is better than being constantly surprised. Innovation expertise inside an organization makes sound sense. Please see a previous post on some thoughts on this.

One last thing here, we must also rather surprisingly, reduce the many existing tools and processes we try to fit around innovation that ‘stress’ the existing core infrastructure but more on these in a further blog might be better.

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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

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GUEST POST from Paul Hobcraft

The ideas funnel has been with us a long time. We put our ideas into the funnel and then through a process of elimination out ‘pop’s’ finished products. Henry Chesbrough’s famous depiction of the Open Funnel has continued that concept, that ideas enter the more ‘open’ innovation process and go through a more ‘staged gate’ or equivalent process to emerge as the finished product or even spun-out- all well and good.

In the past few weeks the funnel has been constantly coming back in my life. It has been bugging me. Recently I was at a European Innovation Conference and we got into a roundtable discussion on managing ideas and up pop’s the fuzzy front end and the funnel and putting ideas through this. To be provocative I said “well ideas are actually in the middle of the innovation process” and we got into a significant debate on this and concluded that we all did not share a common language on this or understanding of what I was struggling to articulate.

So let me lay out my view. Firstly this was not as inspired as an insight I can fully lay claim too as mine. I had read somewhere this very point, ideas lie more in the middle of the innovation process but just could not remember where I had read it – grey cells are my excuse.

On my return from the conference and the catching up that always follows I have now sat down to investigate where I had read this. It was staring at me in my document file, Langdon Morris of Innovation Labs.

Langdon Morris and his book Permanent Innovation

Langdon Morris wrote an excellent book Permanent Innovation back in 2006. I thought the book was great, full of really useful and practical thoughts for anyone involved in innovation or wanting to understand it well. Langdon has just updated this book in 2011 under a creative commons license, with some rights reserved. You can download this book here.

In his author’s notes for the revised version he makes the following observation that made me (also) rethink the innovation funnel and process:

“The major improvement involves a common misperception. Many people believe (and I used to be one of them) that innovation starts with “ideas.” People, the common view holds, come up with ideas, and then they turn them into innovations. The managed innovation process was therefore assumed to begin with ideation.

In this way, the innovation process is inherently strategically aligned, risk-managed, and goal-directed. And as you undoubtedly noticed, ideation is definitely not the beginning, it’s the middle, and hence the need to revise the Permanent Innovation model to reflect this more accurate and more useful understanding.”

Jeffrey Phillips also then added his view for more thinking.

Then I get back and there is a great blog from Jeffrey Phillips on the innovation funnel here on Blogging Innovation called – Evolution of the Innovation Funnel.

Jeffrey comments:

“However, the funnel still seems too focused on ideas. Our suggested revision to the funnel is outlined below. This next iteration of the funnel incorporates opportunities, ideas, technologies and even products, considering “spin in” and “spin out”. Ultimately the funnel is a bridge between unmet customer needs and the solutions we offer. The funnel should consider far more than just ideas. After all, in an open innovation model, we can accept and exchange ideas, technologies or even products that may address a customer need or emerging opportunity. Limiting the funnel to ideas reduces its capability and power and creates a very limited metaphor for innovation teams”

He by the way, also offers a terrific slideshare as well on this. His view of the funnel was this:

So my three points seems to collide- a collision point I could not ignore.

So I firstly wanted to articulate my thoughts that I failed to do at the conference. Then as I got back into funnels and their ‘place’ in the innovation process I wanted to lay out my thinking.

Let me offer my thoughts on the insights, the suggestions and takeaways I have got from these colliding points.

I see this as the extended innovation funnel or alternative

I see the funnel differently. Initially my ‘flipping around’ was to get everyone quickly grasping a well established concept, the funnel, to see it in a new way. It partly worked in its central message of where ideas fit. Since I have now sat down I have moved from this and would like to offer this as my contribution to funnels, ideas and the extended innovation process. I think it reflects more of today’s realities:

Let me briefly explain this, it certainly takes clearly on board the correct view of Langdon Morris and builds from this in a more detailed way. Also Jeffrey Phillips prompts us all to move from ideas to concepts.

Let me briefly explain this model and its reasoning.

The evaluation of ideas is becoming more refined also before ‘it’ ever enters any ‘funnel’ or evaluation process. In many open innovation initiatives the bigger company is not looking for ideas, they are looking far more for at least partly ‘hard baked,’ or proven concepts, that they can quickly scale or ramped up. The concept of ‘just’ ideas is not a reality for many any more, they are to time consuming and costly in resources and energy. They want quicker answers in growth contributions from outside. Scaling up quickly to ‘grab’ the opportunity.

The larger organization involved in open innovation, or its search and relating of ideas are based more on a concept that has some proven value is changing open innovation.

These ‘ideas’ are exploring different connecting points across varied sources and collaborators. They go through a clear match in strategy, capability, cost, return and value in a risk assessment before and they might even loop back for further research, before they enter the internal innovation process of going through idea conversation to meet commercialization objectives. Then and only then, do you enter the more classic innovation process of converting, confirming and concluding concepts before entering the market place. This inside-out process follows each organizations established stage gate or criteria milestone system of checks to process these concepts through to commercialization, often called the process of innovation ‘attrition’ or validation.

There is much more to bringing in from outside-in with a high level of Business Development actions and then a more inside-to-outside development process to take it through or spin it back out. This whole process is so much more than the present concept that ‘just’ ideas enter the internal process, are ‘staged-gate or managed through the equivalent accepted internal process we seem to talk about today. Ideas are entering into this in a far more refined (defined) way than is often appreciated and these are far more in the middle of the whole innovation development process.

This for me is the new emerging funnel, the extended funnel that depicts more of the present practice surely? Do you agree?

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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

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GUEST POST from Paul Hobcraft

Challenging Our Future Thinking

by Paul Hobcraft

There needs to be this major shift from market-led to more socially-lead organizations occurring. We see pockets of this in a number of business organizations offering clearer governance and sustainability outlines as part of their annual reporting. We need to push them a lot harder. We need to move away from business- only innovation into society based.

The shifts taking place

Society has shifted, is shifting; the consumer is becoming the supplier of content, of meaning, of their taste preferences, their emotions and the goods and services they will buy. Mass consumption, the model honed in the 20th century doesn’t work anymore. Customers are actually saying “less choice, more say” and seeking deeper self-determination. This personalizing of preference can seem like more complexity for organizations but there are many ways to manage this but it requires real change in organizations, oriented to society more, serving them more.

The marketing thinking is in need of adapting also.

Consumers are searching for better well-being: through health and wellness, connectedness, personal growth and identity and control. Everything is coming more into a ‘context’ economy that places value on customization, adaptability and transformation with the overriding value statement of “what we will value as against what we consume”.

Social innovation becomes increasingly important within communities

Facing a fairly long period of economic restructuring in most developed economies, the consistent globalization of local jobs, rapid technology change, polarization of opinions we seemingly are all facing a world of great uncertainty and increasing complexity.

Our governments are searching for solutions. The premium seems to be centered on new knowledge acquisition to add jobs and promote new solutions to tackle unfamiliar or persistent problems within society. We seemingly can’t afford or tolerate in capital markets anything that seems inefficient, applying unsustainable practices or not innovating well.

Innovation based on social problems offers a real meaningful solution for us all. If we can harness the best ideas for emergent problems, explore these in timely fashion we can move beyond our existing crisis. We all searching for personal meaning and society does offer this really.

The four main areas that Social Innovation can address

1. Resolving the problems around our growing physical needs and limited resources (age, health, education)
2. The increasing need for a different type of skill and capability set that innovation seems to require and often we are not taught- in school, business or society
3. A major shift in care and service – serving the needs of others, communities and those actually close to us
4. Psychic needs – the recognition, increased understanding and care that cuts across our societies in so many different, often in bewildering ways.

Innovation is social, social is the new innovation

Social and interpersonal aspects (social media, networks, relationships) are aspects of innovation that are increasingly being recognizes and understood to being critical to the innovation process. The realization innovation needs people, everything else are enablers. People hold the key role in the innovation process as the creators and carriers of knowledge. They develop it, they translate it, and they consume it.

The increased art of collaboration and co-creation

Collaboration and co-creation is emerging that has the potential to provide those value creation points society requires. We need to learn how to cooperate. I was reading a book recently by Gaurave Bhalla called Collaboration and Co-creation: New platforms for Marketing and Innovation and he offers a simple but powerful framework – Listen-Engage-Respond.

Society that can be mobilized links the economic, social and environmental spheres; it can have a cumulative dynamic effect if we can harness it.

Pushing society to solve its growing problems needs to happen

We simply do have the capacity to solve our problems but it needs the combination of private, public, voluntary sectors, philanthropists, foundations and society to come together in different ways than we have seen in the past. That is why we are entering the era of societal innovation and we need to get business even more tuned in than ever. We need to develop a greater social and cultural lens to translate our concerns, fears and insecurities into beliefs, values and aspirations that offer a vibrant future. Innovation is now needed in all walks of life- this is our societal challenge.

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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

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GUEST POST from Paul Hobcraft

In the past few months I have been getting interested in GE and how it is managing innovation. Often you read a number of negative reports on GE but is this just the big guy being picked upon by more nimble observers that have a limited insight into what is going on behind the walls of GE?

What is under the innovation hood at GE?

There does seems an awful lot going on in GE around innovation on what we can observe from outside looking in. Of course you would expect this in an organization the size of GE employing 300,000 people across 100 countries and generating $150 billion dollars in revenue.

In Jeffrey Immelts (Chair and CEO) own words “the toughest years of my life were 2008 to 2009”.To drop 31 billion dollars in revenue in two years is tough to manage through, and to see net earnings drop by nearly $6 billion dollars in this period to where it is today, of $11.6 billion dollars, must have been very hard.

GE seems though on a path of recovery after these very tough years. Is innovation leading that recovery? It is hard to really tell from the outside, trying to read behind the hype as you can’t see so much under that innovation bonnet as you would ideally like. It needs greater transparency and ease of clarity, well certainly for me.

We see much activity outside-in but not enough of what is going on ‘inside’

Clearly the ‘flagship’ of innovation, publicity wise, has been the imagination themes for GE, with two stated growth pillars. These are open innovation activities for the outside –in. Let me summarize these:

The Ecomagination was GE’s open challenge commitment to imagine and build innovative solutions that solve today’s environmental challenges and benefit customers and society at large. There has been two ‘biggies’ in challenges that have opened up as a call to action from the outside of GE with the promise of the winner achieving a commercial relationship with GE and the “bait’ of having funds of $200 million as a capital pledge within this area to award. The two challenges so far have been “Powering the Grid” and presently “Powering your Home”.

The other open challenge is healthymagination. This is again an external idea challenge focusing on three critical criteria: lowering costs, touching more people and improving quality with the aim of providing 100 new innovations by 2015. Healthymagination is an investment by GE of $6 billion over six years to develop innovations that measurably improve quality, access and cost by up to 15% with a focus on lower-cost technology, more IT, expanding access, and consumer-driven health. There seems to be more winners in
this one.

These tell me that the innovation ideas are flowing into the organization and clearly swirling around being explored, evaluated and worked upon. I worry over the level of disappointment by the many that don’t get to the reward stage. How sustainable is this approach? Certainly it is fueling much to encourage more of these challenges but with a real need to increasingly establishing pathways for multiple winners either in commercial relationships with GE or directed to others to commercialize if GE decide not to. There must be some brilliant ideas that can’t simply fit within the ‘appetite’ of GE’s quest for innovations on a large scale, likely to be at least offering the potential of $1 billion annual sales.

Researching to understand innovation in the world

We also can see GE has been growing in its understanding of innovation in the outside world with GE releasing their first-of-its-kind “Global Innovation Barometer” at the end of January 2011. It is focusing on identifying the changing landscape for innovation in the 21st century.

This report follows a previous one that came out in July 2010 that was a European survey, again sponsored by GE, on the current barriers and the current state of innovation policies within the EU.

These tell me they are actively curious about the world of innovation.

The questions for me though are far more about the inside workings of GE for innovation?

The global research centers for GE provide some solid indicators of what research is being conducted. Research has been doubled in recent years and GE spends $4.4 billion on this area. By the way this sum is getting close to the magical figure of 3% of revenue that the EU wants each country in the EU to commit to innovation research to maintain and progress.

GE employees 3,000 technologists and they are promoting their Engineers and Scientists as the modern day “Edisons” and feature a different person each day to show who they are, and what they are working upon. Nice touch I feel, to get them to form as an innovation research community with a real face.

Corralling from the top the best and brightest

I also gather at the top they have a Corporate approach to corralling the top 100 big ideas as protected and guide these through the GE innovation pipeline, providing they keep hurdling the different ‘stage gates’ required to make progress through the system and the ones that don’t make it through the next gate get moved out the coral and others come in to inject fresh innovation ‘big growth blood stock’.

All these tell me that on innovation they indicate the huge strides GE are making for an organization to open up and make innovation as part of ‘coursing’ through the GE blood. Or does it? GE have opened up; they are certainly ‘open’ for external ideas (providing they are big enough to survive within GE) but what really is under the GE innovation bonnet within its culture to innovate? What makes the innovation activity tick, too promote it, to sustain it, to instill it in every persons thinking, working for GE?

So has transformation arrived or where are they on their innovation journey actually?

This is my difficulty to fully understand. Apart from the usual “innovation is a constant journey” stuff, I find the GE story is not so open for all to see on its journey point from what I can see. I’d love that to change to understand and value. We read governance reports, we get enthralled in big projects, we see the end result in new innovations but has the inside really changed or just added the outside-in?

There is a real pressing need for GE I can only assume it is grappling with. The fact the sums involved in often these ‘winner takes all’ imagination competitions must only give a limited ‘lift’ to GE more in the judging, evaluating and assessing of external ideas. This intensity of activities has the danger that it is only a short term effect on building an internal culture for innovation unless the benefits can be ‘touched and felt’ throughout the organization, not just simply read about, blogged with pride and interest.

The rules of innovation are changing at GE or are they?

Beth Comstock (SVP & CMO) has mentioned in recent interviews “the rules of innovation are changing”. She was talking far more admittedly about what GE have been learning through their market research and in these big engagements with the outside world. I am sure she is bringing that learning into the organization.

She also offers two other themes that resonated with me:“Doing well by doing good” and “Makes good in people’s lives”. Again these were more in the external context of where GE is heading. I would suggest this is equally where the inside should be going as well, making their lives feel good by given the chance to make their personal contribution to building a sustaining culture of innovation across GE.

For me, innovation should always have a social result, as it is first and foremost, a people engagement activity. It is not just a bottom line result, and I would feel running a challenge internally that uses those two themes might give such a personal identification and sense of engagement and significantly advance the adoption of innovation as part of the every day job.

How about an internal imagination challenge on similar scale to the others?

GE needs to translate this external engagement within perhaps a matching inside engagement. Something as highly visible and as big in its challenge: to transform the culture of GE to a lasting innovating one.

Perhaps an inner-imagination set of challenges, to embed a greater innovation culture more within GE. In other words they spend a similar appropriate sum of money internally but not for one ‘big’ idea but for the thousands of small ideas resident in the employee’s minds that effect their everyday work and then allow them the time to pull down the resources to translate them, wherever they reside, not just in the research lab, but across all 300,000 people working for GE. Let innovation cascade throughout the organization.

Most would compare equally with the existing healthymagination goals of reduce costs, increase access (to innovation), improve engagement and quality, and most importantly opening up minds, sparking conversations and exploring all the possibilities that innovation touches within an organization.

I quote from a recent article “the term innovation now acts as the proxy for strategic renewal and market disruption- what we really need is to uncloak it and recognize the breadth of change enterprises face”.

They always say the biggest challenge lies within, not just a reliance on simply bringing in the outside-in perspective, it can deflect from the potential that is within and also that can go more inside-out. Innovation is certainly changing and what it means, and how we are going to manage it going forward. GE needs a new inner culture to innovate far more, to manage greater growth ambitions across a complex array of business sectors tackling substantial societal problems , and to achieve this I’d like to see more openness under their innovation bonnet and have a fully visible commitment to changing the culture so it is made up of many innovators across the whole organization, not just selected parts of it. Now that is a big imagination challenge.

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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

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GUEST POST from Steve Todd

This is the second of several ‘Innovation Perspectives‘ articles we will publish this week from multiple authors to get different perspectives on ‘Thinking about the future: what big innovation do you expect within 10 years?’. Here is the next perspective in the series:

by Steve Todd

I believe that the biggest innovation coming in the next 10 years will be “how we relate to digital information”. If you believe this IDC report, the pace of digital information growth will not slow between now and 2020.

You can choose the bank that you put your money in, but do you know where the actual bits that represent your money are physically located? And do you know how well protected those bits actually are? If you did, would you choose to bank somewhere else? Does any of this matter?

How about the explosive amount of personal information you will be forced to administer? Where will you put all of your pictures, videos, and tax records? Will you have control over your health records? How can you effectively search your personal information to find what you are looking for? (hint: Google is not the answer)

Will corporations start tracking their information as a monetary asset? Will they be audited on where there information is and report on who has looked at it? Will they need to make sure that their digital bits never “cross the border” into another country?

Many different universities, corporations, and individuals are starting to suggest innovation in this interesting area. For example:

1. MIT Media Lab: Take a look at the information ecology group at the Media Lab, and read about the great ideas they come up with when considering ways to “connect our physical environments with information resources”. Perhaps my favorite is the proverbial wallet, which contains a hinge that tightens when the balance in your electronic bank account drops!
2. Corporate Intrapreneurs: some of the most interesting research on personal information search is occurring at EMC Research Beijing. These intrapreneurs have recognized that private, locally-owned personal information cannot be effectively searched using Google-style page rank algorithms. They are claiming that the best way to search vast amounts of information would be to use associative memory techniques. Read the paper to learn more.
3. High Profile Tech Bloggers: one of the top bloggers in the area of high-tech information is Chuck Hollis. He theorizes that information may become an asset like gold, or diamonds. The big difference, of course, is that we know the physical location of our gold and our diamonds, but not necessarily our information. We may see the rise of new, innovative tools that can be used by an informationist.

Over the next 10 years, the amount of innovation that will occur in the area of information management and interfaces will be huge. If you want to watch many of these innovations develop, consider subscribing to the MIT Media Lab RSS Feed.

You can check out all of the ‘Innovation Perspectives‘ articles from the different contributing authors on ‘Thinking about the future: what big innovation do you expect within 10 years?’ by clicking the link in this sentence.

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GUEST POST from Steve Todd

This is the ninth of several ‘Innovation Perspectives‘ articles we will publish this week from multiple authors to get different perspectives on ‘How should firms collaborate with customers and/or value chain partners to co-create new products and services?’. Here is the next perspective in the series:

by Steve Todd

Customer Innovation via Corporate Portals

“Innovate With Influence” provides several examples of how interaction with customers can result in breakthrough new ideas. The examples in the book, however, highlight customer engagements initiated by one person: the intrapreneur. While intrapreneurial intent is a valued trait, one intrapreneur can connect and interact with only so many customers.

What is also needed is a corporate mechanism for engaging, brainstorming, and co-creating with customers in a more scalable way.

At EMC Corporation, social media experts have created an online portal for that purpose. The portal can serve as a clearinghouse where customers and intrapreneurs can collaborate on the latest problems and technologies. The innovation portal is characterized by the following capabilities:

• One person runs the ship. A corporation needs a contact person who is the over-seer of customer/corporate innovation. For EMC’s portal that person is Dr. Burt Kaliski.
• Lectures by corporate intrapreneurs and customers are advertised regularly. These lectures enable live cross-talk and are downloadable after the fact. The lectures often cover strategic directions that are in the minds of customers and/or corporate intrapreneurs.
• Activity at global, corporate research centers is highlighted. This advertisement allows customers around the world to collaborate directly with local researchers on problems specific to their country or region (e.g. research centers in China and Cambridge).
• Recorded videos from intrapreneurs directly address important topics such as sustainability in engineering.
• Customers and partners are invited to directly participate in innovation contests and coding challenges.
• The results of internal corporate innovation conferences are publicly posted for perusal by customers.
• Early access (and support) to emerging technologies is shared with those customers that join the innovation portal.

Each of these areas is of course undergirded by social media capabilities such as comments and tagging.

Innovation portals are an excellent one-stop shop for bringing together customers and corporations for the purpose of co-creation.

You can check out all of the ‘Innovation Perspectives‘ articles from the different contributing authors on ‘How should firms collaborate with customers and/or value chain partners to co-create new products and services?’ by clicking the link in this sentence.

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