Innovating To Win

Innovation With A Little Help From Your Friends

Community and Web 2.0 continue to be a recurrent theme in many of the conversations I have with innovation leaders.  Helping innovation workers leverage each other is extremely important.  The value of intellectual assets within most companies is largely untapped.  Designers and engineers need better connectivity to the knowledge that will speed them toward value creating innovations.

In many organizations, the response to this need is to create internal innovation networks.  Often ad hoc in nature, the success of these networks has been spotty.  Even so, participants are often very excited because even a drop of water is joyous to the parched soul.  Information technology can help add significant value to the internal information network, but care must be taken in understanding what needs must be met.

Traditional knowledge management initiatives are broadly viewed as having failed to deliver the goods when it comes to innovation.  IT groups have, in good faith, built impressive infrastructures for knowledge management; yet, workers are still frustrated by an inability to get at information effectively when they need it.  This is large because the traditional approach builds the access paradigm on models of physical data deployment and arbitrary taxonomy rather that the mental models of access held by knowledge consumers.

Information becomes actionable knowledge only when it is delivered to the knowledge worker when it is needed, in the form it is needed, and in the context of the knowledge worker job.  Once the knowledge management system requires the worker to leave their work paradigm and adapt to the model of the data delivery system, the effectiveness of the system is severely undermined.

So, what is to be done to empower innovation practitioners to connect with knowledge and each other?  Here are a few tips to answer the question.

1. Build knowledge management structures around the jobs and thought models of the workers

2. Provide active concept delivery systems – toss out the old and failed search metaphor – anticipate knowledge needs and integrate concept delivery seamlessly into the innovation workers tasks

3. Think Passive – build an internal innovation network, but don’t be satisfied with an approach that requires workers to actively look for help.  Make sure your network is designed to reach out to workers and connect them not just to knowledge but also to each other.

The theme here is simple.  Innovation thrives when the innovation workers are enabled through knowledge and community connections.  But, these facilities must be provided in a way that support the work of these designers and engineers, and not one that adds more hurdles.

More Of The Same Is Not The Same – It’s Innovation

A cool breeze brings welcome relief on a sweltering summer day.  A tornado leaves death and destruction in its wake.

I see more and more companies struggling to cope with the rapidly changing financial climate.  Take the manufacturing sector for example.  Credit has long been the life blood of the sector.  But suddenly, the rules of the game are different.  How does a business that has been dependent of credit for significant capital investments continue to move ahead when credit dries up?

One traditional refuge has been the incremental cost reduction program.  But, small reductions in cost aren’t sufficient in today’s climate.  Typically, it’s not too difficult to find a way to find a five percent cost reduction.  However, it is an entirely different story when the R&D head is asked to find cost savings of 35-40%.  Such steep reductions in cost are no longer the realm of incremental engineering.  Achieving today’s aggressive requirements demands radical product change strategies.  This is the domain of innovation.

If you already have built a high performance innovation culture, then your engineers are already in the practice of considering every incremental engineering project as an opportunity to apply innovation best practices and create new value.  However if your organization is like most, this concept may still sound foreign.  No one can afford the luxury of this ignorance now.

The rules of the game are changing.  Yesterday’s solutions are an inadequate response to the new challenges we face. Companies must innovate in order to survive and thrive.  Take control of your destiny and change the rules.

Field Notes – January 2009

Companies globally are assessing their futures even as Obama takes the reins in the US.  Economic forecasts are all over the map.  Optimists are those that predict rough time through the third calendar quarter of 2009; pessimists are looking for three to five years of difficult economic challenges.

Against this backdrop, organizations are thinking about the tools at their disposal to survive and hopefully thrive in these times.  Innovation is viewed as one of the tools being evaluated.  While some companies are looking at pulling back on innovation, many more companies are saying the innovation is even more vital to their go forward strategy than ever before.  In some cases, these innovation forward companies are coming from unexpected arenas.

The automotive segment is one of the hardest hit in the current economic storm.  New cars sales are sharply down.  Automotive companies are suffering tremendously.  Even Toyota is cutting personnel for the first time in response to the pressure.  Yet despite these trends, I have seen some promising signs coming out of the tier-1 automotive suppliers.

In Germany, one tier-1 supplier has recently made a significant investment in expanding its innovation technology deployment.  What’s behind this commitment to innovation?  As internal sources put it, in these difficult times, they “have to innovate.”  Simply doing the same thing will not be sufficient to survive in the new economic climate.

In Japan, we can see a similar phenomenon.  A leading automotive supplier is actively reallocating investments from production engineering (customizing part for each manufacturer) to high-value research and development projects.  Their thinking echoes the sentiments of their German counterpart.  As the industry contracts and consolidates, they can’t continue to deliver the same old products.  They must look to radical strategies to drive revenue in the coming years.

There is a valuable lesson for us in these two examples.  Don’t wait for your company to be faced with the crushing pressure that the automotive players are facing.  Get ahead of the curve and be proactive about using innovation to chart a course through the troubled waters ahead.

Innovation Directions 2009 – What You Said

The year is still young, and the flow of economic news keeps providing new challenges every day.  Innovation is the elixir that will keep the pulse of business strong.  But how will that innovation manifest itself?  This was the topic of our most recent Innovating To Win poll, and here are the results.

Caution seems to be the order of the day.  Only 14.3% of you indicated that your corporate strategy includes a radical departure from your current core business strategy.  While product line extension is something that is in the plans of organizations by a three to one margin.

Hopefully, these organizations realize that good, sustainable innovation practice is doubly important in these scenarios.  When you are reliant on fishing close to shore for growth and not looking for any blue ocean opportunities, it is vital to ensure that these efforts produce true and sustainable differentiation.  This is exactly what adherence to innovation best practices will deliver.

If our previous poll on innovation investment plans is a barometer, there is some reason for optimism.  In that poll, almost half (47.4%) of you indicated that your companies are increasing investment in innovation and 21.1% stated their companies are maintaining their current levels of innovation investment.  This suggests that innovation will be alive and well in this difficult climate.

Once again, your participation in the innovation poll has provided an interesting picture of the state of innovation.  Please remember to vote in the latest poll on Obama’s innovation agenda.

2009 Innovation Direction Poll Closing Soon

Our informal poll on innovation directions for 2009 closes this Friday.

What types of innovation initiatives do you think will be important to your organization's strategy for driving success in these challenging times?  Will your organization be focusing on an incremental improvement strategy?  Perhaps, you think new whitespace is the arena of activity for 2009.  Or maybe, you are setting your sights on being a market disruptor.

Whatever the case is at your organization, don’t miss this opportunity to make your voice heard and help paint the picture of innovation in 2009.

If you haven’t cast your vote yet, you better hurry!  You can cast your vote using the Vizu poll widget in the side bar on the left.

A new poll will start on Monday, January 19th.

Innovation Goals – Brass Ring or Fool’s Gold

Reading Seth Godin’s observation on goals, I had to smile.  In a few words, Seth captured a key paradox of innovation.  We want the freedom to think expansively and discover unexpected value, yet we want to know that our investments in innovation will be aligned with our mission and yield a high return.

Many innovation practitioners eschew the interference of such things as goals and objectives.  The reasoning tends to be that goals create constraints to the innovative process and that the innovator must be free to explore any avenue in order to find the best opportunities.  But this viewpoint is not supported by practice and experience.

As Seth points out, “the people who get things done, who lead, who grow and who make an impact… those people have goals.”  You don’t have to look far to see shining examples of this around us.  Edison was very goal driven.  Would we have put men on the moon if the goal had not been given a voice?  Rather than constraining our vision, goals provide a lens that brings clarity to our view of the innovation landscape.  Things that were fuzzy, liminal, and beyond our reach come into sharp focus and become distinct possibilities.

One of the first steps to breaking the shackles of accidental innovation practice is the acceptance that innovation both can and should be directed by goals and objectives that provide the clarity of vision to help us find high value innovations.  When an organization starts to realign its thinking and believe that value creation through innovation must be a part of everything it does the seeds of a healthy and sustainable innovation culture can take root.

Once More on Innovation Versus Transformation

If Bruce Nussbaum’s recent posts on the death of innovation have done nothing else, they have generated a lot of reactions in the blogosphere.  Although that inner voice is shouting “Enough already!”, I can’t resist making one more comment on the subject.

There have been some very nice pieces written on this topic in past two weeks.  You can find some great examples of these at CounterNotions, Fleishman-Hillard Innovation, and here (of course!).  In Kathie Thomas’ post (Fleishman-Hillard), she referenced a passage from Bruce’s arguments for transformation that I found particularly amusing.  The passage reads:

"Innovation" implies changing what is. "Transformation" implies creating what's new. That's what we need today, a huge amount of totally "new."

Well Bruce, let me help you out.  Let’s crack open the dictionary and see what we find.  Hmm… Oh yes, here we go.

in•no•va•tion   \i-nə-vā-shən\ noun
1 : the introduction of something new
2 : a new idea, method, or device : novelty

trans•for•ma•tion   \tran(t)s-fər-mā-shən, -fȯr-\ noun
1: an act, process, or instance of transforming or being transformed
2: false hair worn especially by a woman to replace or supplement natural hair
3 a (1): the operation of changing (as by rotation or mapping) one configuration or expression into another in accordance with a mathematical rule ; especially : a change of variables or coordinates in which a function of new variables or coordinates is substituted for each original variable or coordinate (2): the formula that effects a transformation b: function 5a c: an operation that converts (as by insertion, deletion, or permutation) one grammatical string (as a sentence) into another ; also : a formal statement of such an operation
4: genetic modification of a bacterium by incorporation of free DNA from another bacterial cell; also : genetic modification of a cell by the uptake and incorporation of exogenous DNA

As you can see, Bruce, you have simply got your definitions backward.  Innovation is the creation of something new; transformation is the act of changing something in to a different state which may or may not represent something new.  If “totally new” is your prescription, then innovation is the cure for what ails you.

Meanwhile, the EU has pronounced 2009 to be the Year of Creativity and Innovation.

Enough said?

[Definitions excerpted from Merriam-Webster Online]

Is Innovation Dead? Hardly!

Well, Bruce Nussbaum of BusinessWeek appears to be in the process of rather firmly lodging his foot in his mouth.  In two recent posts on NussbaumOnDesign, Bruce has declared that innovation is a notion that has been hyped to death and that the new emphasis should be on transformation.  In ‘"Innovation" is Dead. Herald The Birth of "Transformation" as The Key Concept for 2009’, Bruce makes a case for why the concept of innovation is dead and presents the notion that transformation is more meaningful in the current climate.  He further expounds on the topic of transformation in ‘The Transformation Conversation: Is "Transformation" a Better Concept Than "Innovation" to Guide us Forward?’

With all due respect to Bruce, these arguments are a steaming pile of thinly considered pontification.

It can certainly be said that many terms come into the limelight and become the center of popular dialogue from time to time.  While most of these topics come and then fade into obscurity, innovation is one topic that has a history of becoming a focal point of conversation on a regular basis.  This is because innovation is all about the creation and delivery of value, and as such innovation is a timely basic theme for business.

It is for this reason that contrary to Bruce’s pronouncements, companies that are serious about creating new value, monetizing new opportunities, and thriving in times of great challenge and shifting climates are redoubling their focus on their innovation agenda.  Transformation is a term that can be used to describe some possible outcomes of innovation.  However, it is too narrow to capture the full scope of the possibilities available to agile companies.

Sure, companies that like to make noise publicly about the great things they are doing, but that really just want to feel good about not doing anything are always looking for a new buzz word to toss around.  But organizations that are serious about being the leaders in their spaces are not concerned with trying to find new ways to talk the talk.  These leading companies are always focused on walking the walk of value creation, of continuous redefinition of the rules of the game, of high-performance innovation. 

As to the laggard companies, they should make 2009 the year they stop talking about innovation and start operationalizing it.