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Ten Types of InnovationLarry Keeley and others (2013)
Categorising innovation is rarely done, and leads to confusion and lack of focus. Keeley and his team have done a good job in capturing how the term ‘innovation’ can be applied across different areas of business, and how to make an effective impact. Keeley reminds the reader that innovation is more than just a brainstorm (usually just a collection of random ideas, sometimes also call a ‘thought shower’), and that focus and discipline are the keys to successful innovation.
Stranger than we can imagineJohn Higgs (2015)
Higgs acknowledges the challenge that he set himself to tell the story of the 20th century from something other than a geo-political perspective. He ambitiously sets out with an agenda for a century that includes “relativity, cubism, the Somme, quantum mechanics, the id, existentialism, Stalin, psychedelics, chaos mathematics and climate change”, while acknowledging this is only a Western perspective on the century. Higgs sets out to look for “what was genuinely new, unexpected and radical” without using the term ‘innovation’. In the century when WB Yeats’ poem ‘The Second Coming’ observed "Things fall apart; the centre cannot hold; Mere anarchy is loosed upon the world”, this book goes some way to discuss how the new ideas of the 20th century brought us to the world of today.
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The challenge of innovation within organisations (1)
Effectively incorporating innovation into an organisation is not trivial, and ‘innovation’ should not be looked upon as if it was seasoning that can be sprinkled over an organisation to revitalise it. This page and the next one draw on work from two different sources (Alex Osterwalder and Vijay Govindarajan) to show how organisations need to manage innovation to get most benefit from it.
The start-up phase.
Businesses are often created when an individual, or a small group, has an idea and a way to take it to market. They develop processes and systems to make this happen – sometimes these are adaptations of other processes, sometimes they are new. But the purpose is to get the idea converted into a profitable venture.
Over time, the company prospers and adapts the initial processes to cope with the market demands, but the processes and systems will be rooted in the original business model as the cost of changing them is not justified. Product development continues in an incremental manner to avoid disrupting the success of the business.
Inevitably, somebody will eventually ask if the company cannot innovate ‘better’ to look for future growth. Many researchers and authors (some of whom are quoted elsewhere on this web site) have explored the challenges that face companies that embark on an innovation journey, and they have documented successes and lessons.
Organising to innovate effectively
One of the clearest ways to understand the challenge of successful innovation may be found in the organisation chart used by Alex Osterwalder in blogs on the Strategyzer web site.
The experience of both Strategyzer, Vijay Govindarajan, and Grounded Innovation, is that it is important to make a clear distinction between near-term technology needs of a business, and long-term exploration of new business opportunities.
Osterwalder suggests that organisations might need to formalise this in a structure that has these as distinctly different roles. On the left, is the model for a sustainable and profitable business with a CTO managing the near-term product development work and working with the marketing and operational objectives of the business.
To the right, is a more venture-focused team under a ‘Chief Entrepreneur’ that has the objective of looking to the future, and undertaking innovation and exploration. These tasks clearly have different skill-sets from the normal business; being entrepreneurial means having to make judgements on new technology and risks over a timescale where uncertainty is going to be a major factor. They have to imagine how the business could operate in the future, and then strive to find solutions that are relevant.
The role of the Chief Internal Ambassador allows both parts of the business to focus on their work without having to compromise in their objectives, while also providing a clear route for effective communication and adherence to corporate objectives.
The commitment
For many businesses, the commitment and investment in an internal Entrepreneur team is too expensive and risky, so consultants are often used for this task as the skills are not always seen as necessary for the long-haul in businesses.
The drawback comes in finding consultants that can deliver what the business needs. Some consultancies have built strong reputations on insightful processes that turn out to be inappropriate in the long term. Finding a consultancy that will work with your company to deliver a solution that is tailor-made and relevant to your business can be difficult – but like many decisions, is important.
Not only is the Entrepreneurial side of a business managing risk and uncertainty for the ideas it considers, it will also face scrutiny for delivering value to the business. Osterwalder makes the point that metrics are necessary to demonstrate success, and there has to be commitment to persevere. Otherwise, when costs are under scrutiny, the Entrepreneurial venture will be a target for cost-savings and the innovation journey will come to an end for the business.
More details on the Strategyzer model may be found at this link. Osterwalder illustrates the need to keep a distance between the operational side of the organisation, and the innovation-directed side. The role of Ambassador ensures good communication across the business. Vijay Govindarajan’s Three Box Model examines this critical need for separation and the strategic issues for organisations that need to incorporate innovation into their business. This is explored in more detail in the next page.
