Nonlinear Thinking

A Night At the Opera

Not the Marx Brothers movie nor the classic album by Queen, I am referring to one of the coolest technology platforms and business models I have come across in a while.  Norway's Opera has just released their 10 Beta browser which advances further their agenda of defining and delivering on a ubiquitous platform for personal and professional computing.  Nothing is more exciting than seeing a company build a business model based on stretching the boundaries of what has come before.

Opera's vision is to deliver the best Internet experience on any device.  Opera's key business objective is to earn global leadership in the market for PC/desktops and embedded products.  Opera's main business strategy is to provide a browser that operates across devices, platforms and operating systems, and can deliver a faster, more stable and flexible Internet experience than its competitors.

To explore the full spectrum of what Opera has created, you can visit them at http://www.opera.com/

or check out this visual evocation of their One Web platform.

Challenges to World Class Innovation

Prophet is a global consultancy that helps senior marketers more effectively use branding, marketing and innovation to drive profitable growth.  Their 2008 Best Practices Study, “The Making of World-Class Innovators” outlined the continuing challenges that enterprises, and senior management, face when the need to innovate meets the challenge of change.

A variety of issues make tapping into innovation’s potential benefits problematic:

• While 70 percent of corporate leaders count innovation among their top three priorities for driving growth, 65% of them are not confident in their ability to execute.
• Senior executive satisfaction with returns on innovation is declining - to 46% in 2007 from 52% in 2006.
• Some 35 percent of global CEOs surveyed cite an “unsupportive climate and culture” as the greatest barrier to innovation.

The study uncovered some underlying principles from the best practices of firms that have come the furthest in meeting the innovation imperative:

1. Become a catalyst.  Inspire and engage others regardless of your role in the organization.
2. Get and stay connected.  An innovation ecosystem has no limits or borders, and is best built on the broadest possible base.  Internal and external networks of sources must be tapped and powered to unleash a rich flow of ideas.
3. Articulate your strategy.  Go beyond platitudes and buzzwords to ensure employees hear it and believe it - and understand how they’ve been empowered to live it.
4. Encourage teams to execute.  An empowered team will see the challenge through to completion when given the tools and the incentives to act.
5. “Test and learn” your promising innovations.  To innovate successfully requires acceptance that there’s more you don’t know than you do, and an openness to the risk that learning more may entail.

BCG's Innovation 2008

The Boston Consulting Group, in partnership with BusinessWeek, has released their fifth annual report on innovation, “Innovation 2008: Is the Tide Turning?” The report covers the entirety of the innovation processes that are critical to turning ideas into financial returns including idea generation, new product development, portfolio and life-cycle management, organizational alignment and demands on leaders.

As always, the BCG report provides some great insights on the state of innovation in business.  Key findings from the report include the following:

• Innovation remains at or near the top of most companies’ agendas, with the majority (66%) considering it one of their three most important strategic priorities.
• Fewer than half of executives (43%) are satisfied with the financial return on their investment in innovation.
• Rising dissatisfaction with the return on their investments in innovation may be taking a toll on companies’ willingness to spend
• Executives consider lengthy development times, a risk-averse corporate culture, difficulty selecting the right ideas to commercialize, and a lack of internal coordination to be the biggest factors driving down the return on innovation spending.
• For the second straight year, executives ranked Apple, Google and Toyota the world’s three most innovative companies, with Apple once again on top.
• Most companies have the means to greatly boost their return on innovation spending and, in the process, gain a decisive competitive advantage but few are acting with the commitment necessary to achieve that.

There is much excellent detail in the report supporting these observations. It is a bit discomforting that the reality or perception of innovation’s poor return on investment continues to be a mainstream meme.  The trend of the past few years showing continued erosion in satisfaction levels with the return on innovation combined with a deceleration in the rate of investment in innovation suggests that many companies are finding it difficult to establish sustainable innovation programs. 

On the other hand, it is good to see that innovation remains top of mind with companies, whatever the issues with measuring it’s success. With product and service life-cycles growing ever shorter and investments in human, intellectual and structural capital being constantly challenged by macro-economic drivers that are often out of their control, enterprises must invest more in innovation, not less.

Full of insight and some good charts, you can read the whole report here.

The Masters of Business Imagination

Jim Carroll appears to be on the warpath. He ardently believes that our traditional ways of thinking about business, and the skills that support that thinking, are obsolete.  To that end, he has created a manifesto for The Masters of Business Imagination aka The Masters of Business Innovation. I think it is both a fun and a smart read as he takes on the premise of our MBA-centric business environment by proposing that a new, forward-looking, innovative set of skills are needed for success in the emerging global economy.  In Jim's words:

Complacency in a time of rapid, disruptive change can be a death sentence - not only for organizations, but for the careers and skills of those who work there! 

It's time to abandon the thinking that has had you anchored firmly to the past - and to shift your focus to the future, with enthusiasm, motivation and imagination.

You can do this by abandoning any pretense that the skills of yesterday will be important tomorrow. Figuratively and literally, it is time to move beyond the thinking that has led us to a world of MBA's - Masters of Business Administration - and focus upon the critical skill that will take you into tomorrow.

The world doesn't need more administrators. It needs more MBI's - Masters of Business Imagination!

Carroll identifies the core attributes and attitudes which individuals awarded with the new degree should possess.  You can read his Masters of Business Innovation Outline document here and, in PDF form, here.

Changing the Architecture of Our Revenues

John Seely Brown has, for almost four decades, been one of information technologies' true visionaries.  A recent, fresh review of his 1997 compilation of articles by thought leaders of the day, Seeing Things Differently: Insights on Innovation, uncovered this prescient thought on business model innovation:

"To do things differently, we must learn to see things differently. Seeing differently means learning to question the conceptual lenses through which we view and frame the world, our businesses, our core competencies, our competitive advantage, and our business models... If there is anything actually coming into focus today, it is the realization that we need to question much of what we think we know about how to conduct commerce, including marketing, distribution, service and the notion of competition itself. Hardest of all, we need to be able to think about changing the architecture of our revenue streams, that is, the way we make money." 

Though published prior to the mainstreaming of the Internet revolution and the reordering of the cosmos, much of the book retains currency in this era of globalization, dynamic commerce ecosystems, social networks and on-demand delivery of services.

Advances in technology in general, and information-related technologies in particular, continue apace.  It can be difficult sometimes separating the real from the imagined, but for those enterprises that do not understand or, worse still, fail to embrace the changes/opportunities that are manifest in this environment, life can become brutal pretty quickly.  The quote above speaks to the importance of constantly assessing, testing, reframing and reinventing your business model.

The Desk of the Future

Walls are absolutely indispensable to the processes of brainstorming, strategy development, and innovation. If you are casting your conceptual net widely enough, it becomes extraordinarily difficult to organize all the issues and understand the linkages between and among them.  I rarely get too far into the process before throwing everything up on the nearest wall to help codify and clarify my thoughts. Thus, this presentation from Alex Osterwalder resonated deeply.

| View | Upload your own

More on Innovation from OVO

I have commented before on OVO, a firm that is on the front lines in promoting innovation and the processes that deliver sustained innovation in enterprises. In their May newsletter, OVO Views - Conversations About Innovation, they addressed one particular topic that I thought was extremely important and worth passing on - Important Criteria for An Innovation Leader.

There are a number of characteristics we have found in innovation leaders who have been successful. Conversely, at least one of these and characteristics has been lacking in less successful innovation team leaders. Let's examine five key criteria for successful innovation leadership and why we believe they are important.

Desire

Some people grow up wanting to be accountants. Some grow up wanting to be engineers. Everybody starts out in life wanting to create the next "new" thing, but somewhere along the lines many of us give up on that dream. Individuals who are successful at leading innovation teams have a desire and innate belief that they can not only envision new products and services, but they can implement those ideas successfully. They've never lost the dream or the desire to innovate.

Several individuals we've worked with who were "assigned" to the innovation lead were less than successful because they viewed the assignment as a job and did not have the desire to innovate.

Innovation leadership a job that requires volunteers who have a desire to innovate. Innovation leadership can't be easily assigned.

Vision

Successful innovation leaders have a vision of what they can accomplish. Often, that vision is shaped with senior executives who map out corporate strategy and the innovation leader uses that strategy to inform his or her innovation goals. Sometimes innovation simply bubbles up from a mid-level innovator with great vision that takes over, supersedes or reinforces strategic vision from the executive team. Innovation leaders need to be able to craft a vision of the future, identify opportunities and communicate this vision to the organization and innovation teams. 

An innovation leader has a specific vision to drive innovation in his or her business, and aligns that vision with the strategic intent of the business

Commitment

Innovation leaders must be fully committed to the success of the innovation initiative or program, and must have the time and resources necessary to engage the work effectively. Part-time innovation leaders eventually become full-time "day job" participants. Innovators with desire and vision will find the time and resources to get the job done, but will be hampered if they do not have the "blessing" of the leadership team. Good innovation leaders are fully committed to a task that has a significant amount of risk and will face organizational headwinds because it creates change and uncertainty.

The story of the chicken and the pig at breakfast comes to mind. At breakfast, the chicken is involved (eggs) but the pig is committed (bacon). Innovation leaders can't have "chicken" commitment.

We don't expect a CFO or CEO to be part time, so why would we expect an innovation leader to shoulder an important responsibility on a part time basis?

Fearlessness

Good innovations often fail, for many reasons. Yet that failure should not stop the firm from trying again. Innovation likewise can be fraught with risk or uncertainty. Innovations may require that a firm cannibalize its existing market or products, or disrupt a competitor. Good innovation leaders recognize the amount of change and risk inherent in innovation, and are willing to challenge the status quo and are willing to face the risks of change and uncertainty, with the knowledge that many of the new products and services will fail. 

Good innovation leaders do not succeed by trying not to fail.

Communication

Good innovation leaders are constant communicators - finding the channels and messages that best relay the intent and message of innovation to the broader audience. Since innovation creates uncertainty and change, people throughout the organization must understand the goals of innovation and the rationale behind the activities of the innovation teams. A good innovation leader is constantly communicating what is happening and why. Without good communication, an innovation team may seem more like a "wild hare", unfocused and dangerous to the rest of the organization.

Innovation happens in firms where clear goals exist and people understand how innovation aligns to those goals.

Innovating on Purpose

I have become a bit of a fan of OVO, a company that is totally focused on promoting innovation and idea management within organizations. While many enterprises talk about innovation, few actively promote innovation and fewer still manage it with any rigor. OVO has done some terrific work in helping companies create sustainable, repeatable innovation processes and has developed software applications to enable the processes.

They provide access on their site to some solid intellectual capital on innovation processes. Their white paper, Innovation Locations, has some insightful thinking on how to manage innovation across the enterprise to ensure that ideas are nurtured, funded and coached while avoiding redundancy and wasted investment in time and money.

With the increasing focus on innovation as a strategic imperative, it hardly seems necessary to defend the importance of a focus on innovation. What is becoming increasingly important is the manner in which innovation is managed. Most firms immediately recognize innovation as the most valuable driver for organic growth. Yet innovation remains a poorly understood function in most organizations, inadequately defined and staffed, or an initiative that is tucked away in a corner of the business. It is not unusual to find that firms have several simultaneous programs or initiatives in different parts of the business focused on “innovation”. The challenge these innovation initiatives face is their definition, focus and visibility. Innovation should happen in different locations within your business, and the location and strategy of the innovation teams should dictate the kind of innovation, its measurements and metrics. Here we are defining an innovation “location” to mean a team or group within the corporate context that is working on innovation, not necessarily a geographic location.

OVO suggests that formalizing innovation processes inside the enterprise can be made more successful by establishing a small corporate innovation team.

Increasingly, larger firms find value in creating a corporate innovation team or “center of excellence” to sponsor innovation and provide common tools, techniques and processes. This team defines and distributes the common innovation processes and tools that all innovation teams in every location can use and trains individuals in the locations to improve their innovation skills and offers advice and support to the teams in the locations, acting as a facilitator, coach or devil’s advocate. Additionally the corporate innovation team can gather insights and trends and begin to synthesize those insights to provide additional input into the ideation process. The corporate innovation team plays different roles depending on the location and the need for their input and involvement. On a purely incremental product idea within a product team, the corporate team would ensure the innovation team in the “location” used the defined processes and tools. For an idea that is disruptive and not clearly within an established line of business, the innovation team might gather data about the idea, establish evaluation criteria and take more ownership of the idea. Finally, the corporate innovation team can help provide increased visibility to ideas and the investment and return on all the ideas and innovation projects across the enterprise through an innovation portfolio concept.

While creating a corporate innovation team may make the innovation approach, tools and techniques more consistent, the team does risk adding another layer of complexity and clouding the responsibilities and relationships between itself and the “locations” where innovation is underway. In some instances it may make sense for the innovation team to act as coaches or facilitators, and in some instances it may be best for the innovation team to “own” the generation and evaluation of ideas. This level of involvement will differ on a location by location basis.

In an environment of increasing globalization, constantly emerging and evolving technologies, and new and often unexpected competition, innovation is a process that cannot be taken for granted. Investments in time, people and infrastructure are necessary to realize the optimal ROII (Return on Innovation Investment).

The Future of Innovation

A study from the ILO (Innovation in Large Organizations) Institute concludes that, in terms of process strategy, the most effective innovation programs

draw the widest possible inputs from all sources, within and beyond a company’s boundaries, including suppliers, customers, and broad networks of other sources; 



place this collection of ideas into competition with each other, with as much judgment coming directly from the marketplace as early as possible in the process;

and base their innovation processes in part on a back-to-front model, with a coherent plan and an effective team identified early in the innovation process for eventually moving successful new products or services from incubation to mainstream production.

The report, The Future of Innovation, is available at the ILO Institute Website. 



In terms of tactics and day-to-day practice, the report highlights three key points of consensus that are widely held among innovation executives at large corporations:

Vocal Support from the Top - - Strong and frequent messages from the CEO of an innovating corporation are essential. The core message must be vivid, perhaps even extreme: without a commitment to innovation, the company has no future. 



Refuge and Champion - - Innovators must be given refuge from day-to-day demands of corporate life to the fullest extent possible, and they need a senior management champion to “fly high cover,” as one former Procter & Gamble executive put it. 



Fight the Immune Response - - No matter how effective and heartfelt top-level support for the messy and threatening work of innovation is, large organizations can’t help but put barriers in the way of innovation. Innovation leaders have to expect this, and fight strategically against the various barriers certain to emerge, including “sales prevention departments” like legal and loss-prevention that will object to important new ideas; “feature creep” that loads good new ideas with too many expectations for performance features; and star treatment for high-performers who will often try to shoot down new projects they find personally threatening.