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Corp Innovation conundrum 4

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Closely related to the idea of innovation as a skill to sell old ideas to older people…especially if they have a budget and some fantasy

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On agreeing to a vocabulary

Here is what we joke about conferences, everybody (audience, speakers, and event managers) starts with ‘a need to agree‘ on something early morning. This could range from “innovation is critical to success of business/India”, “gamification is revolutionizing business process”, “stories are the next strategy” or something like that. By end of day after speakers speaking, audience listening and event managers buzzing, the host notes that ‘all have agreed‘ on what we began with as a need, marking the successful close of the conference.

What happens in between is forcing a choice between competing sets of vocabulary, and each trying to push the other out. Even within one vocabulary, speakers/participants lean towards a specific sub set.

Here is where the conflict lies, and below examples as I noticed in a recent conference.

1. Visibility versus viability, while who ever is on stage successfully runs a viable business or used to, everyone else is simply looking to be more visible, like a 70 word intro before a 15 word question to speakers, or other plugs.

2. Cost versus price, this one is common even while the discussion is about pricing, most participants confuse it with their costs, and unable to rephrase / appreciate a concept for price. I think this is a genuine psychological inertia that is exhibited.

3. Revenue versus capitalization, most speakers agree that while the real deal for any valuation should actually be the revenues, most tech ventures are traded for capitalization. And who decides this price, the banker / investor / startup / someone else. In any case the switch to the higher number (usually capitalization) is towards resolving the first conflict of visibility versus viability.

4. Sales versus marketing, even if a session is about writing an advertorial or sponsored tweet, most confuse it with sales, this chunking of ‘sales and marketing’ is a way to avoid any responsibility in it, “…see I am techie…, the other guy in my team does all that”

5. Problem versus opportunity, not much of a conflict in this one, but still this comes to play when you are inside an already running business, best resources are staffed in the largest / most profitable current account fixing issues to keep the customer and not the most promising opportunity of acquiring a new (possibly less painful) customer. (the ‘strategic account’ conversation for another day)

Point I am trying to make is simple, to choose a field means adopting its vocabulary and its conflicts, and with changing fashions/fads if your vocabulary does not evolve as well, you are outdated even before you started.

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Exploitation as contradiction in ideality

2 really disparate examples of exploitation here, I will do a couple of illustrations for defining these contexts as contradictions in players’ ideality and then applying a trend.

One from the affordable internet efforts and why even with reducing capex and opex telecom companies would not cut prices to customers and continue to exploit.

Player Function Ideality Contradiction and resulting exploitation
ISP/Carrier/Operator connect subscribers                          to internet not lose subscriber base, increasing revenues/cash flows, decreasing spend, monopoly increasing average revenue and profit per user directly contradicts with customers ideality to pay
Customer/Subscriber connect to internet for access to services and information pay nothing for connectivity, highest speed possible, always connected ties with devices, price increasing data plans, speed limitations, and forced congestion from operators
Investor invest for returns in companies that make profits reducing capex and opex with increasing revenues and profit is approaching ideality reduced customer service levels and migration of customers, puts revenue and profits on a decline, hence the stock value as well
Media Industry create and distribute media monopoly for content and affiliated business, no other competitive media / distribution channels becomes viable Access to media from internet directly contradicts with their business model to sell content from traditional forms of discs, cable tv content

Second example is around immigration from the recent Syria crisis, even though legal immigrants add value to the migrated place, why politicians continue to exploit voting population by fueling negative perceptions around immigration. But still continuing to turn a blind eye on labor exploits of immigrants to continue with a not so competitive economy.

Player Function Ideality Contradiction and resulting exploitation
State/Politician development and upholding state  sovereignty zero dollars spent on regulation, and citizens get all priority services from government, and never lose an election allowing cheap immigrant labor into non-subsidized industries maintains a bad economy building a false perception around immigration maintains status quo and votes from conservative population that wants to maintain sovereignty
Immigrant Labor to industry every border is open, every country is ‘migration’ worthy, on par with citizen benefits, rights protected lack of labor law to govern their employment means giving away rights, without votes or rights deprived of having a voice in the country
Industry/Employer Value creation for economy, investor, and customers cheap and exploitable labor use and less than minimum working conditions for higher profits, no litigation on violations lack of labor inspection / governance maintains  status quo, including less than worthy labor conditions and pay to immigrants and this as the only way to maintain competitiveness in a falling economy
Citizen Tax payer and uses benefits from state.Also customer for industry. Subsidized sectors, and unemployment benefits for citizens, Pay/Benefits without job. Subsidy perceived as right and any state capital spent on immigrants is actually something the citizen could be deemed eligible for as lost/wasted.
Border Control Regulate migrant flow into state no immigration (legal / illegal) means no patrol or control necessary migrants posing threats to sovereignty, and citizen welfare, calls for massive spend in border control and leading to a back passage creation

Now in both cases at super system level, you could add regulations that will move some functions from the players to another neutral authority. So Regulatory Authority could standardize price plans, open up migrations across, just like they do in insurance policy terms and conditions. Similarly new technology like unlimited connectivity say from Google Moon or, open id, could turn functions in favor of customers/migrants, while skewing for specific types of businesses and not the legacy ones.

In both cases simple system completeness trend will show deficiencies in the governance bit, and a massive undercut of benefits from customers/migrants as a driving force for the functions delivered.

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Yet another innovation taxonomy…

this, that and more

I will be a little inarticulate here, specifically when it comes to innovation, what do we talk when we talk innovation internally. Depending on background, perspective, role, among other factors, it could be any of the above.

Capability I use it here within a very specific boundary, Honda’s example illustrates this point clearly, from seeing itself as an automobile maker, it sees itself as a power systems designer, with such a simple shift in outlook it has been able establish itself as a leader in many related fields like portable power, boat engines,   etc. Technology companies confuse capabilities a lot, as there are too many of them. So easier way to classify further would be to pick specific business outcomes that gets affected by a technology. For example capability to A/B test designs, capability to cut down ROI with new technologies, etc… One of the popular side to this classification is seeing creativity in relation with innovation and trying to build creativity / creative talent internally, usually through training.

State is like “being pregnant”, a very clear yes / no, and it gets theoretical to philosophical to spiritual when the nature of state discussion starts, and some are inclined to this specifically, usually the ones that also pick on innovation as a concept at a mental level. Concepts are related and complexities from subsumption / differentiation plays here and really no basis needs to be given, as long as it makes sense as a valid argument. None of these 2 has any outcomes guaranteed and safely so. Else we have to wait for a long time for that state or the concept argument to end.

Department is a space, earmarked for all those innovation action, in Apple it happens to be the design department, in IBM it is either Sales or research, I can no longer tell which, in GE it happens in research. Mostly a centrally funded structure with clear mandate on outcomes and how the units will use those. But with availability of information across boundaries becoming easier, it is very hard to keep an edge from within one single department. Still a preferred choice for old, hierarchical companies.

Process/Action is the distribution of what used to happen within the department and making it easy for anyone to do innovation with clear steps and results. Behavior/Culture I feel enough has been said and is absolutely not my favorite, as I put personal responsibility ahead of popular inaction.

So whichever way you want to define innovation internally and classify it, some things do not change, those include “tasking” around whichever metaphor you picked, managing risks on action, investment and market, measuring outcomes and reporting it out to investor/bosses, of course responding to politics that is there in any human/social system among other action.

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Innovation questions to management, some more

Which of the following gets an overwhelming yes from your leaders internally

  1. We don’t have to  innovate or invest internally in innovation, as there are other smarter players and start-ups, that we just need to follow suit or outright acquire them. Just tell me who they are?
  2. We know our team has ideas on strategies and priorities, that we are unable to invest time and resources. Can the innovation team just take up one/many such items and come back with solutions?
  3. We are all stuck in a very old thinking pattern and tenet, constrained by assumption. All we need is a training that will help us break that pattern and leave it at that. Can we also get a certificate at the end of the course?
  4. Problems provide the best low hanging fruits for innovation, can we just stick to problem solving, instead of doing open themes for innovation?
  5. Decision on strategy are made elsewhere at least in our area of work, really see no road ahead for any idea pipeline, even if they are only mildly disruptive. So we should focus on execution than innovation?

my original and building list of survey questions on innovation is here

 

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Innovation risks

Drucker‘s Landmarks of Tomorrow lists clearly 3 risks that arise out of innovation is comprehensive and can orient towards tasks and outcomes around innovation quickly. Even if outcomes are a function of many variables and ambiguous,(an excuse that innovation managers typically ride on to retain jobs/titles while not really “tasking”) you still have to act. That said  “tasking” / task orientation is necessary and not arbitrary or ambiguous in any enterprise. That’s a post for another day. So these tasks arise after the enterprise decides to reduce its first risk in innovation.

1. Risk of Exposure. Exposure risk is an inaction risk, while remaining very successful in the chosen market, this risk makes the whole business irrelevant as newer models and innovations take over existing customers and create new ones. I visualize this risk on a slider bar, where there is a NO on the left end and an YES commitment on the right. Depending on the level of YES, time and resource availability is determined for innovation.

Risk of Exposure Slider bar

This YES commitment (on the risk of exposure) does not mitigate but lead to the next, new set of risks below. In any case this risk cannot be avoided. You can see examples today in education like the massive open online courses offered by Coursera and the likes while the incumbent i.e. every higher education player could have very well acted earlier or the popular digital photography disruption misses by Kodak.

Risk of failure in developing the innovation When I heard Ravi Venkatesan at the recent Zinnov Confluence, he mentioned “skunkworks are interesting to see in labs, but unless the whole organization aligns to an innovation, there is really no chance”. I believe that, by organization he would mean the “tasks” on business processes starting from budgeting, development, sales/marketing, service, legal etc. that are specialized and entrenched across departments, but need to come together. Successful businesses ideally should not delay capex investments into innovation, and commit to experimenting the next set of revenue drivers. Experiments could be for example

  • small like skunkworks or community driven developments internally
  • taking ownership in companies that are doing the development

Still the structure has to commit itself to this developmental action and evaluate all along even if it means changing directions many times mid way to make sure the next risk of failure is covered. With the crowd sourcing possibility on almost anything this risk has greatly reduced, this as a model has been operational across many platforms like kickstarter (for investments), or ninesigma (for effort).

Risk of failure of the innovation itself

This is the biggest of all risks and can be really dramatic, and we know many stories like these in recent times. What Drucker calls here as ‘responsibility for the consequences’ of the failure itself, while constantly acting for the opportunity. It is no more a chance but choice and choosing to resolve contradictions between the global versus local, profit versus free, etc and thus becoming a value decision in itself. Most of us are aware of the commercial failure of much touted innovations like Segway and others.

Risks in Innovation

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Innovation Cues: Force Field Analysis

When Kurt Lewin came up with the framework for Force Field Analysis it was only applied to social situations, as in conflicts/society. If we take the same framework to innovation it becomes hugely applicable in developing ideas within an organization, which in itself is a complex social setting. In this post I will try to explain the basic form of force field analysis and how I think it can be applied in an innovation context.

First the concepts, “force” is a factor that drives movement within a setting, and “field” is an overall/gestalt setting as combination of many elements including motives, needs, ideals, values etc. In the analysis we list down forces that move a goal in opposite directions as is like below

Goal: _____________________________________

Worst Outcome aka Hell: _____________ Ideal Outcome aka Heaven: __________
Forces in the negative direction

  •  
Forces in the positive direction

  •  

Key questions to ask in the analysis after you list forces are

  1. What can I do to eliminate/reduce the forces that are against developing an idea further?
  2. How can I reinforce/strengthen the positive forces that will push the idea further faster towards an ideal outcome?
  3. Can I add a new positive force?

It is interesting to note the similarity between Ideal Final Result or Future Backwards here. But the key difference is force field analysis is centered in the “NOW” (not on a future or past), thereby assessing the current setting and draw a path to creating favorable conditions for innovation to flourish.

Even if it means communications/messaging, building relationships, having an open conversation, resolving conflicts of interests, agreeing to share credits/power/outcomes, among other “political” action that an innovation manager does. 

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Evolution and speed measures for innovation

I keep hearing “becoming more nimble“, “quickly responding to customer needs with ideas”, “rapid prototyping” that inherently speak of a speed metaphor in innovation. But what if we were proceeding in the wrong direction but very fast. An independent speed measure without looking at the evolution direction is meaningless and risky from an investment perspective. Very similar to running a project that is on time, under budget but for the wrong requirements.

It would be useful to look at the evolution within a space as ideas get developed using different methods.

For speed of course the measures will have some form of time in the denominator like

  1. Ideas per month per area
  2. Prototypes completed per month per technology
  3. Investments per year per portfolio

These can be plotted easily for comparison of speed across a time frame.

But what about the direction, here I feel directly tying business alignment on longer term goals and strategy comes in. A simple evolution potential is a web plot touching multiple different evolution directions usually within a single portfolio or in some cases many portfolio. It is a relative figure that gets plotted across the dimensions comparing against the maximum possible limit or an ideality (usually a scientific limit, like speed of light,  mobile internet reach, maximum load etc or the Ideal Final result we talk in TRIZ). All the axes are equidistant and same scale as the values are normalized as below

Normalized plot value ={Actual value – minimum need} / {Maximum/Ideal value – minimum need}

For example dimensions of a CRM system evolution you may have

  1. Communication / engagement frequency
  2. Revenue per sales staff
  3. % sales from new technology / service
  4. customer service satisfaction index

each round of innovation around maximizing these dimensions will be tracked on a single plot like below, giving you a sense of progress from those ideas. (Try and imagine what your head of sales told in last quarter analyst meeting on any of the metrics)

EvolutionPotential (2)

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Presenting old ideas to older people

Consider the following order in time

  • Old idea
  • New idea
  • Newer idea

And then consider people in your organization

  • Retiring / planning to retire
  • Old / long timer
  • New age

 

Innovation development as a combination of above Excitement for the idea External Impact of the idea

 

Posing old ideas to older people or sometimes even retiring people Highly excited primarily because they forgot to listen when the old ideas were actually new in their time, and it feels new now Very less impact
Posing new ideas to old people Medium to low depending on acceptability of the idea itself and the listener’s ability to accommodate the idea mentally Medium to high impact
Posing new/newer ideas to the new age High and generally not worried about acceptability Impact cannot be determined

Oldies maintain a default level of excitement for all ideas old/new, that is slightly below the threshold of action.

New age has a strong affinity to newer ideas and can generally go beyond the threshold of action easily, but do not sustain the excitement for long as the ideas become aged.

Inference here is every innovation manager’s portfolio should flow with

  1. only ideas that are above the threshold of action,
  2. both newer ideas of today and the older ideas we forgot to listen
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