Bill Fischer, Contributor
Ideas, Innovation, Globalization, & China
10/17/2011 @ 8:37AM |217 views
Innovation: What's New?
The author is a Forbes contributor. The opinions expressed are those of the writer.
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After speaking with nearly 100 Chief Technology & Chief Innovation Officers, ADL has concluded that the new face of innovation has five principle new dimensions:
Customer-based innovation –seen as the most important concept of all in terms of future investment priority: engaging with customers in deeper and more meaningful ways to create stronger relationships and stimulate a desire to be fully involved in the innovation process. This includes: designing-in emotion, integrating social-networking, and being more sophisticated in open innovation.
Proactive business model innovation – creating new ways of building innovative business models or reshaping existing ones, based on delivering lasting value to customers and stakeholders, using modular approaches to cope with global/local complexity and adapting business models to new markets.
Frugal innovation – originating new innovations in lower income, emerging markets and adapting these to more developed markets thus allowing companies to profit from the full spectrum of opportunity that different markets have to offer. ADL remarks that "Frugal Innovation" brings about a rethinking of the nature of innovation. Instead of "more" it is often about striving for "less."
High speed/low risk innovation – getting products and services to market not just quickly, but without flaws through gradual product rollouts, global 24/7 product development and increased use of trials and experiments.
Integrated innovation – taking traditional innovation approaches from New Product Development such as portfolio optimization, ideas management and stage-gates and applying them across the whole value chain of the business. Although they don't say it as such, this sounds to me very much like "innovation as a crusade", in which everyone in the organization becomes an "innovator."
This is an interesting list and certainly one that innovators ought to be considering when determining whether or not they are practicing at the state-of-the-art. But, there are some additional advances that we see from the innovation programs that we run at IMD — including the Driving Strategic Innovation program which we run in partnership with MIT's Sloan School of Management – and which are missing from the ADL list, or could receive more emphasis than their CTOs/CIOs gave them. Among these new advances in innovation practice are:
Adoption of Design Thinking: Perhaps Steve Job's most pervasive legacy, the embracing of the advantages of design thinking are beginning to become celebrated within the innovation communities that we are talking with. By Design Thinking, what we are describing is a family of beliefs and approaches regarding innovation that include:
- Jumping the curve — a willingness to pursue disruption, instead of waiting to be disrupted
- Inclusive Innovation — involving as many "stakeholder" points of view as is possible in the early stages of innovation, in order to make the ideas more appropriate for those who will live with it, and to move it faster to adoption
- Conversational Centrality — an appreciation that innovation is really all about better conversations, and then making the managerial choices which are necessary to have those better conversations
- the Power of Diversity — innovative conversations almost always can be made better by including different points of view into them, and this is the real power of diversity
- Making lots of little bets – The idea that by following the lead of IDEO, and others, and instinctively prototyping everything in a rough, rapid & realistic fashion, a "culture of prototyping" is emerging with the result of increasing the specificity of stakeholder feedback, and reducing the costs and time involved in innovative risk-taking, and has become a way of life in many innovative communities.
- Experience as the objective, not the platform or device — here is another Steve Jobs' lesson: work to make the customer's life better, not just to add attributes to a device.
- Begin anywhere — you are your value-chain. An innovation anywhere along the value-chain will impact you and your customers and suppliers, so you need to be thinking strategically about what could be done differently, and who might do it?
The Tsunami of Co-Creation: The ADL report notes that "In future decades we will look back and realize that we are today with open innovation where we were with new product development and stage-gate processes in the late 1980s." No doubt, that's true, but we think that it will happen much sooner than a few decades. Our perception is that an acceptance of all forms of inclusive innovation, is moving across the innovation community landscape with tsunami speed and power.
Strategically Choosing to Capture Value rather than Creating It: At the moment, this is the story of much of Chinese innovation. Whether it will continue to be the chosen path for globalization in the future among Chinese firms is still unclear, but for sure it's a strategy that has implications for both value-creators [original inventors] and those doing the capturing.
Closer Value-Chain Collaboration Leads to Faster Innovation: Case in point: China! Why is China seen as being such a fast-follower in value-capture? It's the conversations among supply-chain partners! Why is the immediate future apparently unlimited for Apple's iPads and iPhones, and not for RIM and other failed tablet-makers? It's the Apps! Both China's speed and Apple's abundance of apps are the result of easier and more profitable value-chain collaboration. Remember: you are your value-chain!
Inclusive Probing of Uncertain Futures via Lead Users: In the face of an increasingly uncertain future, and faster industry clockspeeds, a need to rely more on what my Driving Strategic Innovation program colleague Eric von Hippel has referred to as lead-users is gaining renewed attention. Lead-users are struggling with next-generation issues way before the incumbents in an industry are (& certainly way before "early adopters" have even thought about these issues) and typically are "crafting" workable insights into the future as a result.
Increasing Reliance on Virtuoso Teams:Increasingly we are seeing a reliance upon temporary teams of high-performers, working under immense time-pressure and in physically intimate surroundings, as a way of breaking through the traditional barriers to new idea generation and then moving those new ideas rapidly to market. The successful realization of talent is the secret behind such virtuoso teams, and could well become one of the most effective differentiating advantages in the future.
Innovation is an inherently contradictory art — requiring strong, self-confident leadership: My partner in innovation studies, and good friend, Charlie Fine, of MIT's Sloan School, has often pointed out that there are no "simple fixes" to mastering the art of innovation. Contradictions are everywhere, and need to constantly navigated on your way to innovative success. For this reason, both he and I are constantly impressed by the advantage that strong, self-confident leadership brings to an innovation team. Contradictory as it may appear: great "bottom-up" (thousand points of light) innovation thrives under the direction of strong, self-confident, top-down leaders: think Edison! Think Jobs! Think different!
Rodrigo González Fernández
Diplomado en "Responsabilidad Social Empresarial" de la ONU
Diplomado en "Gestión del Conocimiento" de la ONU
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