Innovation – Past, Present, Future
Insight From A 30 Year Journey
October last year I was invited to share my thoughts on innovation, past and future, at the Innovation Day 2021 of the AQS (American Society for Quality) Innovation Division. Below an article based on my presentation.
As it seems that no conversation about innovation lasts long before the question of definition comes up, it might be helpful to share the definition I have used since 2010: Innovation – the path of embracing change to create value. Whereby value can no longer be defined only in monetary terms, it is critical that ‘value’ reflects the environmental and social impact as well.
How it all began
Having started my journey into understanding and enabling innovation after completing my MBA 1992, I soon got curious, what exactly was it that set innovation organisations apart from their less innovative counterparts? To answer that question I deep-dived into anything and everything written about innovation. The outcome of that exercise was a framework which is shown below.
To briefly introduce this framework, it all starts with a strong and inspiring vision – the best vision I know is ‘putting man on the moon’. Everyone knows the goal, no one is told how to do it, everyone wants to be part of it. it is not only important to have a vision & strategy for the organisation overall, it is equally important to have a clearly expressed vision and strategy for innovation, that of course needs to be liked and lie in with the company strategy and vision.
This vision needs to be enabled and brought to life by the leaders of an organisation (by the way, ‘leader’ is a non hierarchical concept), and the strategy and vision need to be supported by all the processes in an organisation, from the human resource related ones to IT, market research, communication and so on.
To give an example, if you declare that your organisation is seeking to transform the mobility industry, ie that you are seeking radical innovation, then your leadership style needs to support that, ie no micro management, acceptance of a certain percentage of failure, lots of exploration and experimentation, and so on. If your processes are too prescriptive in the early stages, if you are using traditional methods of market research, you are likely to kill anything that could deliver a truly transformative result.
A fourth factor is the company culture, that is critically influenced by leaders and their style; and then there is the physical work environment that can either support or hinder innovation. Lots of segregated spaces, lack of shared facilities, inflexible environments are less likely to nurture innovation that environments that offer shared, flexible, diverse spaces.
Innovative organisations are also different in the way they engage with the outside world, e.g. suppliers and customers and I’ll come back to the progression in these areas in a moment.
Finally there is the context – no organisation operates in isolation, they are all part of a wider industry context which includes competitors, regulation, that tend to be characterised by different types and rates of innovation, reflective of the industry’s life cycle.
Innovative organisations do something different from less innovative counterparts in all of these areas.
This framework formed the foundation for five rounds of interview based research into Innovation best practice & future challenges’ I conducted between 2001 and 2015 – participating organisations are shown in the figure below.
Here a few perspectives on innovation from the first round of interviews:
- Innovation in this company is not really wanted.
- Innovation and NPD is something we worry about if we don’t have
anything else do to; we don’t have time for it otherwise.
- Innovation does not get high priority from the board, they say it is important but not urgent.
- Innovation is someone else’s job.
- The attitude towards innovation in our organisation is: good idea but…
- At present innovation is done enthusiastically by amateurs.
We clearly have come a long way. But, has the frog actually become a prince? To answer that question I would like to take a look at some changes in the ‘What’, ‘Who’, ‘How’, ‘Where’, ‘When’ and ‘Why’ of innovation
Changes in the world of innovation
The following framework illustrates how what we associate with innovation, ‘The What’ has evolved over the years. Before taking you through this framework though Id like to point out that all of these types and levels of innovation have always existed; what has changed is the degree to which organisation consciously seek to produce these innovations.
When I first came across this framework back in the early 2000s it only had the first three categories, product, service, process innovation. When I used it in my textbook, Managing Innovation Design & Creativity, published in 2003, I added business model innovation, which was just starting to attract attention – as a reference point, the book introducing the by now quite widely known and used Business Model Canvas, developed by Alexander Osterwalder and Yves Pigneur, was published in 2005.
In the 2008 edition of my textbook I included the ‘social innovation’ category. A key publication defining the topic in business context was published by the Young Foundation in 2012.
Most recently I have added ‘societal innovation’ as I believe that with the advances of technology, digitalisation and AI it is time to review how we operate at the societal level. How would governmental and societal infrastructures look like if we designed them today, rather than having to deal with the legacy systems of the last millennia?
An important implication of the expansion of what ‘innovation’ encompasses is that if you are operating in the bottom left corner, you can probably succeed even if just one department is involved; if you move beyond product into the realm of services and processes, this generally already requires the involvement of more than one department to succeed; the further you move from the bottom left to the top right, the more parties need to be involved, the more collaboration is required, the more complexity emerges.
This brings me to a review of a second aspect, ‘The Who’.
When I did the first round of research, back in 2000, many organisations were just starting their journey to figure out what it meant to become (more) innovative. Many started their journey by asking a generally young, enthusiastic person to figure out what it takes to innovate / become more innovative. Without either position power or ‘power through experience’ – or a budget for that matter – these young enthusiasts were sent on an impossible crusade. Once this was realised, and supported by the rise of importance of innovation for organisations, more senior people started to get involved. (By the way, this is also the point in time when women, who had taken a lead in driving innovation, were starting to take a backseat again…). The approach of assigning a lone ranger morphed into establishing teams, whether the team was made up of people actually doing the innovating, or guiding and mentoring other teams who’d do the innovating. The financial crises in 2008 was an interesting crunch point, separating those truly committed from those paying lip service: entire innovation teams were sacked in some organisations, whereas other made cuts across the entire organisation; I always wonder why there were also a few who did the only sensible thing: increase spending on innovation as such investment will generally have paid off handsomely once things get going again.
It was with the introduction of digital idea management systems that leaders began to realise that there was no way of telling where the best idea might come from. For example, when Cargill (one of the largest little know global corporations) looked at the ideas that had been collected via their globally available digital idea management system to identify where the most potent ideas had come from, they realised that there was no rhyme nor reason; they could not be connected to a particular level of hierarchy, department, or country.
This was also the foundation for the realisation that innovation ought to be the responsibility of EVERYONE in the organisation, not just a select few.
Over the years a number of different roles has also emerged, from innovation assessors, to a chief innovation officer, to an innovation strategist, innovation practitioner, design thinking processional and also – as reflected in the various certification programs provided by GInI, co-organiser of the event, and on whose advisory board I have the honour to serve. Most recently they also established a certification for students with a focus on innovation.
Moving on to ‘The How’. Here are two aspects I’d like to share, the first connects to the previous, the who.
Whereas 20-25 years ago innovation was seen as the prerogative of the few, happening in isolation behind closed doors, today it is understood to be a team sport, a collaborative affair. The critical importance of diversity has been noted, and with it the need to better understand and engage with those who are different from us.
There are two aspects that influence the degree of success of ‘collaboration across boundaries’, as I like to call it, an emotional, and a rational aspect. The success of a collaboration will depend on the degree to which people respect and trust each other on the one hand (the emotional aspect), and whether the collaboration has benefits for one or all (the rational aspect). The scenarios resulting from these two aspects are summarised in the 2by2 matrix below.
I find that the younger generations have much less of a problem with ‘those who are different from us’, though am wondering what dramatically reduced ability to travel, explore foreign countries, culture and people caused both by COVID and the belief that we can do everything virtually might do to this trend …
The second aspect of the ‘how’ is the way we plan for the future. In the past organisations would most likely have asked: what are our skills and other assets, and where can we go with that? An approach we know as forecasting. Today many start by imagining a future, or different possible future scenarios, imagining what kind of products and services might be needed in that future. Only then do they return to the present and existing assets and skill sets. Based on the gap between the desired future and the present they decide what to keep, what to do more of, what to stop doing, and what new skills and assets to acquire. This process is known as backcasting.
You may also want to think of this as a shift from a predominantly technology-push approach, to one that is predominantly market pull. Though we know that either can work. Back in 2010 Booz & Company identified 3 possible innovation strategies: Need Seekers, Market Readers, and Tech Drivers, whereby those focusing on needs were the most successfully, financially and otherwise.
Considering ‘The Where’, Innovation used to be something happening within the confines of either the R&D or the marketing department, depending on the industry; and most certainly it was firmly contained within the organisation’s boundaries. This all changed with the onset of the open innovation movement. One of the very earlier players in this field were NineSigma and Innocentive, founded in 2000 and 2001 respectively. The new approach was widely publicised by Henry Chesbrough’s book ‘Open Innovation: The New Imperative for Creating and Profiting from Technology’, published in 2003 (note: the focus here is very much on technology).
I always like to point out that until perhaps quite recently what we were talking about was actually open ideation, as it was the creation of ideas from anyone anywhere, not the development and implementation of ideas with anyone from anywhere…
Initially focusing on the collection, sharing and refining of ideas, idea management platforms have since evolved significantly, often integration project management tools, and ways for highly dispersed teams to collaborate.
On that note, I would like to mention that this – collaboration across highly dispersed teams – can be a challenge. While remote / virtual collaboration has increased steadily, given a huge push by the pandemic, we know that remote teams work best with high degrees of homogeneity. Not surprising, as sense making relies only on 7% on the words we hear, 37% on the tonality, and a whopping 55% on body language. So the more alike we are and think, the less chances for misunderstandings when we have to make do without up to 93% of clues. However, of course we know that diversity is the lifeblood of innovation. One way to start counteracting the challenges is to create a deep awareness of potential challenge caused by diversity, as well as an appreciation of the huge benefits that diversity brings.
I like to mention that the research I looked into, and which resulted in a white paper titled ‘innovation through new ways of working’, which basically meant remote working, was written about 10 years ago, so things will have moved on since then.
The second but last ‘W’ is about ‘The When’. It seems that in earlier days innovation happened, yes, but often accidentally, sporadically, not quite intentionally, and certainly much less with the customer / end user in mind. This has definitely changed! Most organisations have processes for the proactive pursuit of innovation in place; there is an understanding that different types and levels of innovation require a different infrastructure to flourish, and that risk and reward vary considerably, depending on where on the InnovationScape you play.
Idea and portfolio management, funnels, customer journey maps, design thinking, agile and so on and so forth are all tools that support deliberate efforts. And of course, most importantly, the formulation of the afore mentioned innovation strategy that is tied to the company’s overall strategy.
This then leaves a final point to consider, ‘The Why’. About a decade and a half ago when I was getting a little worried that innovation had become and end in itself and everyone was jumping onto the innovation bandwagon. I started to ask the question, why do you innovate? Which quite often led to a puzzled silence. Well, is that not what we are meant to do? iIs not everyone innovation? Did not Tom Peters say, innovate or die (1997)? Yet … I am not sure you are familiar with Monty Python, a British comedy troupe, who created a series of skits around ‘silly olympics’. One of these skits was the ‘race for people without a sense of direction’. You can watch some runners warming and lining up as usual, but when the start shot is fired each runs off in a different direction. I believe that is exactly what happens when a CEO stands up asking for more innovation, without providing any further direction: everyone gets excited, and everyone runs off in a different direction.
This too has changed, there is much more talk about ‘purpose’, about innovating for the greater good. The UN’s 17 SDGs (sustainable development goal) provide a very useful framework in this context.
So, with all the progress made, does this mean that everyone in the world of innovation now lives happily ever after?
I don’t quite think so.
While so many are excited about the journey to infinite and beyond, I believe that there is not enough awareness, and hence talk about and attention to, the dark side of innovation – which I first talked about a good 10 years ago at a big conference in Denmark. It is high time we proactively talked about,
- What is responsible innovation?
- Will computers, robots and AI take over innovating?
By the way, the image in the middle is entirely computer generated.
I could easily go on about the dark side of innovation and a lack of consideration of unintended consequences… There are a number of blog posts where I have written about this and my concerns that we are, very willingly, give over to machines many of the faculties that define humanity. Here links to a few:
The Purpose of Innovation,
How far are you willing to go’,
In going forward I have three wishes:
- Let’s use innovations sensibly and with consideration for nature. For example, rather than covering the bit of nature we have left with more technology, we should use it where it does not take up any additional space, ie cover existing buildings and other infrastructure with solar panels, not fields.
- Instead of creating concrete deserts, we should seek ways to work with and through nature, improving air quality, reducing energy bills, and creating space for the nun-human creatures of our planet.
- Finally, we should remember and embrace ancient wisdom, not least the Irokese wisdom which says that we should make any decision with considerations of implications for seven generations hence.
If these wishes come true, perhaps then we can say in 10, 20 years time, that innovation and our decision have led not only to sustainability but regeneration of our beautiful planet.
This article was sent to the ILF Community 3rd June 2022.