A 15-Minute Innovation Crash Course

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Lots of hot debate on innovation the last 24 hours, I was tempted to join the party but was in meetings all day. They were lots of good exchanges and thank you everyone for sharing their views. Rory thinks I am a bit under stress, may be he's right. There's just so many things going on in a good way....so little time. Keeping up with the blog is becoming a challenge. May be it is time to call for contributors. The first names that came to my mind was the Rory, Andree, Bart and Morgan. Let's find a topic that everyone have common interest and deep passion. Invitation to follow.

Back to innovation…the concept of innovation (on a business strategy level) is now in the minds of many CEOs. The economic climate and global competition are forcing companies to rethink their business design.  There are still different definitions and here are the three most popular ones: 1/ a key variable underpinning the creation of competitive advantage and superior customer value (Baden-Fuller and Pitt, Cass Business School). 2/ the creation of new market space (Kim and Mauborgn, Insead Business School ) 3/ A fundamental reconceptualization of what the business is all about that in turn, leads to a dramatically different way of playing the game in an existing business (Markides, London Business School).

An important point here is that the focus of strategic innovation is NOT on technological aspects or brand aspects, but rather on the reconceptualization of the industry/business design in order to create fundamentally new and superior customer value and/or competition positioning. Brand will play an important part in the mobilization process. In addition, brand will take the center stage when the story telling begins. Any innovation strategy will need to be translated into a brand story. The idea is to be able to use different elements of stories and storytelling to drive change. "Innovation" and "change" goes hand-in-hand and that's when people get confused about the roles of brands.

Innovation as strategy implies breaking free from taken-for-granted assumptions about how each players compete and their intra- and inter-organizational ways of working; companies must deviate from the dominant industry recipe. The concept of “active inertia” was first introduced by Donald Sull (LBS), he refers to breaking through established patterns which is often difficult. He uses the concept of “active inertia” to indicate that even very successful companies/ marketers have difficulties in adapting to a new way of doing business.

So what are things key barriers that stopping successful companies to continuous be successful? Well its called “active inertia”: established strategic frames become blinders, processes become routines, stakeholder relations turn out to be shackles and values derail into dogmas.  What can you do? (my abridged deck below has some of the answers) I use this presentation as part of our innovation program and hopefully will help you see some of the “whys”? 

Some people think by throwing in a bunch of trend monkeys and brand parrots can produce plenty of ideas. But the question is are you framing it the right way and solving the right problem? Many make the mistake of framing the problem too narrowly either through a brand lens or capability considerations. I hope you enjoy this abridged version.

Comments

[Rory MacDonald]

Clearly not too stressed to produce another exceptionally thought provoking post.

Looking at the deck, I particularly like slides 14 & 17. To me this highlights the point that innovation is as much about execution as it is about strategy. Also 15, which I suspect is why your c-suite friends are so interested in the concept of innovation. But to me, with this type of reactive innovation, it then becomes very difficult to draw a line between what is strategic and what is tactical, especially as the speed of competition draws in the timeframes.

With your popular definitions:
1. Is a solid definition of successful innovation.
2. Is wrong – it is a definition of a possible effect of innovation but not innovation itself.
3. Is great, my only issue would be use of the word ‘fundamental’

I think we should be careful about confusing radical and fundamental with ingenious, elegant, cunning and, yes, innovative.

There is a danger of falling into Kim and Mauborgn’s trap of confusing innovation with the effects of innovation. You want innovation to have radical and fundamental effects on your competitive position, but to achieve this the innovation itself can be incremental. Innovation can be and often is: a miniscule reconceptualisation of what the business is all about that, in turn, leads to a dramatically different way of playing the game in an existing business. And isn't it is often these small elegant ways of reconceptualising the business that "active inertia" can make it impossible to see?

[Jennifer Silva]

Rory, I am a doctoral student in management and my research area is innovation. I cannot agree with what you're saying here as you're mixing up radical innovation and incremental innovation. It is not difficult to draw the line between the two. There are clear definitions except you refuse to see them. The three scholars are authorities in this area. There are no differences between innovation and effects of innovation, you are playing with words or you are just confused.

[Glin]

Maybe it's the copy, but those innovation statements seem very dramatic in nature. One of my favorite descriptions to date is that "Innovation is the application of an idea that results in a valuable improvement". The implication is that, yes, there are complex game-changing paradigm shift innovations, but there are also simple changes that can revolutionize how industries do business. All it takes is a willingness to listen how other verticals do things differently.

Make, change, combine, contrast, fight, challenge - innovation is the application of recognition that there is always a better way to do things, and unless you challenge the "right" way you've been taught in school, someone's always going to kick your ass. Your competitors are probably all doing what is "popular". You can fight for that brief first-mover advantage while everyone pursues the same target, or you can change the game entirely.

[Rory MacDonald]

Can I just start by saying that people starting their post by lauding their job title or their academic background doesn't make their opinions or logic any stronger. I could throw mine around but than I would be being utterly ignorant of netiquette and online culture.

@ Jennifer - I wasn't mixing anything up, I was drawing a distinction between cause or action and effect. If you believe "There are no differences between innovation and effects of innovation" then you have a very poor understanding of systemic analysis for a doctoral student.

The point I was trying to make its that the object of competition strategy is (in most cases) that it should have a radical effect, but that that radical effect can come from incremental innovation. I personally believe it is wrong to say you need radical strategic innovation to have a radical effect on your business.

Sometimes it can be very subtly different ways of looking at things which can have the greatest effect on strategy.

"There are clear definitions except you refuse to see them. The three scholars are authorities in this area." - A very innovative mindset. I was under the impression that academia was about debate.

[Jenifer Silva]

@Rory. I was just trying to introduce myself and I am only a student. Not sure why you think I am throwing any title around. I am not any big shot of any large company. This happens to be my area of research and I have a passion for this field. Not as a practicing manager, just a doctoral student.

I was reading your long posts and thought I should voice my opinion. I think you are wrong to say that the object of competition strategy is (in most cases) that it should have a radical effect. A competitive strategy in fact usually is not radical because it is based on current industry structure. Radical innovation or strategic innovation is about taking bold moves to change that. So it is the opposite of competition strategy. Go do some research lease. I am sure Prof Motee must have a few B-school library cards to spare.

[Rory MacDonald]

@Jenifer - Great point. If, as you say, the B-School definition of radical or strategic innovation is the opposite of competition strategy, then I take your point.

However it doesn't then seem to fit very well with Idris ' chosen definitions particularly 1 but also 3.