Tuning the Innovation Engine

Tuning the Innovation Engine

A major issue in achieving and then maintaining successful product development is the challenge of sustaining the optimum blend of spark and fuel that is essential for the innovation engine. Both elements are critical for innovation, but all too often these two key components can become unbalanced effecting performance and sustainability.

Fuel, in the form of commercial resources is essential for any business (including product development). And access to the vital investment resource needed for new innovations and product development is only secured through trust, risk appetite and promised reward. In the corporate environment budget allocations and supporting sponsors are essential in order to setup and maintain the lines of credit that keep the fuel flowing. Because this fuel line is so critical, much of the product development effort then becomes dedicated to protecting that supply line; progress reporting, management compliance, stakeholder engagement and even the delivery milestones and schedules themselves may all defined to protect the fuel supply that is needed for innovation. Investment angels, corporate institutions, the market place and economic forces all control the fuel supply and so they get to define the rules for its access, including its rationing, use and refueling options.

However the spark critical for successful innovation is very different from the fuel. This other key component has very human characteristics that are expressed through creative invention, initiative, thought and insight. Within a commercial business environment people recognise talent selection & development, challenge & opportunity plus work culture & rewards are among the more important elements essential to maintaining their innovative spark. Almost because these are “soft” elements of the business their implementation can become less formal and dependant on local management style. With the level of people’s engagement in sparking innovation more driven by management style rather than management controls there is considerable scope for variation in the size and impact of the innovation spark.

So how to maintain the balance for a high performance innovation engine? First by being aware that there are actually two, sometimes opposed, forces driving your innovation engine. They are both necessary but sometimes they need to be protected from each other. Second by controlling where and how those two components come together. Neither should dominate and both should be managed according to their separate characteristics. Third, by recognising that tuning for the optimum performance needs balance and timing rather than simply opening the inlets and turning up the current.

It is hoped that this provides at least some small contribution to help the cause of better innovation.

I'm interested in feedback and views to help achieve better product development. Please contact me to share your views and thoughts.

The Centre of Innovation can be outside the boundaries of your business.

Businesses are increasingly recognising the limitations of their own capacity for innovation, development and new ideas. With the rise and rise of open and reliable knowledge networks an alternative model is now available for sourcing innovation.

Open Innovation as a concept grew from the 1960’s practices of inter-firm cooperation in R&D and expanded over time into user innovation, cumulative innovation, Know-How Trading, mass innovation and distributed innovation. A leading champion of today’s Open Innovation practices is Henry Chesbrough from UC Berkeley:
“Open innovation is a paradigm that assumes that firms can and should use external ideas as well as internal ideas, and internal and external paths to market, as the firms look to advance their technology” [Source Chesbrough, HW]

In the traditional model, only businesses were involved in the commercialisation of technology. It was held that successful and timely innovation required control. However more recently, several factors have emerged driving a change towards the new open innovation paradigm:

• The increasing availability and mobility of skilled workers
• The growth of the venture capital market
• External options for ideas sitting on the shelf
• The increasing capability of external suppliers

These four factors have resulted in a new market for knowledge. Knowledge is no longer proprietary to the company. It resides in employees, suppliers, customers, competitors, and institutions. If companies do not use the knowledge they have inside, someone else will.

Today’s Open Innovation networks offer an ever expanding and extremely rich source of almost every capability and capacity necessary for innovation and new product development. While software exemplifies the traditional winner from this collaborative environment, the breadth of pure product development and innovation that is being delivered today is immense. Web based collaboration and open sourcing rivals the product development capability of any established business.

Its important for businesses, both large and small, to participate in and find competitive value in Open Innovation.

The knowledge explosion means it is increasingly difficulty keeping up with significant trends. But trend spotting remains vital to identify and encapsulate those sources of knowledge that sustain our competitive advantage:
“No matter who you are, most of the smartest people work for someone else” [Joy’s Law for the high-tech industry].

So in adopting a distributed Open Innovation model it’s necessary to acknowledge the centre of innovation can be outside the boundaries of the business. And this requires a fundamental reorientation of views about tasks, structure, incentives, management, & intellectual property.

The easiest opportunities for Open Innovation are often to be found where products and services are dominated by information and knowledge. But as more physical components of all types give way to rapid prototyping, agile methods and soft models, the candidates for open innovation are rapidly expanding across more and more areas of product development.

However old business models may need to be refreshed. It’s vital to first identify and then tightly focus on key core competencies that are to be protected for competitive advantage and sustainable customer value. Everything else becomes a candidate for participating in the synergies of Open Innovation.

And a culture of participation is vital to success. Open, transparent and merit based participation needs to become the benchmark. Clear governance, iterative processes & open product structures are also important prerequisites.

I hope this provides at least some small contribution to help the cause of better innovation.

I’m interested in feedback and views to help achieve better product development. Please contact me to share your views and thoughts.