The lessons for Successful Long-term Innovation I have retrieved from reflecting on “The Clock of the Long Now“, written by Steward Brand in year 2000. The book challenges readers to go beyond daily thinking to take long-term responsibility for sustainable development. By trying to think in a 10.000-year perspective, the book stimulates the brain to think in new ways about how business can be conducted. It opens for divergent thinking, exploring possibilities based on a bank of ideas, limitations, instructions or thoughts. This stimulates creativity which again may give competitive edge for your business. Unfortunately most academic schools train students to perform convergent thinking for example by reasoning based on specific articles and instructions. This can hamper creativity later in professional work situations and lead to sub-optimal performance.

FIVE LESSONS FOR SUCCESSFUL LONG-TERM INNOVATION

The first lesson from the book addressing long-term innovation comes from Brand’s (the author) parachute free-fall experience (1. never count totally on equipment 2. always have a back-up and 3. look for an outside frame of reference). With innovations, things are likely to go wrong and accounting for the unforeseen can reduce costs and increase success. Deeper undersanding can be enhanced by consultation and in networks and the shoelace theory developed by Barnes & Kriger, where departments and people are knitted together and makes the foundation and understanding of the innovation more comprehensive.

The second lesson comes from connecting to the past; ‘if you are going to do something meant to be interesting for ten millennia, it almost has to have been interesting for ten millennia’ says Stuart Brand. Many articles are written about how leaders extract insight from crucibles in their own life. However, this can also be applied to organizations and industries, and innovators should learn from crucibles in the history of their disciplin to shape the business of tomorrow.

The third lesson is that short-term thinking and ‘progress’ may create sub-optimal solutions and embed innovations in ‘dead technology’. Long-term innovations meant to be sustainable must value resilence above brilliance and evaluate its technological foundation. Here software can be a good example when new editions of programs are built upon foundations of old coding with ad-hoc approaches to problems. Eventually it may collapse big time or be disrupted by products that are easier to understand and develop.

The fourth lesson is when moving beyond the short-term horizon a broader spectrum of innovative landscape becomes accessible. By entering the realm of chronos (the realm of long-term instead of kairos – the here and now) more innovative opporunities opens up that are less attractive in the financial world (that typically has a short term perspective, e.g. 5 years). This realm is more powerful than the short-term realm because it is more linked to sustainability, culture and values of people. It also avoids Moore’s law that is not sustainable in the long run.

The fifth lesson is to avoid a conceptual poverty of here and now. With broad thinking, one can create strong and flexible structures built to absorb and incorporate shocks and revolutions. This can be done by being open-minded, building networks and never stop dreaming.

FINAL PIECE OF ADVICE

Based on the book by Stewart Brand, it is clear that the whole is greater than the sum of its parts. The greatest good for the greatest number is the future good, as majority is yet to come. However, the future is always extraordinary and the best way to manage it is to preserve and create options. Still, future value needs to be addressed on a daily basis to be preserved (think about how religions are preserved because they are relevant in a wide set of circumstances). This creates an alignment between today and tomorrow.

Want to generate own insights based on the book ‘The clock of the Long Now’?
You can get your own copy of the book from Amazon by clicking here!

Technorati Tags: long term innovation divergent thinking

Does delegation incrase innovation?

The answer to this question is not yes or no, but it depends! Below I will explain some factors that can help you understand how participative leadership and delegation will help you increase your organization’s innovative performance.

Innovation can happen in many areas, but we mainly address five types of innovation. The most common types of innovation referred to is product innovation and process innovations. However, also organizational innovation, environmental innovation and market innovations can give substantial benefits for an organization. The problem is how to best organize your business for innovation to happen?

A lot of theorists in the field claim that delegation and participative leadership are crucial for innovation as employees involvement improves total contribution to to the outcome. This is often based on the view that sub-ordinates are closer to the areas where innovation improves performance and sooner will detect needs for change. However, the level of situational control at work can stop them from taking action and making improvements. If this happens, the organization fails to take advantage of its richest source of information and knowledge generation that will improve future innovative performance. However, by empowering employees, the organization can enter a positive cycle of increasing innovative performance.

A study by Gebert, Boerner and Lanwehr from 2004 shows that unless certain conditions are in place (employee orientation, consideration and trust), delegation and employee empowerment can actually lower a company’s innovative performance as it can lead to an overload of sub-optimal solutions, too much time spent on exploration rather than exploitation (see previous blog posts) and sub-ordinate conflicts. This can lead to a negative cycle of innovation and initiative in the organization, impacting both culture and organization environment.

Consistent with the study above Adler, Goldof and Levine (1999) examined factors that made New United Motor Manufacturing Inc (NUMMI) by far outperform competitior in the car industry. The study highlighted at least three contextual factors; trust, training and goal-congruence as crucial to improve the innovative capability of a company and create a virtuous cycle of innovation.

TRUST

It is essential that the organization have a high level of trust for delegation to work at all. Trust can include both the trust of subordinate’s willingness to do the right thing and competence to be able to do the right thing. Trust should not be “good-will” trust, but be fair and just. By trusting the employees they become the heart of the operation. However, it is also important that sub-ordinates can trust their bosses and management. Only then can they dare to take initiative for innovative solutions.

TRAINING

Closely related to trust is training, because only be training can employees develop competence to efficiently explore innovation. When and how to explore innovative solutions should be built into company policies, for example by creating innovative project groups or allow a certain percent of work-time for exploring new solutions. By training the management can be confident that employees have the tools they need to efficiently develop the organization.

GOAL-CONGRUENCE

Employees and management must have the same objectives for the organization to efficiently perform their roles at work. In the study of NUMMI, this was done by management making policies “as if” they were acting in the employees’ best interests. This included a non-lay-off policy, strong union collaboration and fair treatment of employee requests. If proved far more efficient to be a bit generous and create goal-congruence than to constantly make decisions based on the small margins.

Of course, there can be many other contextual factors both general and specific to your organization that will influence the innovative environment. Contextual factors work at a personal level and therefore can vary fron one sub-ordinate to another. It is most important that you create a culture of innovation where the above elements should be central. This is critical for the long-term success of any company.

For more information about innovation at google, click here or see Google’s nine rules of innovation here! For more general information about the success of Toyota innovation management, check this out!

The image above is freely retrieved from Freefoto.com

Technorati Tags: Delegation, Innovation, participation, Participative leadership

Hello again, now I want to tell you about something that you will really benefit from looking into whether you are a student or a manager of innovation. It may sound like promotion and it is.I really want to promote good and useful websites out there that I know a lot of people will benefit from using in their innovatio work.

The site I want tell you about now is http://www.businessballs.com/ that has a lotsof useful stuff for anyone looking into strategic innovation, organizational development, and business training. Among the useful things you find are PEST analysis, Porter’s Five Forces Model and SWOT analysis with useful information and nice templates helping you to analyze where and how you should focus your strategic resources.

You also find useful stuff for business plans and marketing strategies. In addition the website has lots of useful stuff for icebreakers, career planning, business networking tips and ideas, leadership tips and stress management etc. The site practically touches upon all the resources you need for being successful in innovation management. So you should really bookmark this page, sooner or later it will come in handy. Great thanks to Alan Chapman for making such an awesome site!

In the university, we learn the models for innovation, such as open innovation (Chesborough) and the salmon model (Orjasaeter). However, in real life, these models are more complex and harder to make work. In an interview, James Todhunter from Invention Machine says that in real life, most organization find it hard to derive value from open innovation, and that co-operation starting out with good intentions, the programs stall. Knowing how to avoid this is a key feature of innovation management.

He further says that innovation is everyone’s job at a company, and that open innovation is useful for making employees initiatives being viewed as opportunities and not threats. However, innovation do not “just happen”, and an innovation department is essential to create a culture and a context where innovation can happen. Communication, flowing in all directions, he lists as the key element to make open innovation work.

When the ideas are gathered, deciding what options to pursue, Todhunter uses the 3F method; fit, feasibility and finance. The innovation must fit your need and differentiate your product. It must be feasible for your organization’s business model. It must be financially rewarding. Hence innovation is not just about net present value, but strategic goals.

For a company to increase its innovation, it must commit on every level. This means giving employees training and tools for innovation, as well as managerial commitment. Putting strategic innovation into the business model is rewarding, but takes up a lot of resources. Critical thinking and learning skills will be the main building blocks for successful innovation in the future.

The full interview can be found by clicking here.

Technorati Tags: change management, Innovation, Innovation Management, open innovation, salmon model, Strategic Innovation

According to business strategist, Rowan Gibson, “perpetual growth requires perpetual renewal. It’s the only way to maintain continuity in a discontinuous world. And the fuel for renewal is innovation. Not merely innovation at the margins but deep, strategic innovation at the level of the core business model.” I certainly agree with him on this one, check out his article on http://www.business-strategy-innovation.com/2009/09/innovation-goal-growth-or-strategic.html

Technorati Tags: Innovation, innovation business model, Innovation Management, Strategic Innovation

Company- and product lifecycles today are shorter than any time before in modern history, and strategic innovation is the only solution to stay on top of the industry in the long-term perspective. A study performed by McKinsey’s researchers demonstrates how companies on the S&P 500 has had an average lifetime of only 15 years in 2000, compared to 50-60 years in the 1920s (Foster and Kaplan 2001). Furthermore, life expectancy in Japan and Europe is now only 12,5 years (Burns, 2001). It is clear that companies aiming for a long-term future needs to deal with change and constantly produce new product cycles (innovate) to stay on top of competitors and markets.

Innovation is often described as a “black box” where one cannot predict the outcome of the input. Because variables the processes of innovation differ, it is hard to create a recipe for innovation. However, by putting preconditions in place by having plan for strategic innovation, one opens for innovation to happen. By learning about the process of innovation, and how to utilize this in the individual company, one gains competitive advantages that will outperform emerging competition.

On the input side, it is clear that learning is a central topic in innovation, and process and knowledge are vital elements that go before innovation. This learning occurs in a range of situations and is result of human interaction. Networks and organizations are therefore vital instruments to create a platform for learning. However, learning also takes place in a context, and at a certain location. There are many more variables that impact the learning process, and a strategic innovation plan is therefore needed to guide these variables towards a favorable context.

On the output side of innovation, there are many obstacles that prevent learning to become innovation. One major obstacle throughout history is that innovation has been the duty of R&D departments, and that new fancy solutions have been lacking a sufficient market to sell the product. Furthermore can organizational culture stop good ideas to reach the market due to lack of experimentation or inadequate incentive systems. Therefore, the management must make sure the organizations are prepared for innovation.

This website will help you understand innovation, so that you can have a killer advantage to battle the market in a time where change is the only constant. By implementing strategic innovation in your organization, your company will be prepared for long-term profit maximization, as well as social and environmental challenges in years to come.

Technorati Tags: Strategic Innovation