On Innovation

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This unfinished essay was written by in December 2005 as a Framework for Innovation in a large organization.

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Executive Summary

Background

The idea for an innovation center came from many sources, among them Mears (2005) and Strategic Innovation Group (2005).

A Concept of Innovation

Definition

Kao and Company define innovation as:

the capability of continuously achieving the desired future state.

Reference.com defines Innovation as:

the introduction of new ideas, goods, services, and practices which are intended to be useful.

These two definitions, either explicitly or implicitly, indicate that the two essential characteristics of innovation are that it is something new--that is, something different than the past or present state of affairs; and that the something has utility or value in the future state of affairs, however near or far. When taken together, these two terms--newness and future value--help us to distinguish between what innovation is and what it is not.

  • Innovation is not merely invention. Innovation is the application of invention to create value in the future. The use of existing capabilities for something other than what they were originally designed for, to achieve a desired result in another domain, is also innovation.

The same holds true for creativity, collaboration, and change. None of these, for their own sake, are innovation. Each must be applied in such as way as to create future value.

Moreover, innovation is only about the present insofar as it changes the present to create a better future. If we are not about changing the present for the better, then we are not innovating.

Innovation is not just a one-shot deal. Demonstrations, pilots, and point solutions are important, but are just stepping stones for continuous progress toward the future state. The fruits of innovation must become integrated into the fabric of the organization.

  • The Center's definition of innovation as given at the Innovation Summitt (10 April 06) is:
Creativity applied with the intention of creating new value for the mission. It's not enough to have ideas or be creative, you have to do something with those ideas that ultimately leads to mission impact -- even if the impact is not evident right off the bat.

Implications

In the Kao definition, innovation feels like it is being pulled into existence by the future. In the Reference.com definition, the future seems to be pushed by innovation. In the first sense, innovation is more directed by specific conceptions of the future, while in the second, the future is shaped and created by innovation. In the one case--to paraphrase Plato's aphorism--necessity is the mother of innovation; and in the other case the future emerges out of innovation.

This distinction is important because it determines what kind of innovation pilots we nuture.

  • The future-pull model assumes we know where we want to be and we have a well-defined strategy for getting there. Thus we choose pilots that fit nicely into the strategy. Our better future is a conscious, design-driven activity.
  • The innovation-push model assumes, in a complexity theory way, that the future is nearly impossible to know and plan for. Thus, we just pick innovation pilots as the opportunities arise. The better future will emerge from the collection of pilots we pick.

When evaluating a particular innovation, then, it is important for us to understand into which paradigm we classify it--as strategic or emergent. We should not feel bound by either one category or the other -- there are compelling elements of both that can inform our activities and decisions. The vision-driven innovation is attractive because of that focused goal, but could create new blinders to opportunities for disruptive change. The emergence model is attractive because it is so open to possibilities, but could waste an amount of time and resources that is unacceptable to senior stakeholders. As in most things, balance is key.

A second implication of both definitions is a disruption of the status quo. The status quo is not static. The status quo uses a model of change that is cautious, slow, linear, incremental and safe. The purpose of innovation is to disrupt this glacial model of change.

  • As a result, innovation is a threat to those who are vested and invested in the status quo. There are tremendous bureaucratic and political forces that strive to maintain and protect the status quo. The stakes are extremely high, because the large organization's success depends on the large organization's ability to perform its duty. The status quo structure is based upon previous successes. Innovations to improve the proven status quo are dangerous because they are unproven. As such, implementing an innovation contains not only the promise of improving the Agency's ability to perform its mission, but also the threat the Agency's performance will be degraded. Those responsible and accountable for the Agency's performance take this danger seriously and personally. (cf. Christensen 1997)

When evaluating a particular innovation, then, it is important for us to have a "sales plan" to help the powerful "keepers of the status quo" understand the value to the mission of the particular innovation. While negative reactions are important to understand and manage, they cannot shut us down -- in some cases, the potential value will be counterintuitive.

Components of the Innovation Framework

Frameworks are composed of components. We will first identify the components of the Innovation framework and then show how they fit together. The three major components are scale, domain, and mission.

Scale / Scope

Scale refers to level and impact of a particular innovation. Is the innovation implemented at the individual level and have small, local impact? Or, is the innovation implemented at the organization level and have broad, general impact? For the sake of convenience, we have broken this spectrum into three categories:

  • Individual / local / micro
  • Component / regional / mezzo
  • Organization / global / macro

Domain

Doblin (2002) identifies 10 domains and the Wikipedia identifies five domains in which innovation takes place. We have collapsed and simplified these to three:

  • Business Model / process / how we work / how we are organized
  • Output / product / what we produce / the services we provide
  • Engagement / dissemination / customer experience / how we engage the customer

Mission Area

We assume the large organization has two main mission areas, analysis and operations. Analysis refers to the synthesis of source materials and insights on important issues, which are packaged and presented to top clients. Operations refers to the services performed for our top clients.

Another major area is known as mission support. This includes administrative and corporate services. Finally, the technology area spans all three areas. In some cases technical operations are line mission activities in their own right and in some cases the application of technology is in support of regular line operations and analysis. In sum,

  • Analysis
  • Operations
  • Technology
  • Support

An Integrated Framework

Putting the three dimensions in to a cross classification table, allows us to array particular innovation pilots to see if the distribution is appropriate. Whether the distribution is appropriate depends either of two factors. The first is in the case of a future-pull strategic innovation model. A strategic plan will identify the desired distribution to meet the innovation goals. The second is in the case of a opportunity-push emgergent innovation model. In this case, the cross classification table allows us to track the opportunities and watch the future emerge.


The Integrated Organizational Innovation Framework
Innovation
Framework
Mission Area
Operations Analysis Technology Support
Scope Individual
Model
Output
Engagement
Model
Output
Engagement
Model
Output
Engagement
Model
Output
Engagement
Component
Model
Output
Engagement
Model
Output
Engagement
Model
Output
Engagement
Model
Output
Engagement
Large Organization
Model
Output
Engagement
Model
Output
Engagement
Model
Output
Engagement
Model
Output
Engagement


A strategic (top-down) approach would not just tell use how many pilots we ought to have in each cell, but also weight the importance of each cell. These decisions would be based on an assessment of the criticality of the innovation need to the Agency in each cell. Once the criticality is understood, then we could determine how many resource we ougt to devote to each cell.

An emergent (bottom-up) approach would watch how the opportunities sort themselves into the cells. With a sufficient transparent and open process, the self-sorting would tell us where the Agency needs the most innovation.

Using the Framework

In order to put the innovation framework to effective use, two important conditions must be satisfied. The first is identifying issues that need innovation, and the second is establishing criteria against which to judge which innovations we go after.

Identifying issues that need innovation

In order to pursue innovation, we need to identify issues that require innovation and the partnership that will take responsibility for the innovation.

Sources of Innovation

In the business world, companies follow three general models of innovation:

  • internal generation,
  • acquisition, and
  • outsourcing.

Apple Computer and Google are the prime examples of companies that use the internal resources of the company to generate innovation. This is extremely hard to do because it requires that the corporation 1) allow its employees to work on activities that are not within the status quo business framework of the company; and 2) accept and incorporate the results of innovation into the operations of the corporation. At Google, each employee is expected to devote one day a week to work on their own project ideas. Other companies have extensive research and development departments, which injects innovation into the corporation.

Microsoft is a good example of the acquisition model. They do this by either buying new products, such as MS-Powerpoint and MS-Project, or by imitating others' innovations, such as MS-Windows. This model minimizes the risks of false starts, but in doing so, they stand well back away from the leading edge. A variant on this model, is the "Guru/Genius" model. In this model, a business creates an innovation staff and stocks it with geniuses who have occasional flashes of brilliant insight which, when implemented, transform the company. Microsoft does have a research organization staff with very bright people. The problem is with the infusion back into the company.

Consulting companies thrive off of the group of corporations that look to outsiders to innovate for them. Hiring consultants is much less expensive than devoting one-fifth of everyone's time to innovation, and is less expensive than acquiring innovation through purchase or imitation. These corporations can quite easily dismiss the recommendations the consultant offer. The potential pitfall is that the corporation can pretend they are innovative, when they are not. Digital Equipment Corporation stands out as an example of this problem.

The question before us is, where does the large organization think it is going to get its innovation? Clearly the very small Center cannot possibly generate enough innovation on its own to make a difference in the larger corporation. At best, the Center by itself could play the role of small-time consultants. The large organization is unlikely to acquire smaller more innovative components. The large organization could imitate other, more innovative agencies. Such agencies are almost non-existent. The large organization does have a small research component, which has little development capability. The most fruitful sources of innovations are the men and women of large organization who work the mission and support issues everyday.

While this is the most reasonable approach, it also tends to be the most difficult, because the forces for maintaining the status quo are so powerful.

Partners in Innovation

With the model that we want innovation to come from the officers of the large organization, the issue is how to enable them to innovate. The Center has a mandate from the Director to function as a catalyst for innovation. On occasion the Center will make connections between idea generators and components or individuals with like ideas and interests. On other occasions, the Center will assist idea generators through the development of business plans, provision of infrastructure (space, staff, funds, etc.) in which to innovate, and representation of the pilots to the large organization's leadership. The Center also assists pilots that have proven their worth transition into the Agency mainstream as a new Agency capability.

Criteria for Selecting Pilots

Innovation pilots are selected based on straightforward criteria: the potential for positive impact on the large organization's mission and relative feasibility based on business plans created with the Innovation Studio.

Once an innovation issue is identified and arrayed withing the innovation framework, the Center will need to decide whether it will enter into a joint venture to incubate the innovation. We have identified three groups of criteria that will help understand the relative merits of a particular proposal:

  • Appropriateness
  • Programmatic Considerations
  • Partner Commitments

As the Center matures its processes, it will want to consider assigning weights to each of these criteria.

First Order Criteria for selecting pilots - Appropriateness

There are two appropriatness criteria:

  • Extent: We want to know toward which end of the innovation scale the pilot resides:
    1. Incremental
    2. Transformational
  • Paradigm: We want to be clear into which innovation paradigm a particular pilot fits:
    1. Strategic
    2. Emergent
Selecting Innovation Pilots, 1 of 3
1st Order Criteria
Appropriateness
Paradigm
Strategic Emergent
Extent Incremental
 
 
 
 
Transformational
 
 
 
 

Second Order Criteria for Selecting Pilots - Programmatic Considerations

There are three programmatic criteria:

  • Difficulty: How hard will it be for the pilot to succeed?
    1. Easy
    2. Somewhat
    3. Hard
  • Time: How long will it take for the pilot to produce results?
    1. Short
    2. Medium
    3. Long
  • Cost: What is the projected total cost of the pilot?
    1. Low
    2. Moderate
    3. High


Selecting Innovation Pilots, 2 of 3
2nd Order Criteria
Programmatic Considerations
Time
Short Medium Long
Cost Low
Easy
Somewhat
Hard
Easy
Somewhat
Hard
Easy
Somewhat
Hard
Moderate
Easy
Somewhat
Hard
Easy
Somewhat
Hard
Easy
Somewhat
Hard
High
Easy
Somewhat
Hard
Easy
Somewhat
Hard
Easy
Somewhat
Hard

Third Order Criteria for selecting Pilots - Partner Commitments

There are two partner criteria:

  • Personnel: We want to know how many people the partner organization is going to devote:
    1. Few
    2. Some
    3. Many
  • Funding: We want to know what proportion of the pilot the partner organization is going to fund:
    1. Little
    2. Some
    3. Most


Selecting Innovation Pilots, 3 of 3
3rd Order Criteria
Partner Committments
Personnel
 Few  Some Many
Funding Little
 
 
 
 
 
 
Some
 
 
 
 
 
 
Most
 
 
 
 
 
 

The Role of an Innovation Center

Mission, Vision, Values, and Goals

Concept of Operations

An Innovation Studio

An Innovation Commercial Space

An innovation.org IT Network

The network would provides an unclassified electronic space to house

  1. an outward facing portal for casual internet visitors,
  2. an entry point our external partners can use to come inside and collaborate with us,
  3. an experimental space in which the IT pilots can do their work,
  4. a home for the the Center's internal corporate IT services, and
  5. a space the Center's staff can use to work from home.


Success Criteria

An innovation center will be successful when . . .

(infused the large organization with a culture of innovation)

(innovation knowledge flows throughout the agency, like a rising tide, which lifts all boats)

Organization

What an Innovation Center is not

It is not the source of all great innovations. These must come from the officers of the large organization.

It does not have money to fund all prospective great innovations.

The Large Organization After an Innovation Center

We expect that at some point in the large organization's future the need for a center to incubate innovation will become obsolete. An innovative culture will have pervaded the large organization.

Unresolved Issues

Strategic Innovation

If we are going to do strategic innovation, we must have

1. a clear concept of operations for the large organization's future, and
2. an accompanying strategic transition plan.

Innovation Plan

Each innovation pilot needs to have plan. We should create a template plan (and know what works), so we can help the innovators capture their ideas in a form that stakeholders can understand. The plan should also include sections that:

  • outline the partnership between the sponsoring organization and Center
  • explain how the innovation will be integrated back into the large organization

Evaluation Criteria

The evaluation criteria for selecting Innovation Pilots need to be more fully developed, to include creating weights for the various criteria.

References





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