Ten Reasons Your Corporate Social Network Should be an Innovation Social Network

by Matthew Greeley

1. Adoption - There is no doubt online communities are valuable and powerful, but there is no value if your community is an empty dance floor. Generic communities based on generic tools, often have no stated purpose and employees or customers don't know why they should go there. Idea Portals are a proven way to get very rapid uptake because there is something in it for the end user. Either participating in the product direction or cutting costs instead of headcount...there's an obvious 'What's in it for me?' and that drives rapid adoption out of the gate.


2. ROI - In today's environment the bean counters are holding the purse strings pretty tightly. So a technology looking for a problem is dead on arrival. However with Innovation we are often talking to our customers about Millions, Hundreds of Millions and Billions of dollars. By connecting the benefits of social networking with the innovation process the ROI is obvious, immediate, quantifiable and large.


3. Innovation is a Social Activity - and can not be managed or automated with older transaction-or workflow-based enterprise software. By allowing individuals to interact with Innovation Management and Measurement is the first true killer app of the social software revolution.


4. Important Stuff Falls Through the Cracks with Horizontal Communities and Platforms - Like stock market bubbles, this is a lesson that has be re-learned with every generation. The instinct to build a one-size-fits-all solution to "capture more of the market" almost always leads to failure. Vendors that focus on specific niches, sub-categories, roles, functions, jobs and even specific tasks as customer is trying to get done - deliver more value, and win out in the end. If your social networking platform is generic, beware, you may be fighting with one hand tied behind your back.


5. Your Company May be Trying to Create a "Culture of Innovation" - Right Now! - Sit in on an executive meeting and the topic of innovation is likely to come up many times. By tying the roll-out of an internal social networking platform to the innovation process you ensure you are aligned with the goals of the company and your budget is less likely to be cut.


6. It's Fun! - How would you like to see all the best ideas your group, department or company has to offer? And all the innovative projects people are working on? By working on these systems, you literally get to see the future of the company as it takes shape.


7. Silo Busting is More Important to Innovation than Anything Else the Company Does - Social Networks naturally break down silos, increase communication and enable ad hoc relationships to form... while that can be helpful in areas such as customer support, it is EXACTLY what is needed in corporate innovation, where the current organizational structure often the culprit stifling creativity and collaboration. Innovation is the killer app for this new paradigm.


8. Innovation Data HAS to be Controlled by the Company - As employees proactively reach for consumer Web 2.0 tools to make their job easier with out approval from the IT department, dangerous data-ownership issues arise quickly. A seemingly harmless employee- or customer user- group setup on facebook can spring a leak in your intellectual property regime. Do you really want the intellectual property rights of your company's latest ideas to be subject to facebook's latest terms of service? Saavy CIO's will be ahead of the curve to set standards for where these types of communities can reside.


9. Inter-Company Collaboration - Many innovation initiatives involve customers, partners or suppliers. An online social network is a great way to have 'facetime' and maintain relationships when you don't see those people every day.


10. It's easy to get started - You don't need to establish an enterprise wide roll-out strategy, to run a group or product-focused brainstorm. If you are hearing "Innovate in a Recession" or "Do More with Less" you can launch your first Innovation Community in a few hours.

Thanks for listening, I'd love to hear your perspective on this. Until next time, Keep Innovating...


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Matthew Greeley is Founder and CEO of Brightidea, the global leader in On-Demand Innovation Management software. Prior to founding Brightidea, Matthew consulted for Wrenchead.com, helping them raise over $100 million in venture funding. Follow him on twitter @brightidea.

Reverse Knowledge Management

by Stephen Shapiro

Last night I went to a seminar. On the whiteboard, the seminar leader drew an oft-used framework:

There are things you "know." - For example, I know I can speak English.

There are things you "know you don't know." - I know I can't speak Chinese.

And there are things you "don't know you don't know." - Obviously I don't have any examples of this.

But it got me thinking. There is one dimension that is never mentioned...

There are things you "don't know you know."

Inside of organizations, there is so much untapped knowledge. To combat this, over the past two decades, companies have invested millions of dollars in knowledge management systems. The objective has been to capture the company's knowledge.

The problem is, the knowledge management databases usually become so large and unwieldy that they are unusable. I can attest from experience that these systems often end up becoming digital piles of untapped information. Finding what you want can be like finding a needle in a haystack. Or, more accurately, it is like finding a specific needle in a stack of needles.

What's the solution?

You might call it, "reverse knowledge management."

Instead of posting knowledge which sits passively in a database waiting for someone to find it, you post your question to your "community" so that it can be answered at the time of need. Of course, asking the world for an answer to your question is not new. Yahoo/Google Answers did this a few years back.

But internally, especially when you have already invested in knowledge management systems, the dynamics can be quite different.

If you are using an internal collaboration tool like InnoCentive@Work, you might find that reverse knowledge management is an unintended benefit. When you have a challenge you want solved, the odds are, someone else within your organization has already solved a similar problem. But you probably don't know who knows the solution or where to find the solution.

Sometimes the solution can be sitting in your knowledge management system... and you don't even know it because it is too difficult to find.

Interestingly, "requests for information" posted on internal collaboration tools are sometimes solved not by the individuals with the expertise, by rather by the knowledge management team. When a question is posted, the knowledge management team masterfully scours their databases to find a solution. The advantage of this approach is that those with expertise in navigating the knowledge management systems do what they do best, thus freeing the rest of the organization to focus on what they do best. And it has the added benefit of breathing new life into your old knowledge management initiatives.

So, what is it that you organization doesn't know what it already knows?

P.S. I have to admit that I am a bit surprised. If you Google "reverse knowledge management" (in quotes) you will see that the only place this term is used on the entire internet is by me.


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Stephen Shapiro is the author of three books, a popular innovation speaker, and is the Chief Innovation Evangelist for Innocentive, the leader in Open Innovation.

Seth Godin, Nobody is Indispensable

by Mike Myatt

There is no shortage of information circulating of late espousing the benefits of making yourself indispensable to your employer. While this mantra has clearly gained some traction, if not actually becoming quite popular, popular thinking does not necessarily equate to sound thinking. Let me be as clear as I can - nobody, and I mean nobody is indispensable. I don't care who you are, what role you play, or what your title is. If you perceive yourself to be indispensable, you are setting yourself up for a very rude awakening. Furthermore, anyone who by design sets out to orchestrate a situation to make themselves indispensable is not operating in good faith. In today's post I'm going to share my thoughts as to why the myth of becoming indispensable is very dangerous thinking to say the least...

A well managed company does not allow itself to become dependent upon the performance of any single individual. Those individuals who attempt to hoard knowledge, relationships, or resources to attain job security should not to be valued or viewed as indispensable, but should be admonished as ineffective and deemed a liability. Corporate talent that cannot be shared, duplicated, distributed, or leveraged is not nearly as valuable as talent that can.

So, where has all this recent self-indulgent, misguided thinking come from? I believe much of it stems from the self-help types that proliferate the concept of self-promotion for self-benefit over the concept of service above self. More distressing is that this concept was recently validated in Seth Godin's new book "Linchpin".

Let me begin by stating that I'm a Seth Godin fan. While I agree with him more often than not, I will from time-to-time find myself shaking my head wondering what in the heck could Seth possibly be thinking? In his recent book "Linchpin", Seth Godin puts forth some great concepts that we should all aspire to. I wholeheartedly agree that each of us should become the best we can be, that our work should become developed and refined to the point where it is viewed as art, and we are seen as the artist behind the masterpiece. So much of what you'll read in between the covers of "Linchpin" is as close to inspirational brilliance as you'll find in a business book, which is why it pains me to have to point out the critical flaw in "Linchpin" that regrettably overshadows the highlights - namely the concept of the linchpin itself.

Seth describes a linchpin as somebody in an organization who is indispensable - who simply cannot be replaced because their role is just far too unique and valuable. Making things worse, he then goes on to say how important it is for all of us to become indispensable, for not to be indispensable is tantamount to economic and career suicide. Encouraging somebody to make the most of their talents and abilities is quite laudable - encouraging them to become indispensable is validating a new level of self worship that I find quite troubling.

In fact, I would go so far as to say that anyone who sets out to make themselves indispensable would be the one committing career suicide for two reasons:

1. Anyone who is "perceived" as indispensable in their current role completely eliminates any possibility of promotion


2. Any good leadership team who finds themselves dependant upon a linchpin will immediately move to mitigate the risk of finding themselves in such an untenable position

It is an organization's ability to collect and convert data into information, turn information into knowledge, and knowledge into an operating advantage that allows an enterprise to effectively address current needs as well as to strategically drive innovation and forward planning. This cannot happen if one person positions themselves as a linchpin. Put more simply, a corporation's employees must be able to acquire knowledge (learning), transfer knowledge (out of the head and into an information system), apply knowledge (from the information system into an actionable event), manage knowledge (execute with focus, timing and precision), and secure knowledge (keep it from evaporating or even worse from walking out the door to a competitor). Let's see if we can bring this issue a bit closer to home for some of you. Ask yourself the following questions:

• Have you ever had a disruption in business continuity because someone who possessed a wealth of experience and/or information retired, quit or was terminated?


• Have you ever lost a deal or had a major operational problem because somewhere in your organization you found yourself dependent upon a single person's expertise and they dropped the ball?


• Have you ever found yourself in the unenviable position of desiring to terminate an employee only to be held hostage by the fear of losing the knowledge that they possess?

While I could go on ad-nauseum with day-to-day operating examples of how a linchpin can adversely affect a business, I think I've probably dredged-up enough painful memories for now. As a CEO or entrepreneur, the fact that you would allow an employee to become indispensable to begin with means that at a minimum you have a lack of transparency and continuity in your organization, and more probably that you lack depth of talent and are weak in process and knowledge management.

How would you answer this question... Is your company talent poor and linchpin dependent, or talent rich or linchpin independent? From my perspective there is a monumental difference between real tier-one talent and a primadonna who thinks of themselves as indispensable. Employees who represent true tier-one talent see themselves as part of the team seeking to make those around them more successful. Contrast this with those primadonnas who are interested solely in their own success without regard to those around them. Any company that bestows a primadonna with recognition as somehow being indispensable, is a company about ready to experience a completely avoidable disaster.

If you want to eliminate unnecessary dependencies, don't allow any individual to create ultimate domain over anything that is considered key or mission critical. Instead create a culture that values transparency, knowledge management, mentoring, coaching, and process. By doing these things you will add both depth and breadth to your organization and increase the overall level of talent across the enterprise. Bottom line... encourage people to be a valuable part of the team, to maximize their contribution to others and the overall enterprise, but under no circumstances allow someone be become the proverbial cog in the wheel.


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Mike Myatt, is a Top CEO Coach, author of "Leadership Matters...The CEO Survival Manual", and Managing Director of N2Growth.

Making Your Organization Understand Open Innovation

A Lesson from General Mills

by Stefan Lindegaard

Changing organizational culture is one of the most difficult tasks when it comes to open innovation. What can you do? Well, General Mills gave a great example at the recent CoDev conference. By sending more than 20 people to the conference, they sent a strong signal - internally as well as externally - that they are committed to open innovation.

I really liked this move and thus I did an interview with Mike Antinone, who is Sr. R&D Manager, Connected Innovation in General Mills Worldwide Innovation Network, in order to get a better understanding on this.


What made you decide to send this delegation to CoDev?

We had two main reasons for sending our GWIN team to CoDev this year. The first was really around team building. We have added several new team members as we expand our global innovation entrepreneur program and we wanted to have some time away from the daily demands of the office to foster an added sense of community.

The second area for us was to collectively learn and leverage the insights and best practices of other open innovation leaders represented at the conference and then create a plan of action to determine how we can best incorporate those insights and practices into our group.


What were the objectives?

We feel great about the progress that we have made with our Connected Innovation program, but we also wanted to put some serious thinking into "Next Practices" - those practices that we will need in the future to drive our program ahead and distance ourselves from competitors. We did not want to just go and listen, take notes, have a quick discussion then go back to our daily routine. Our goal was to create tangible action steps that we would incorporate into our development plans for our program.

We began our preparations about six to eight weeks before the conference. We divided the group into four teams with each team being responsible for a given topic. We chose to focus on three key objectives for our company. These were:

1. Driving profitable growth through Connected Innovation


2. Creating and leveraging more successful partnerships


3. Driving Connected Innovation throughout our company

Each team then created a list of questions they wanted answered about how we as innovation entrepreneurs could dramatically impact the three objectives outlined above. Our goal was to collect as many facts as possible.

The fourth team set up a series of networking opportunities, both before and after the conference to provide stimulus for answers to our questions. Some of those networking opportunities included:

• Smaller match-making events at the conference. We prearranged a series of discussions with conference participants. We met during breaks, at lunch, etc. to engage in a dialog about areas we wanted to advance and grow as an organization.


• Utilization of CoDev LinkedIn site. We posted several questions on the LinkedIn site to gain additional insights and make connections


• We also made sure we had prepared germane questions for each of the speakers to ensure we were tapping into their area of expertise.

Our team stayed in Scottsdale an extra day after the conference ended to have a working breakout session to summarize our key findings and to create an action plan going forward. During this session, we created list of "we-should" statements in our breakout sessions that were then reduced to three major areas of focus for each category as we continue to develop our program.


Which lessons have you learned so far?

It was very powerful to have our entire group at such a stimulating event. We had many opportunities to interact with each other, build on what we heard, and engage thought leaders with differing points of view. The conference provided us with a great opportunity to assess our program, consider new elements and chart a course as we continue our Connected Innovation journey.


Conclusion

I am impressed. Such an initiative can anchor open innovation in your company as it provides a great opportunity to build a common language based on what the team learned at the conference. This can really help develop the next practices of open innovation at General Mills.

Can you talk your executives into this kind of commitment?


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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

Internet Future Driven by User Reputation Scores

by Hutch Carpenter

In a recent interview with EMC's Stu Miniman about the future of the web, I predicted that in 20 years, we'll all have online reputation scores. Little badges, numbers that communicate our level of authority, this sort of thing. And these reputations will have tangible impact.

Three different trends come together at some point in the future to make this happen. These trends have been underway for a while, but come together at some tipping point in the years ahead. Here's a visualization of the trends:


It's helpful to discuss each one, in the context of online reputations.


Rate performance of businesses

eBay, which went public back in 1998, played an important role in socializing the concept of people providing online ratings for online sellers. After we receive our purchase, we rate the seller. The collective wisdom identifies top sellers. Got your eye in that Donkey Kong game? Who are you most likely to trust...?


Amazon picked up on this, once it introduced third party sellers into the mix. You can see the percentage of positive ratings for the different sellers. Personally, I have paid premiums (i.e. higher prices) for the assurance that comes from a higher rated seller.

Yelp has taken this concept of rating a seller, and applied to offline consumer experiences. Want to get a burrito in San Francisco? You're likely to go with the highest rated restaurants.

These ratings make up for our lack of information about various providers of services. One could do a lot of online research, and asking friends, before buying. But these ratings do quite well as shorthand ways of assessing quality. They've made it easy to transact, without knowing someone ahead of time.

The rating ethos is expanding. On Facebook, you can 'like' people's entries. We 'love' music on Last.fm. We 'favorite' tweets. We 'digg' and 'buzz up' stories. Implicitly, we provide ratings when we share content via different social networks. Online engagement allows for this.


Migration of transparent work and information online

I found this recent Kaiser Family Foundation study fascinating. The amount of time kids spend online - smart phone, computer, television or other electronic device - is now at an all-time high. There's no denying this: future workers are going to be more accustomed to online engagement and information-seeking than any generation before. It's their lifestyle:


More generally, an important distinction from the web of the 1990s and early 2000s is that we aren't just reading and transacting. Individuals are providing the content. More every day, in fact. We have transferred some of the engagement and contributions from the offline world online. Actually, we're probably creating more content than we ever have,

For workers, the growth of Enterprise 2.0 continues. A key outcome of that? More and more work is making its way online. When it's available there, and not just in a Word document on the hard drive or email in an inbox, it's findable and usable by everyone. Your colleagues know quite well what the quality of your work and contributions are.

Do you think all of this stops, and we go back to message-relaying marathoners, smoke signals and carrier pigeons? No. Enterprise 2.0 and social media will continue their growth apace. And increasingly, this time spent online is through social media.

More and more people will be publishing their work, their ideas, their knowledge, their conversational bits, their creativity... online. It's just going to keep increasing.


Rely on social media for information

An emerging trend is the transition of where we seek information. Remember libraries, magazines and microfiche? Then the 1.0 websites where we got information? Then the portals that aggregated information from major media sites? Then search augmented all this information consumption?

Well, the next wave is to rely on our social connections to deliver interesting, relevant information to us. As was famously said by a college student in 2008:


"If the news is important, it will find me."


A recent Nielsen study confirms this growing tendency to use social media as a first stop to find information:


Admittedly, the leading social sites of today - blogs, Facebook, Twitter - have a ways to go before they become a large percentage of the population's first choice. And it'd help if Twitter could get their search working further back than a week or two.

But this survey and anecdotal evidence points toward an increased reliance on others to provide information to us.


Putting this all together

It's that last trend, still early in its cycle, that really points toward the development of formal, online reputations. When we started transacting online with complete strangers or small businesses we never knew, we needed a basis for understanding their credibility. It turns out, crowdsourced ratings are excellent indicators of quality. It also causes small businesses to be aware of the quality of their products and services.

In the years ahead, expect increased usage of social media for getting information and sourcing people, products and services. As an example, research firm IDC just released these survey results:


"57% of U.S. workers use social media for business purposes at least once per week. The number one reason cited by U.S. workers for using social tools for business purposes was to acquire knowledge and ask questions from a community."


As reliance on people for information increases, expect an increased need for knowing which strangers provide the top quality information. Note I said "strangers" there. One thing we will continue to do is to rely on our "friends" (social media sense of the word) for ongoing daily information. The people we connect with on the various social sites.

But that's the only way we will get information. Or make decisions. Great case in point? Google's real-time search results:


If innovation is the focus of your work, wouldn't you want to be included in those Google results? Here's the thing. Google doesn't just put any old tweet or other form of real-time content in there. As Google's Amit Singhal stated:


"You earn reputation, and then you give reputation. If lots of people follow you, and then you follow someone - then even though this [new person] does not have lots of followers, his tweet is deemed valuable because his followers are themselves followed widely," Singhal says. "It is definitely, definitely more than a popularity contest," he adds.


Note his words: "You earn reputation."

PR agency Edelman created a ranking algorithm called Tweetlevel, which analyzes people on the basis of influence, popularity, engagement and trust. Tweetlevel was recently used to create a list of the top analysts on Twitter. As the author of that post noted, one purpose for the list was to answer the question: "Should they spend their limited time interacting with analysts via twitter?" Presumably if you're an analyst in the Top 50, 'yes'.

Again, reputation being used for a defined purpose.

Ross Dawson wrote a good piece about the changes coming due to the increasing visibility of "people's actions and character." He notes the impact of reputation on seeking professionals for work:


"Many professionals will be greatly impacted by these shifts. The search for professional advice is often still highly unstructured, based on anecdotal recommendations or simple searches. As importantly, clients of large professional firms may start to be more selective on who they wish to work with at the firm, creating a more streamlined meritocracy.

The mechanisms for measuring professional reputation are still very crude, yet over the coming decade we can expect to see substantial changes in how professionals are found. This will impact many facets of the industry."


And Bertrand Dupperin sees a similar dynamic playing out internally:


"Use internal social networks to build a kind of marketplace that would put work capacity and competence on a given subject in relation with needs and allow those who can apply for an assignment instead of blind assignments to those who can't."


In a world where individuals emerge as important sources of information, products and services, people will need a way to break through the limited knowledge they'll have on any one person. Look for online reputations to emerge as a way to fill that gap.


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Hutch Carpenter is the Vice President of Product at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.

Innovation Training & Coaching - Overlooked?

by Robert F. Brands

Smart companies often pride themselves on training programs that introduce or enhance employees' knowledge of corporate business practices. They promote mentoring initiatives that pair seasoned execs with rising talent. They create booklets or PDFs on corporate policy - and implore staff to read them.

But introduce a business innovation initiative, and those involved are expected to just know how things are done. They're supposed to possess some innate awareness of the concepts, the best practices, the goals, milestones and targeted end-game.

It doesn't work that way.

Innovation is a learned concept. Training and coaching is the forgotten imperative in the process of innovation. For best practices in the pursuit of innovation have to be shared to be learned - and mastered.

From the Chief Innovation Officer (CIO) to the innovation team to rank-and-file employees who will implement, follow through or carry forth on the fruits of innovation, people don't just know. They're taught.

Organizations whose teams are not trained and coached in its unique approach to the imperatives of innovation are destined to amass a litany of failed projects.

For example, a major multinational launched a new Innovation initiative with the hopes of turn-around renewed profitability and growth. After much initial excitement and visibility, expected results did not materialize - and in the turn-around world, false starts are more costly for an organization than starts or restarts.

What happened? The team involved basic project management training. After a course of such training and coaching, associates had gained a common language and understanding. Progress was realized, and the company today remains on a growth path.

Training and coaching is vital to transmitting the organization's unique approach to innovation - and ensuring people adhere to its practices. Proper hiring, training and coaching is the way to create, reinforce and enhance company culture and mindset. At its root, training and coaching introduces people to the organization's vision, mission, strategy and objectives, and points everyone's compass toward True North.

Training and coaching should cover the lot - from the unique way ideation is treated, to the unique way ideas are cataloged and approached; teams are inspired, formed and managed; risk is assessed; new product development is explored; ownership is encouraged; value is created; accountability is attached; metrics are observed and measured; net results are rewarded; and yes, how teams are trained and coached.

Training and coaching is developed and delivered on a continuum. No sooner are existing policies and best practices discussed, then new procedures are introduced to further the organization's pursuit of innovation.

Continuity is the key. Training helps your team constantly improve its skill set, through new techniques in ideation, process experience and intra-organizational communication of best practices. Ongoing reinforcement helps employees understand their place and aspire to greatness on the New Product Development team (whether that "product" is a product, a service or an internal practice).

This goes beyond the team. Trainers and coaches need continuous training and coaching, as well. Even the CIO at times requires training and coaching on evolving corporate innovation practices.

Alas, training and coaching often is lost or last as companies often believe they have little time and money to fund these efforts. Best of breed companies have earmarked a dedicated budget to training and coaching.

Why? Because they realize the downside of not training - and retraining - their people in the process of innovation is to be mired in mediocrity.

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Robert F. Brands is President and founder of Brands & Company, LLC. Innovation Coach Robert Brands has launched a new site - www.RobertsRulesOfInnovation.com - to complement his upcoming book.

Building Up Innovation Capital

by Rowan Gibson

As usual it was Peter Drucker, the godfather of modern management, who said it first. Right back there in 1966 (!), in his landmark book "The Effective Executive", Drucker argued that companies would need to build a new kind of organizational capital as the industrial economy gave way to the knowledge economy. His famous proclamation was that, in future, brainpower would be a more valuable asset for wealth creation than factories and financial clout. All of which came true, of course. But that was not the end of it. Now, over four decades later, we are once again challenged to rethink organizational capital as we make the transition from a knowledge economy to an innovation economy. And that creates a new agenda for every single company.

For most of the last century, as well as the previous one, we looked at companies as if they were comprised of only two kinds of capital: financial and structural. Financial capital obviously refers to a company's balance sheet. Structural capital is the value of its physical assets - its networks, facilities, warehouses, plants, inventory, and so on. Thus, if we had gone back and spoken to the super-rich industrialists and financiers of the late 19th and early 20th century - such as Vanderbilt, Rockefeller, Carnegie, and Morgan - they would have told us that this was the only way to measure the worth of an enterprise. Move forward a few decades and the same would have been true if you had talked to great business builders like Henry Ford, Alfred P. Sloan, Thomas Watson Sr., or any of their corporate accountants. What counted back then was the tangible stuff that is easy to quantify and monetize on a financial statement.

In the 1980s and 1990s, that began to change. In large part because the stock market value of companies was beginning to get out of all proportion to the "book value" of their physical assets. Microsoft, for example, had an almost 8-to-1 ratio of market value to physical assets value. And when Philip Morris bought Kraft in 1988 for $12.9 billion, the "hard assets" of the firm were calculated to be worth only $1.3 billion. That means Philip Morris was paying a full $11.6 billion - or 89.9% of the transaction price - for "other stuff" that wasn't even on the balance sheet: intangible stuff like brand equity, marketing capability, and so on.

British futurologist Hugh Macdonald coined the phrase "intellectual capital" to describe these intangible assets. He defined it as "knowledge that exists in an organization that can be used to create differential advantage." And in a seminal article in Fortune magazine in 1991, Thomas Stewart wrote that "every company depends increasingly on knowledge - patents, processes, management skills, technologies, information about customers and suppliers, and old-fashioned experience. Added together this knowledge is intellectual capital."

From then on, we had three forms of capital - three basic kinds of assets - with which to measure a company's worth. But in a new, innovation-based economy, where value-creation is the new Holy Grail, the way we define, measure and manage organizational capital is again woefully incomplete. In 2001, strategy guru Gary Hamel argued that financial, structural and intellectual capital, by themselves, do not create new wealth. And I agree with his astute observation. Think about GM. If any company on earth ever had huge amounts of money, massive dealer and supplier networks, giant manufacturing plants, countless technological patents, well-oiled management processes, tons of customer information and decades of industry experience, it would have to be General Motors. Yet where is GM today? In effect, all of those assets have proven to be almost worthless in terms of creating new wealth.

Hamel's view is that the three traditional forms of capital are largely inanimate. In today's competitive era, they need to be animated or catalyzed by three new kinds of organizational capital if we want to translate them into wealth. He calls these "imagination capital", "entrepreneurial capital", and "relationship capital", all of which are different forms of human capital.

Consider the first one. Most companies would tell you that knowledge is a critical resource. Many large organizations have internal KM efforts aimed at sharing information and experience across the firm with a view to continuous improvement. But in a world where the pace of change has gone hypercritical, we're finding out that success has less and less to do with learning from the past, and more and more to do with imagining future opportunities. Knowledge has become a commodity. Let's face it, you can go online and find out almost anything with just one or two clicks. So the issue is not how much you know but how creatively you can leverage what you know. Today, the advantage increasingly goes to those firms that develop "imagination capital" - which is the capacity to dramatically reconceive what the firm is and imagine entirely new uses for its financial, structural and intellectual capital. Einstein's oft-quoted reflection that "imagination is more important than knowledge" becomes the mantra of the innovation economy.

Second, companies need to develop their "entrepreneurial capital", which means building the entrepreneurial spirit into many, many employees across the whole organization, not just in an incubator or some new venture division that exists out on the periphery of an otherwise orthodox company. It's about creating a cultural environment where the entrepreneurial spirit is everywhere; where ordinary employees can have the courage to experiment and try something new, where they can get unfettered access to the financial and human capital they need to push their ideas forward.

The third of these new kinds of capital is "relationship capital" (or what I would call "network capital"), which refers to the connections a company can make between previously isolated people, ideas, resources and domains - both across and beyond the organization. Innovation is so often about spotting the opportunities that come from recombining and blending all of these ingredients. The quality of a company's network of relationships - its ability to connect with individuals and organizations that have very different skill sets and capabilities - is becoming more and more critical to its own capacity to innovate.

Here's the sad reality: most companies don't have a clue about how to support
the development of these new forms of capital. So the challenging agenda for
organizations around the world will be to think about exactly what it takes to
build, measure, manage and exploit what amounts to their "innovation capital" - which is so essential to creating wealth in our times.

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Rowan Gibson is widely recognized as one of the world's leading experts on enterprise innovation. He is co-author of the bestseller "Innovation to the Core" and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

Human Capital x Social Capital = Productivity and Innovation

by Meri Gruber

As a culture we like to think of our achievements as the triumph of the individual. But last week I used a memorable chicken breeding example to show you that group performance outweighs individual performance in a group environment because a focus on individual performance comes at a cost to the group performance.

The reality is that company performance is a complex group effort. Without positive group productivity, companies under perform. And most companies under perform. We are used to seeing numbers like 90% of companies fail to execute on their goals, that excellence in business execution is the chief concern of CEO's. What's going on here? "Companies assume people are atomistic and economic, versus social creatures", writes Stanford professors Jeffrey Pfeffer and Bob Sutton in "The Knowing-Doing Gap, How Smart Companies Turn Knowledge into Action."

There are two things going on here that get in the way of group productivity, two deeply held organizational operating assumptions that are completely out of sync with reality. The first is that company performance is atomistic. The atomistic model assumes individual control and that company results are the consequence of individual decisions. The second is that individual performance is motivated largely by extrinsic, (financial) rewards based on individual performance." Companies operate on oversimplified or incorrect models of human behavior relevant to shareholder (short term) interests, irrelevant or counterproductive for ultimate success of the business."

In "Managing the 21st century organization", Valdis Krebs of orgnet.com reminds us that what you know (human capital) multiplied by who you know (social capital) creates productivity and innovation. Traditional company hierarchies have an up-down formal information flow: you report up the chain, you receive information down the chain. But to actually get your work done, you tap into the organization sideways so to speak, leveraging your informal contacts across the company.

Research sited by Krebs found that "the ability to reach a diverse set of others in the network through very few links was the key to success for both individuals and teams." We know this from our own experience. A good networker gets more stuff done because companies are not atomistic, they are complex group environments. So if you think about it, with the exception of the few jobs in the company that don't interact with anyone, you should be interviewing people for their social skills, not their functional skills.

We might be done there, but we're not. Because relying on social skills and ad-hoc networking is terribly inefficient and capricious. And all too often, it is down right discouraged by performance targets that misunderstand human motivation and pit employees against each other in an endless game of internal competition. At a recent TED talk, Dan Pink, author of "A Whole New Mind, Why Right Brainers will Rule the Future", made the case for businesses to rethink their "business operating system":


"There is a mismatch between what science knows and what business does. And what worries me, as we stand here in the rubble of the economic collapse, is that too many organizations are making their decisions, their policies about talent and people, based on assumptions that are outdated, unexamined, and rooted more in folklore than in science. And if we really want to get out of this economic mess, and if we really want high performance on those definitional tasks of the 21st century, the solution is not to do more of the wrong things. To entice people with a sweeter carrot, or threaten them with a sharper stick. We need a whole new approach."


Innovation and productivity doesn't happen by carrot or stick, it happens through connectivity. What Pfeffer and Sutton found was that "firms where measurement helped measured things that were core to their culture and values and intimately tied to their basic business model and strategy, and used these measures to make business processes visible to all employees."

To close the group productivity gap and foster innovation, enable and empower connectivity in your company. This requires you to revisit your assumptions about company performance and individual motivation. So before your write "superstar wanted" in you next job tweet, read the chicken story one more time. Hopefully you will come to realize that "super collaborator" is what you really need. And before you start your quarterly/annual performance goal setting process, listen to Dan Pink's TED talk one more time on what really motivates and stimulates the kinds of creative solutions you need today.

Finally, think about group productivity as part of an overall business execution platform. The mindful implementation of Enterprise 2.0 emergent social software platforms and performance management solutions are components of a connected company, and a connected company outperforms its peers. What does this kind of emergent business execution platform look like? Stay tuned.

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Meri Gruber is a leading expert on business execution. She blogs on the intersection of innovation and business execution at www.competingonexecution.com

Are You Thinking Ahead of the Curve?

by Robert B. Tucker

The other day in Cincinnati I met Filippo Passerini, Procter & Gamble's Chief Information Officer. Fascinating guy. Ph.D. in statistics from the University of Rome. Father of three. Technical mountain climber. And the toast of his organization right now for what he and his troops have been able to accomplish.

Passerini was the driving force behind Procter's radical revamping of its entire back office operations. The move obliterated $1.2 billion in costs from P&G. It enabled the consumer products giant to respond quickly to the Global Economic Crisis, and bring new products to market faster than ever.

So how does Filippo unwind after routinely putting in 60 hour weeks? He plays chess. "Thinking what your opponent will do three moves out is good discipline for business," he told me in a thick Italian accent.

Filippo is the perfect illustration of an important innovation skill -- thinking ahead of the curve.

"It was our reading of trends that led us to make this move," he explained. In frequent open-ended brainstorming sessions, he and his core team of five saw that the world was shifting. It was moving from 'big is good' to 'flexible is good' to 'network is good'.


"Fifteen years ago, if you were a big company, that was a competitive advantage. Then flexibility was the way to achieve it. But we saw that over the next five years the network would become more and more important."


What to do?

Passerini's vision was that the entire company should operate from one consolidated, integrated global services network. He and his team assaulted the assumption that the way P&G handled back office functions like finance and accounting, HR, facilities management, and IT was good enough. They knew it was riddled with duplication and waste. So they set forth to build a new unit -- Global Business Services - to take over and consolidate all such operations.

Today, 'shared-services centers' in Costa Rica, Manila and Newcastle, England, provide networked support around the clock to P&G operations everywhere. All non-strategic activities have been outsourced to outside vendors. And Passerini and his group have 'decommoditized' themselves (his word) from being internal service providers to become strategic partners to the organization.

In researching a forthcoming book, I've been interviewing dozens of high output managers like Filippo Passerini. They don't try to predict the future, which is impossible. But they do make it a priority to spend time thinking ahead of the curve.


"One of our pillars is thinking out in the future and anticipating what is coming and then making your move. It's so much better than reacting."


Innovation-adept leaders like Filippo Passerini don't just gather better intelligence. They creatively crunch this data, argue about it, debate its implications, and try to connect the dots in some meaningful fashion. They seek to arrive at a point of view, both individually and collectively, about how to turn today's rapid changes into tomorrow's opportunities. And then they take action.

How are you "sussing out" (as the British say) the trends in your market and in the wider world? What's new in your information diet that's stimulating your thinking? What trends, emerging technologies and developments are you doing deep dives on to gain a knowledge edge?

"I manage my life like a chess game," Passerini told me as I was leaving. "I still continue to study the trends every day."

Not bad advice for all of us.

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Robert B. Tucker is the President of The Innovation Resource Consulting Group. He is a speaker, seminar leader and an expert in the management of innovation and assisting companies in accelerating ideas to market.

What is Innovation Management?

"Innovation 'Management' as a term, doesn't sit well with me. Just like Knowledge 'Management'. KM failed in part because of the inherent controls."

Sameer Patel, April 22, 2009


by Hutch Carpenter

I thought this was a good comment by Sameer, as it reflects a couple things:

• Nascent field of technology tools that specifically facilitate and improve corporate innovation is just becoming understood


• Concern that the unpredictable and rough-edged aspects of idea generation will be smothered by ham-handed managerial controls

Seeing what's happening with customers at Spigit, I can safely say that the field of innovation management is much richer and collaborative than the term might connote. It's not so much 'control' management as it is 'optimization' management. It's a recognition that companies have significant margin for improvement in their innovation processes and outcomes.

With that in mind, I wanted to put forth eight elements that help describe 'innovation management'. This list is by no means exhaustive, but it should give you a feel for what the field is about today.


#1: Innovation benefits from a range of perspectives

For most of our industrial history, innovation has been the province of an internal R&D team. Those smart geeky types who labored to create the next generation of products for big concerns. Fast forward to where we are today. With the rise of the Information Age, more people have a knowledge-based relationship with their employers.

Contributing what you know has become the dominant part of work in Fortune 2000 companies. Leveraging this trend into the innovation realm is a natural extension of employees' work. And indeed, once done, it becomes apparent that so-called 'line workers' have a lot of valuable knowledge, experience and ideas as well. You don't need an advanced degree to understand a glaring customer issue or a better way to manage field operations.

Studies show that exposing ideas to a wider range of perspectives significantly improves them. In terms of management, the change for companies is elevating the importance of sourcing ideas from throughout the enterprise, as well as outside of it. One example: in this video on how it approaches innovation, Pfizer notes that "Ideas aren't just sitting at headquarters. There are fantastic ideas all over the company."


#2: Four of the most damaging words an employee can say: "Aww, forget about it"

Ideas come in various forms: disruptive, product and operational. And they hit employees at varying times as they do their work. Sure, a lot of these ideas won't be feasible. But a lot will.

The problem for companies is that employees self-censor, either because (i) culturally they're not encouraged to post ideas, even potentially bad ones; or (ii) there's no way to easily capture these.

The recognition that there is valuable intellectual capital in the ideas that emerge from employees' knowledge and activities is core to improving corporate innovation. Changing organizational focus to foster more ideas from all quarters, and providing the resources to capture these are core to what innovation management means.


#3: Create a culture of constant choices

Jim Collins spoke recently at the Front End of Innovation conference. A key theme from his speech was that great companies enable constant choices. By this, he means that external markets are constantly changing. Companies that are maintaining a good velocity of ideas are the ones that succeed long-term in industries.

This is actually a pretty significant cultural dynamic. Companies can be quite adept at execution, and throwing choices in front of everyone can disrupt that strength. So figuring out 'their way' to create a culture of constant choices is really the hard work.

This is part of what is meant by innovation management.


#4: Looking at innovation as a discipline

Innovation is a Top 3 priority for companies, reports Boston Consulting Group. Indeed, BCG notes that innovation leaders generate 430 basis points more in shareholder returns than do average companies. So how does a company systematically address innovation as a discipline?

Companies apply resources and attention to a number of other disciplines: sales, customer relationship management, supply chain management, managerial accounting, etc. Looking at innovation from a similar perspective is emerging as an important strategy.

A number of large corporates have established internal innovation-focused executives. These aren't employees who are supposed to dream up all the ideas. Their work is on establishing innovation as a discipline. Their charge is wide-ranging, including HR, executive attention, focus areas for innovation, internal communication, processes and selection of technology to facilitate. While I wasn't around in the rise of the CRM era, presumably there was similar work by earlier generations of employees.

The work of making innovation a discipline is part of innovation management.


#5: Focus employees' innovation priorities

Each of us knows a lot. From a variety of activities and interests. Work. Hobbies. Family. Locale. Life. I'll bet you come up with ideas and encounter problems to be solved for a wide variety of things.

For corporations, this wealth of experience is an asset, but it does require some tuning. For ideas, you never know when someone's personal church activities might have relevance to a product idea for the company. You want that variety of perspectives to inform and improve ideas.

At the same time, there needs to be a channeling of where employees' ideas are focused. If executives don't lay down directional areas for innovation, employees' time on innovation will not be as valuable as it could be. Of course they're going to have a range of ideas. But which ones are most pertinent to the company's success in the market?

Channeling employees' innovation focus is part of innovation management.


#6: Recognizing innovation as a funnel with valuable leaks

When one views innovation as not just game-changing disruptive ideas, but including incremental ideas, it becomes clear that innovation is fundamentally a funnel. Start with a large, ongoing quantity of ideas drawn from employees, customers and partners. As discussed in #2 above, you really want to get as many of these ideas as you can.

Ideas must then go through a winnowing process. Some will get stronger, and advance to projects. Some will fall away as not feasible.

And from all this intellectual activity around ideas, new ideas will emerge. It's natural. Once employees are in the mode of generating and assessing ideas, it nwill be natural for new ones to emerge. Really, this arguably is the case for a lot activities that foster interaction among employees. But in this case, the social object around which they're interacting is an idea. In terms of instilling a culture of constant choices, interaction around ideas promises to be a key part of achieving that.

Managing the funnel is part of innovation management.


#7: Establishing a common platform for innovation is a revolutionary step forward

Consider how employees innovate today. You have an idea, what are you going to do with it? Certainly you'll sound it out with peers, which is illustrative of the fact that innovation is a social activity. Then what? Tell your boss. Email it. Enter it into a customer service database. Put it in a PowerPoint. Try to schdule meetings.

When you consider what employees must do today to move an idea forward, it's really pretty daunting. Under this system, corporate innovation requires phenomenal acts of heroism to get anything done. Ad hoc, siloed applications make companies the poorer for the ideas they're missing. Existing idea management processes don't allow cross-enterprise visibility, which means collaboration among interested parties is limited. An unfortunate outcome is that the pace of innovation falters as ideas lose share of mind.

Creating the common community space for innovation is a dramatic leap forward in how companies foster innovation. The same mechanisms of departmental outreach and email are certainly still available. But now, ideas can get an audience of thousands, allowing them tap different reservoirs of experience and perspective. Senior executives csn see ideas that previously would languish in lower levels of the organization.

Creating this common platform is part of innovation management.


#8: Innovation must be more than purely emergent, disorganized and viral

Innovation management today draws heavily from the themes of Enterprise 2.0. Key to the power of social computing is letting employees' activities and knowledge apply itself naturally where it's needed throughout an organization. For purists, this means get rid of oversight and managerial prerogatives.

To create ongoing, sustainable innovation, there needs to be a programmatic approach. Riding the pure emergent form of Enterprise 2.0, or continuing the current ad hoc, siloed approaches to idea management, is insufficient. Employees will be busy with projects and tasks they need to execute. Perhaps culturally, innovation hasn't been a focus. There will need to be a push to raise the awareness of innovation. And some organization to channel it where it's needed.

There will also be ideas that are valuable, but which may not resonate with a broader section of the employee base. Leaving the emergence of these ideas purely to viral dissemination means leaving some of them buried at the departmental level. Companies need ways to ensure valuable ideas are caught and surfaced systematically.

Combining bottom-up emergence with top-down priorities and organization is part of innovation management.


Wrap-Up

As I said above, innovation is a multi-faceted activity, with many moving parts and ways of approaching it. What I've listed here represent my way of clarifying what the field of 'innovation management' is about. If you think I'm off or missed something, let me know in the comments below.

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Hutch Carpenter is the Director of Marketing at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.

Which comes first? - Innovation success or culture?

by Jeffrey Phillips

Many strategic challenges have a "chicken or egg" quandary. In the case of the chicke and the egg, which comes first? Clearly you can't have a chicken if the chicken didn't come from an egg. But you can't have an egg if it didn't come from a chicken. Quite a conundrum. Ranks up there with Schrodinger's cat and other notable thought experiments.

The chicken and egg question has parallels in innovation, especially when firms consider how to get started. The dilemma the firms face is: do we work on creating an innovation culture before attempting innovation, or do we start with smaller, more tactical innovation activities that will allow us to build up innovation knowledge and experience that can be transferred to the culture? Here's a couple of things to ponder while considering the tradeoffs.

First, anyone, anywhere can brainstorm or generate ideas. That does not make them "innovative" and one brainstorm is not necessarily repeatable or sustainable. However, that may be the best first step for many firms, only comfortable with small, trial steps. However, what many firms find once they've generated ideas is that there is no sustaining process or procedure for managing ideas, and the "day job" is more compelling. Cultural roadblocks often stymie further pursuit of ideas.

Second, building a culture is hard, but changing a culture is very difficult. In any existing firm, there are norms and expectations that have been built over time and reinforced in the way people work and how they are compensated. Changing a firm's culture does not happen overnight, and many executives recognize this. So, there's yet another rationale for trying a "quick and dirty" innovation project rather than trying to implement longer term change.

Third, building a culture of innovation requires a vision. You can't simply wave a wand and expect the culture to change - it can change, but it must change based on some shared concepts and vision. Executives have to define a very clear rationale for the change and present the end state. This requires commitment and good communication skills over a long period of time. Again, since we manage today with a stopwatch rather than a calendar, time is of the essence, and quick wins are preferred to methodical changes.

So, in many cases we are left with two alternatives, neither of which seem to have positive outcomes. On one hand a firm can innovate with small projects and programs and attempt to overcome cultural issues as they arise. Often they will find that the culture doesn't reward people who take risks and who propose programs that are different from the status quo. On the other hand, a firm can start working on the culture and begin changing the expectations before launching innovation programs, but this is time consuming and most executives don't have the patience for such efforts.

Probably the best approach is to run the changes in parallel. Start working on cultural change while enacting a series of small innovation programs. Build on the successes and use any failures as opportunities to reinforce the cultural change. Expect that any effort to change the culture will take several years. However, if you can successfully influence the culture, the innovation possibilities are incredible. Culture is the biggest roadblock to innovation, but once overcome, it can be the stimulus and propulsion for innovation.

In the case of innovation activities versus innovation culture, don't think of these as tradeoffs but as activities that should, probably must, be done simultaneously if you want to build a long term, successful innovation capability.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Keeping Innovation Ideas Flowing

It happened a few months ago, when I was meeting with some people from one of the world's leading consumer goods manufacturers. This is a company where you would expect innovation to have been honed down to a fine art because it has launched a slew of successful innovations over the course of its long, proud history.

But these executives candidly admitted they had a problem. They had started an initiative to solicit ideas from across their organisation. It started well in the first year, slowed down in the second and was almost at a standstill by the third. Like the parents of a delinquent child, they asked "Where did we go wrong?" and it didn't take me long to find the answer.

It's quite typical these days for companies to set up an online suggestion box and ask their employees - perhaps also their customers - to send in ideas. The reason these initiatives tend to start with a bang and then dwindle down to nothing is that most people already have one or two ideas in their pockets.

They may even have been kicking them around in their heads for some time. So the minute somebody asks for suggestions and offers an incentive for submitting them, all those would-be innovators come out and post their ideas.

But soon after this low hanging fruit has been picked and processed, a company usually finds that less and less suggestions are coming in despite the fact that the same incentives are being offered and management continues to beat the innovation drum with the same intensity.

Here's why: people find it far easier to submit ideas they already have than to go through the intellectual work of coming up with new ones.

Don't get me wrong. I'm not against electronic suggestion boxes or idea management software per se. Indeed, one of my key messages is that companies should involve as many minds as possible - inside and outside the organisation - in their innovation efforts. So, essentially, these platforms are a good thing.

The reason they so often fail is that they are way too passive. They simply sit there waiting for lightning to strike. They don't do very much to create the conditions that produce the lightning in the first place.

They don't trigger innovation by inspiring people with new insights and perspectives. They don't train people how to stretch their thinking along new lines. They don't create a thick matrix of connection and conversation between many different voices. And they don't guide would-be innovators on how to turn a wild idea into a concrete business plan.

If you cling to the notion that innovation is something enigmatic and ethereal and that an electronic suggestion box will somehow just pluck ideas out of the ether like a radio antenna, your innovation efforts will not get very far. Instead, you need to build your idea collection system on a deep understanding about how the innovation process actually works.

To put it simply: big ideas are born from breakthrough insights. Go back and look at any case of successful business innovation over the last few decades and you will invariably find that it was about challenging conventional wisdom about how things are done or recognising the power of some nascent trend to upend an industry or leveraging some competence or asset in an exciting new way or discovering some deep, unarticulated customer need.

These kinds of insights are the raw material out of which radical innovations are built. So it follows that, if we want people to continually come up with powerful new ideas and growth opportunities, we have to continually inspire them with a constant stream of fresh, strategic insights.

Indeed, we have to teach them to discover such insights themselves by giving them the right thinking tools and training them to use them. We have to show people how to use eye opening insights to generate eye popping innovations.

One company that has done this highly successfully is Whirlpool, the global appliance manufacturer. Instead of just setting up a passive electronic suggestion box, the company established a sophisticated IT infrastructure several years ago called 'Innovation E-Space' which is open to anyone at Whirlpool who has intranet access.

With just a few clicks, Whirlpool employees can look for inspiration by perusing insights captured on the system, they can use these insights to spark new thinking, they can submit their own ideas and insights, they can build on existing ideas, they can follow an online tutorial on how to turn ideas into business concepts and they can find innovation coaches and mentors in their region who can help them organise seed funding for their ideas.

Whirlpool also instituted a leader led training process (like GE's Work-Out) aimed at enabling their people to continually apply the system to their own jobs.

Over the last five years, Innovation E-Space has had hundreds of thousands of hits from Whirlpool's employees worldwide and has become indispensable to the way people share ideas, learn together and collaborate on innovation projects in the company.

Rather than starting out with a torrent of ideas and ending up with a trickle, the system has gone from strength to strength and has been instrumental in making innovation a daily reality at Whirlpool. Most importantly, it has also helped the company add billions of dollars in innovation generated revenue to its top line.

As for the organisation I mentioned at the beginning, I told them they would have to do much more than just ask for ideas and then sit back and wait for them to come. In fact, I recommended that they take a good look at Whirlpool. And if your company is facing a similar struggle to maintain the momentum on innovation, you might want to do the same.

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Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation.