An Innovation Manifesto

by Tim Kastelle

There have been a few before, but here's another Innovation Manifesto:

1. Innovation doesn't need a manifesto - it needs action.


2. We won't wait for someone to give us permission to innovate - we'll just try things out.


3. Innovations have a life-span - we will try to execute ideas that last, and that make things better.


4. Not-Invented-Here is not for here. We will execute the best ideas we can find, regardless of where they came from.


5. Innovation is a process of flow - we generate ideas, we select ideas, and we execute ideas. Since the last two are the parts that most people aren't good at, those are what we'll concentrate on.


6. We will build fast prototypes, and iterate rapidly instead of trying to make things perfect from the start.


7. We will find small, inexpensive ways to test our ideas.


8. We will learn from the ideas that don't work.


9. We will scale up the ideas that do work.


10. Innovation is the best way to enact strategy - we will keep the two aligned.


11. Innovation happens in networks - we will understand ours as well as we can, and build them to facilitate innovation.


12. Innovation is not invention - we will focus on making ideas work, not just having them.


13. New ideas have to become embedded within the economy - we will build new networks for our great ideas, and put them within innovative business models.


14. We know that innovation is the best way to keep our jobs interesting - we want to avoid this:


15. We will not complain, we will instigate change.


16. Our strategy and our brand are built by what we do every day, not by what we say. We will use innovation to build both.


17. The purpose of innovation is to help our customers and to make the world a better place. These are our primary evaluation criteria. (from Graham Horton)


18. We realize that the approach to innovation depends on the novelty of the idea. (from Ralph Ohr)


19. Eliminate habits, that is the beginning of innovation. Both with risk & fun. (from Marion Popiolek)


20. We will inspire others and bring them on board because innovation is a team sport. (from Jorge Barba)

So. Who's with me?

What would you add?


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

---

Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

Olympic Innovation

by Tim Kastelle


"The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function." - F. Scott Fitzgerald


That's the quote with which Richard Lester and Michael Piore open their outstanding book "Innovation: The Missing Dimension." The opposing ideas that they discuss throughout the book are interpretation and analysis. They argue that both are necessary components of innovation, but that they require completely different skills and mindsets to manage. Here is how they describe the issue:


"In new product development, interpretation and analysis exist in perpetual tension. This tension is inevitable and unavoidable, and we believe it is the central management problem that innovative businesses must confront. The tension... springs from many sources. Interpretation proceeds through conversations over time - within and among the various communities that contribute to new product development and between the designers and the customers who use those new products and incorporate them into their lives. Analysis, on the other hand, takes place 'outside of time' - at the point when a product must be optimized according to well-defined and articulated objectives."


This line of thinking is very similar to the argument that Roberto Verganti puts forward in "Design-Driven Innovation" - and I'll talk about those links later this week. Today, however, I want to use this dichotomy to talk about another perpetual question that arises every four years:



Here's an idea: sports where there is an unequivocal winner, like skiing and ice hockey, are primarily analytical, while the judged sports are primarily interpretive. As a consequence, they have different forms of innovation, and it explains in part why they seem so different to us.

In the analytical sports, who wins is reasonably straightforward. If you get down the mountain fastest, or skate the fastest, or score the most goals, you win. In these sports, the problems are well-defined, and most of the innovations are primarily equipment-based. The well-defined problems lead to engineering-style solutions. So you have innovations like this:



The innovation there is the clapskate - a blade where the back detaches at the end of the stride. This allows the full blade to be in contact for a longer period of time, which transfers more power from the skater's legs to the ice. So you go faster.

In the analytical sports, these type of innovations lead to continually faster speeds, or longer jumps, but in the main, the sport still looks the same. Interestingly, most of the innovations don't come from the athletes.

It's a different story in the interpetive events. In these sports, the athletes themselves are coming up with the innovations. As they do this, they remake the sport. Dominic Basulto has a great post about the nature of innovation in snowboarding - where the judges often don't understand the difficulty of new moves.

He includes this quote from a WSJ article called "When Snowboarders Baffle the Judges" - it explains why Shaun White showed off all his new jumps in events leading up to the Olympics:


"The emphasis on innovation this season has snowboarders grappling with whether they can trust the judges to score their new moves fairly at first sight. Many top riders, including Mr. White, are haunted by the prospect of becoming the next Jonny Moseley, the free-spirited American mogul-skiing champion who failed to medal at Salt Lake City in 2002 despite his debut of a revolutionary trick he dubbed the 'Dinner Roll'. Though he executed it perfectly and the move has since elicited higher marks for difficulty, he received lower scores for his jumps at the time than his competitors got for their tried-and-true twists."

"Tricks can be deceiving," Mr. Moseley says. "I worked twice as hard to be able to perform that in the Olympics than anyone else." Mr. White says he could have saved his surprise moves for Vancouver to increase the 'wow' factor and prevent copycats from stealing his thunder, but he decided it was more important "to educate the judges."


That sounds a lot like the conversations between stakeholders that Lester & Piore describe, doesn't it? As the athletes in interpretive events innovate, the look and feel of the sport changes dramatically. The last interpretive-style innovation in an analytical-style sport that I can think of is the Fosbury Flop in high jumping. Dick Fosbury actually came up with a completely new way to do the high jump. I can't think of a similar shift in skiing, or the other more 'objective' sports. Verganti and Lester & Piore all conclude that interpretive processes are more likely to create radical innovations. We see the same outcomes in the Olympic sports. The innovation in snowboarding is definitely more radical than the innovations we see in downhill skiing. This is a useful thing to keep in mind when we're managing innovation within our organisations.

I'm not sure if this resolves the question of whether or not ice dancing is a real sport. But I think we should embrace the Lester & Piore argument - both analysis and interpretation are important, and we need to be comfortable with both to be genuinely innovative. We need to have both skills within our firms to innovate successfully. So maybe we need to embrace both forms of sport, and both forms of sporting innovation in the Olympics as well.


NOTE: This article talks about innovation at the Winter Olympics, and it's all analytical!


Don't miss an article - Subscribe to our RSS feed and join our Continuous Innovation group!

(Speed skating from flickr/BWJones, snowboarding from flickr/prosto photos - Creative Commons)

---

Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

Innovation Perspectives - Active Senior Opportunities

This is the third of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on 'What product or sector is in desperate need of innovation?'. Here is the next perspective in the series:

by Tim Kastelle

We are facing the best innovation opportunity in the history of business right now, and everyone is missing it. The sector that provides the best opportunity for innovation right now is older adults. And you can tap into this market with one fairly simple change to your business model.

My wife Nancy is a geropsychologist. When she asks her students at the start of each semester what words come to mind when they think about aging, and nearly everything is negative: sick, alzheimer's, nursing home, dementia. These thoughts dominate our thinking about business opportunities in this sector as well. Everyone knows that all of the populations in developed countries are aging rapidly. People that are 65+ are going from 10-15% of the population in 2000 in most countries to 25-40% of the population by 2025. So what opportunities does this present?

A recent cover story in Business Review Weekly here in Australia talked about how the baby boomers can make you rich. Their suggestions: invest in nursing homes and health care.

This is wrong!

Most firms start with an older adult business model based on the assumption that these people are sick, and they need care, and that is where the opportunities lie. In most western countries, how many older adults are in nursing homes? About 5%. How many are sick? Less than 10%. Why are we building our business models around less than 10% of the biggest segment of the population? This is insane. So my prescription is this: start with a simple business model innovation - your target market is actually the 90% of older adults that are healthy and active!

Tom Peters has been talking about this for a while. So has Ken Dychtwald. Here are some facts about older adults:

• There are lots of them, and soon there will be even more.
  
• The overwhelming majority of them are active and healthy.
  
• They have TONS of money (70% of the wealth in America, according to Peters).
  
• They see more movies, buy more clothes and more cars and more, well, everything than any other segment of the population.
  
• They have time on their hands and they want interesting things to do.
  
• They're the fastest growing age group on Facebook, and their use of other social media outlets is also growing rapidly.

Whatever you do, change your business model to target these older people, not the sick ones. Once you have done that, do what Saul Kaplan suggests and start learning what they want. Then start innovating.

We need iPhone apps for older adults. We need movies, vacations and consumer products that meet their needs. We need them in our social networks and focus groups. Peters recounts a number of cases of firms that have successfully made a product or two targeting older adults then says:


"These are all great cases. But they are just... cases. Isolated events in a Grand Marketing Narrative that continues to treat Youth as its hero.

They are a far cry from Strategic Realignment. And anything less than Strategic Realignment - that is, reorienting your enterprise from the ground up to serve the emerging [older adult market] will you in the cramped, low-growth world of 'niche' marketing.

Review the numbers: If a group controls the vast majority of wealth and discretionary income, then it is the market."


He's right. It's the best innovation opportunity ever. How will you take advantage of it?


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on 'What product or sector is in desperate need of innovation?' by clicking the link in this sentence.

---

Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

Value Networks and Innovation

by Tim Kastelle

Today I will tell you why it is so hard for you to get your innovative new idea to spread quickly. Well, one of the reasons, at least. It's because the economy is so interconnected. This is a bit counterintuitive - after all, I was just telling you how we can use networks to spread ideas. The good side of networks is that they can make it easier for ideas to spread. The problem with networks is that to get people to actually adopt your new idea, you often have to get them to break links within their existing network, and this can be very difficult. That is why it is important to understand how to build a position within the value network.

Value networks show up in most of the various business model frameworks. The idea is that when you have an innovation, you have to understand what products, services and routines are related to your new idea. Once you understand this, you can then figure out how much of the value network you need to control yourself. Anders Sundelin just wrote a terrific post on his Business Model Database blog describing how you can map the value network for your innovation, anlyse your position within it, and take steps to improve your position. He does a great job of explaining the mechanics of value network analysis. I would like to show you why it's important.

As an illustration, here is a model of the value network for mobile phones, adapted from the book Invisible Engines by Evans, Hagiu & Schmalensee. It shows the postion within the value network that Apple has taken with the iPhone:



Apple has chosen to control everything within the circle - in other words, everything! Even the application developers don’t have full autonomy, since every new app has to be approved before it shows up on iTunes. The advantage to taking a position like this in the value network is that it is easier to coordinate the system. Because Apple controls nearly everything, every time they have a new idea, it is relatively easy to decouple the existing value network, insert the innovation, and move along. The disadvantage is that having such tight control over the value network limits the scope of the innovations that can emerge.

In contrast, look at the position within the value network that Google has taken with Android:



They have taken almost the exact opposite approach, controlling only the operating system directly. This greatly increases the the range and number of innovation opportunities within the value network. There are two big downsides though. The first is that they are at the mercy of the other players within the value network. One of the reasons that there are very few Android phones here in Australia is that all of the handsets using it so far have been lousy. The second problem is that with less control over the network, all of the innovations within this network take longer to diffuse as there is no central coordination.

Google has the market pull to take a position within the mobile phone value network that is similar to Apple's if they choose to. So we have to assume that this is a strategic decision, and that their bet is that the increased innovation scope provided by their more open value network will outweigh both Apple's first move advantage, and also their relatively slow increase in market share.

And this illustrates the problem that most of us face with our value network - we can usually only control a small piece of it - as Google does with Android. This means that not only do our end users have to prefer our idea, but we also have to get others within the value network to stop using our competitors. This process is slow, difficult, and frustrating - and it adds an extra delay to the spread of our great new idea. Innovations require many players within the value network to unconnect from competitors before they can reconnect with us. This unconnect-reconnect process is often independent from the process of customers adopting our innovation, and it adds another delay to the spread of our new ideas.

There are many different models of business models available for you to use. I don't care which one you use, but you have to use one of them. They all include an element like the value network as one of the key things that you have to understand and manage when you try to get your innovative ideas to spread. The better your understanding of this network, the more effective you'll be at innovating.

---

Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

Using Networks to Spread Ideas

by Tim Kastelle

Yesterday I talked about some of the benefits and challenges of distributed innovation within organisations. One of the biggest challenges you face when you make everyone responsible for innovation is this - how do you get new ideas to spread throughout the broader group? This is part of what John and I are studying in our major research project at the moment. We have a three year grant to look at innovation networks within project-based firms. As we're getting further into the research, it is becoming clear that this issue of idea diffusion is one of the biggest problems that these firms face.

Earlier this week, we did a pilot study for a student's part of the project. Their question concerns how people search within their networks for information that they need. Because we haven't made a good video talking about this yet, here is Venessa Miemis explaining some of the issues:



(there's more good stuff from her here)


So the network facilitates innovation, as well as the diffusion of information - but how? That is what we're trying to figure out because the 'how?' part has generally been treated as a black box. To get at this, we will map networks within four groups of people in one firm that share a knowledge area, but who are spread across a number of different locations. This week, we tested the survey on a small group in the firm, and we learned some interesting things even from this.

This is one of the networks that we mapped. It shows the links based on responses to the question 'who provides me with significant knowledge?' In this case, we defined significant knowledge as that which was essential for solving a work-related problem. There are a couple of interesting things that we learn from this.

The first is that it is a relatively sparse network. This surprised the group - the manager thought that we wouldn't learn much from this team because they worked very closely together and they are highly cohesive. Still, even within a highly cohesive team, knowledge is not evenly distributed.

The second issue concerns the diamond formed by the four people in the middle of this network. This group of four was at the core of all of the different networks that we mapped. The surprising thing here is that this structure actually reflects the formal hierarchy of the group pretty closely. Organisational network analysis often shows that the informal networks are quite different from the formal structures of the firm. But that doesn't appear to be the case here. We've actually found this in other parts of our research in other firms as well. So we're starting to think that in distributed innovation networks, hierarchy is actually more important than we expect it to be. This is still very speculative, but it's potentially interesting.

The bottom line is that when our innovation efforts are distributed, it is critical to understand the structure of our knowledge-sharing networks.

---

Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

Who is Responsible for Innovation?

by Tim Kastelle

I run across a lot of organisations that say that 'innovation' is one of their core values, but their actions don't support innovation at all. Every once in a while, one of them decides that it is time to get serious about innovation, and that's when I get called in to help. As John has described, one of the first issues that these organisations deal with is the question of how to be more innovative. Often their first step is to work on generating more ideas, but we know that idea generation usually isn't the problem - idea execution is. Coming to grips with this is one of the key steps to take in becoming more innovative. Another key step is figuring out who should be responsible for innovation?

Jonathan Crowley from NESTA frames the issue nicely - organisations face two choices: create an innovation team that is responsible for driving innovation, or make innovation part of everyone's job. There are advantages and disadvantages to both approaches.

If you have an innovation team, they have clear responsibility for innovation. Often, setting up a separate team involves providing them with some resources. If your organisation has not been very innovative in the past, the team can be a good place to put innovative people that have been frustrated by this, and they will often thrive in the new role. All of these are advantages to forming a core innovation group.

However, there are also downsides to innovation teams. They can often become isolated (think Xerox PARC), which can make it difficult for their ideas to diffuse within the organisation. By making one group responsible for innovation, it makes it easier for everyone else to ignore it.

The way around these two problems is to distribute responsibility to innovation out to everyone. This makes it easier to get buy-in for new ideas, and they often diffuse through the organisation more quickly. This approach also makes it easier to unleash the latent creativity within the group.

But there are disadvantages here too. The big ones are that when organisations take this approach, there is often no actual responsibility taken for innovation, and no resources devoted to it. I've often seen this in MBA programs when schools say something like 'ethics is too important to just have in one class, it should be a central part of all classes.' Usually when you hear this, ethics ends up being completely ignored. The same thing often happens with distributed innovation.

So what's the answer? I think that you need to do both. As organisations try to become more innovative these are the issues that need to be addressed:

• Innovation needs dedicated resources - this can come either through forming an innovation team, or giving everyone some time and money to execute new ideas. But one way or another, if you're serious about innovation, you need to sink some money into and free up some time for people.


• Someone has to actually be responsible for innovation outcomes - again, this often ends up being a mix of centralised and distributed. Someone whose title starts with 'C' needs to care about and own innovation outcomes. At the same time, you need to make everyone responsible for contributing to executing new ideas.


• You need a group of people that can drive innovation - and for this, the right answer is often to form an innovation team. These people can become your innovation champions, and help others through the process of generating, selecting and executing ideas.


• At the same time, you need a mechanism for getting everyone involved with innovation - this can be crowdsourcing new ideas, having innovation jams to select the best ones, or giving everyone an innovation metric that they have to meet. But one way or another, you need everyone involved so that new ideas are actually executed.

This is one of the things that makes it really challenging to become more innovative. If you want to actually be more innovative instead of simply saying that you value innovation, the answer to who is responsible for innovation is: everyone!

---

Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.

Innovating with Constraints

Our October Innovation Contest winners won a signed copy of "7 Lessons for Leading in Crisis" by Bill George and the right to have their article re-published here on Blogging Innovation. Here is the first of the three winning entries:

by Tim Kastelle

I've been giving further thought to the issue of public sector innovation which I discussed briefly last week. John and I do a lot of work with people in the public sector as that makes up a fairly big part of Brisbane's economy, and I know that people often find it difficult to be innovative in that area. However, it is essential that we have good public sector innovation because large parts of our economies are in the public sector, and these parts are often very important. We just can't afford to have industries like health and education stagnate - innovation is critical in these fields, as it is in the other areas that fall within the public sector.

So what's the problem? There are a few. One is that overall, the public sector is not viewed as being very dynamic. Consequently, it does not attract a lot of attention from those of us that are interested in innovation. The Australian government is currently undertaking a review to try to devise strategies to improve public sector innovation. The website for this project includes a list of links to resources on public sector innovation (at the bottom of the page) - and you can see that there are not a lot of resources available (the project has a twitter feed too which updates new resources as they find them). This reflects a lack of interest at the levels of both research and policy.

The second issue is that government departments are often fairly risk averse - which makes innovation challenging. This issue is consistently raised by people in our innovation classes that come from the public sector, but it is a common issue for many people in other sectors as well - particularly middle managers that don't have much scope for action. When I talk to people in this situation they often say that the only way they can be more innovative is if they get more support from top management. It is true that top level support generally helps improve innovation. However, if you are waiting for increased upper management support before you start trying to innovate, in most cases, you're likely to be waiting for a long time.

There are a few things you can do to get out of the straightjacket. The main thing is to figure out how to try things. Experimenting is the key to innovating.


"The secret of fast progress is inefficiency, fast and furious and numerous failures." - Kevin Kelly


Now, obviously, failure is not a very popular idea within most government departments. The key to the whole idea though is to figure out ways to generate ideas and discard the ones that don't work as quickly and cheaply as possible. There are three steps here.

The first is to generate ideas.


"The secret to having good ideas is to have a lot of ideas, then throw the bad ones away." - Linus Pauling


Usually, this isn't the problem. People are naturally creative, and the number of untapped ideas that are in your organisation will probably surprise you. One way or another, you need to figure out how to tap into these. If you want some place to start, go to the Tom Peters site and download the Innovation Tactics paper that he has there.

The second step is the tricky one in public sector organisations - you have to select which ideas to try out. The central idea here is to look at how much authority you have. This might be as simple as signing authority - if you can authorise items worth up to $100, then what new ideas can you try to implement for $100 or less? What if you can't authorise any expenditures? The two jobs in which I've been the most innovative have actually both been in the public sector. In the first, I worked out at the start 47 ideas that I thought might make my section run better. Over 18 months, I tried out 45, at a total implementation cost of $0. At the end of that time, my section was just under 20% more effective in turning enquiries into new students, in part as a result of some of those 45 ideas that we tried. Not all of them worked, but a lot of them did - and some of the simplest had the biggest impacts. My bosses weren't too enthusiastic about new ideas when I started, but they were very enthusiastic about results. Most bosses are. So the second step is to figure out what you can get away with, and start trying things that fall within your scope of power. That's how select the ideas to try - you may have to wait on the big ones that will change the world, but if you succeed with some small ones, you may eventually get to try those out too.

The final step is getting the ideas that work to spread.


"Some people look for things that went wrong and try to fix them. I look for things that went right, and try to build off them." - Bob Stone


You need a strategy for amplifying the good ideas. Part of this is selling them to the people around you. To do this, you need to figure out which of the ideas are working. An important activity here is measurement - if you're able to measure the outcomes of your ideas, it is easier to gain support for trying more things.

Innovating is always hard. It's especially hard if you don't feel supported. But the key to innovating when you have constraints is to try things. Try as many as you can, figure out what works, and do more of that. It's a formula that you can follow in nearly every work setting. Instead of telling me why it won't work in yours, why don't you spend the time figuring out a new idea to try yourself instead?


"We have a 'strategic plan'. It's called doing things." - Herb Kelleher (Southwest Airlines)


(photo from flickr/djwudi - creative commons licensed)

---

Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation at the Innovation Leadership Network.