Innovation versus Business


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The key problem of any business is not what's new, but what's next. Given that, if New will be the required Next for business, you would think they would get to know each other a lot better.

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Innovation versus Business

  1. 1. Innovation versus Business An archestra notebook. © 2013 Malcolm Ryder / archestra
  2. 2. Why Bother In a business, any innovation must pass the Who Cares test. Business cares about innovation approximately because it needs to. Without a need, an innovation is a change carrying some degree of latent interest. Business is not a requirement of innovation. But when a business needs an innovation, the key prerequisite is the ability of the business to host the innovation. This usually means that some innovations are more likely to succeed in the business than are others.
  3. 3. Impacts • In the mid 1960s, Dick Fosbury jumped backwards over the high bar and permanently changed how Olympic Gold Medals could be earned. • In 1967, AT&T and the US Government together created the 9-1-1 telephone number. • In the 1970’s home equity loans were introduced in the housing industry. • In the 1980’s, turntabling was invented, an instrumental technique of Hip Hop that completely reset expectations about future music and spawned an entire constellation of new genres dominating much of musical culture for persons in the developed world born during the next 25 years. • High-powered computation, applied as sequence analysis in biology, created comprehensive mapping of the human genome in April 2003, globally resetting the basis for development of new medicines. • In 2012, the Taco Bell food chain designed and launched the Doritos Locos Taco and sold 100 million of them in 10 weeks.
  4. 4. Originality The importance of being original is highly relative. • For a creator, originality is a motivation • For a supplier, originality is a feature • For an owner, originality is an asset Originality can occur, simultaneously and unacknowledged, at multiple unrelated starting points, and wind up converging at the same point in the same innovation. Frequently, the key to being innovative is the creativity exercised in being derivative. Innovation does not depend on originality. Innovation is a predisposition of a way to get something done.
  5. 5. Ideas Many of the best moments of creation come from chance, from accidents, from mistakes, and from breaking rules – mainly because those occasions introduce something unusual into the existing point of view. Resolving or accommodating the difference can generate unusual arrangements that turn out to be useful. So often, the surprise of many new ideas is, nothing more than an awareness and acknowledgement that the difference is useful enough to reproduce on purpose. Creativity simply assumes the permission to make that acknowledgement and do something about it.
  6. 6. Dimensions of innovation Over the course of time, an idea may change in various ways affecting its clarity, importance and maturity. • Discovery © 2013 Malcolm Ryder / archestra defensible • Creative criteria: applicable • Business criteria: relevant DECISION • Design • Creative criteria: functional • Business criteria: viable DESIGN viable • Decision • Creative criteria: distinctive • Business criteria: defensible relevant
  7. 7. How to create: modes of innovation Description Example and disposition Model new logic Process or technique that integrates functions in an unprecedented pattern to change the way a requirement is met Context new applications Function serving duty in a situation not usually assigned to the function Synthesis new combinations Existing elements used as components of the design for a new kind of item Construction new assembly New arrangements of elements combined to discover or attempt an effect (often occurs as improvisation) Strategies for creation can usually be grouped into four general types. Strategies are NOT mutually exclusive. Tactics for executing the strategies are wide ranging, as they can be highly circumstantial regarding motivation, resources, support and available experience. (Tactics are not shown here.) © 2013 Malcolm Ryder / archestra Type
  8. 8. How to create: classes of innovation Installation Implementation Institution Distinction: creates an effect creates a facility creates a utility creates a capability Description: Outcome not seen before Tool not available before Function not provided before Method or practice not applied before The common denominator of innovation is the production of something that is unprecedented for the location of its influence. There is no presumption of permanence nor of presence outside of the sphere of influence. Normally, an innovation has worth according to what benefit can be understood by parties in its sphere of influence. Because of that, Innovations are easy to think about in terms of how they might solve problems. However, innovations are neither inherently nor necessarily “solutions”. What may be a cure in one place can be a toxin in another. © 2013 Malcolm Ryder / archestra Invention
  9. 9. Value An innovation may have many kinds of value because it may have multiple ways of generating impact. It is not necessary to pin down an innovation to only one kind of impact. But every innovation has significant impact in at least one way. Examples, such as shown here, are virtually endless. Installation (creates a facility) Implementation (creates a utility) Institution (creates a capability) Model (new logic) Compound interest Wankel sports car iTunes The Wishbone Offense Context (new applications) Metal tennis racquet Digital camera Oil-eating bacteria SuperPACs Synthesis Netscape browser (new combinations) Assembly line factory GMO farming Fax machine Construction (new assembly) Flying buttress Cubism Commercial Radio Velcro © 2013 Malcolm Ryder / archestra Invention (creates an effect)
  10. 10. Strategy Creatives being business-like • Who will care about this idea the most? • What would be a compelling demonstration? • What development approach is well supported? • Who else is working on this? Business being creative • If we could be better off, what would be different? • What could cause or allow the difference? • Where would the cause or allowance come from? • When could we have it?
  11. 11. Business-based Inhibitors Most business “problems” stem from issues regarding (and sometimes combining) change, distinction and cost. Thus, tactics, processes and resources are high-impact areas. REQUIREMENTS INITIATIVES PORTFOLIO PROGRAM PROJECT marketing r&d business devel. performance operations MYOPIA SCARCITY RIGIDITY ILLOGIC HABITS scope capacity priorities allocations methods An innovator can appear in any of these areas, and an innovation’s progress through other areas can be stalled or stopped in any of them as well. Through management, each area is a potential host. To avoid typical inhibitors to innovation, businesses will often have to adjust current practices and models regarding foresight, risk, communication, monitoring, and support.
  12. 12. Defining a problem is normally an occasion of recognizing a need. Innovations are not solutions looking for problems. Innovations are opportunities to solve problems. The primary ROI of innovation is opportunity. The ROI is variable. Business Problems Precedent to exceed (examples) a) b) c) d) Efficiency Productivity Assurance Preference Innovation as a solution (examples) a) b) c) d) Design and Implement Decide and Institute Discover and Install Design and Invent REQUIREMENTS INITIATIVES PORTFOLIO PROGRAM PROJECT marketing r&d business devel. performance operations
  13. 13. Notes • Eschew mythology. Innovations described somewhere are not necessarily prescriptions for somewhere else. • Big words apply to small things. For example, a tiny initiative is still an initiative, but what matters is if an initiative is needed instead of something else. • In business, the really critical success factor is not what’s new, but instead what’s next. Sometimes, it is important that what’s next is new. Sometimes, new is not important. • Unfortunately, business speakers tend to omit the word “business” from the phrase “successful business innovation”. It’s a habit.