Tuesday, July 26, 2011

Innovation Stories: Tragedy, Comedy and Fairy Tale?

As with most things in life, our experience colors our expectations. Innovation is no exception.  Most of us come to innovation with some personal and professional history and memories. The innovation stories born out of our actual experience, and those we tell ourselves tend to shape how we think and act in our innovation efforts. This holds true for the stories companies tell themselves as well—stories about their past and stories about their future.   

Whatever else our innovation efforts are, they are certainly attempts to tell new stories, before the narrative has been experienced, or played out. This, I suppose, is the “vision thing.” The success of an innovation can be measured by how closely its history follows the original fiction or vision.  Here is where a company's experience can so easily color its expectations; where past can shape future, even to the point wherein some inadvertently confine what we tell ourselves about our future to the same plot lines with which we have codified our past success. 

If narrative (or story) is the workhorse of how our memories organize experience, then it behooves us to take a closer look at some of the subtler but fundamental tales we tell ourselves about our company's own innovation experience. It may have a direct bearing on how we think about, act and talk about our current innovation efforts.

Our friend and associate Stuart Brown, M.D. gave us a copy of Joseph Meeker's The Comedy of Survival: Literary Ecology and a Play Ethic published in 1997. Meeker has much to say to innovators, albeit indirectly. Meeker compares the tragic and the comic, not simply as literary categories, but as strategies for survival, with Dante and the natural world as his “database.” The comic, Meeker contends, is nature's much more successful (than the tragic) strategy for survival.   By analogy, the comedic way is a more robust strategy for sustaining a stream of innovations as well.

With apologies to Meeker for taking liberties with his original work, perhaps we might re-examine the stories we tell ourselves about our company's (and our own) experiences with innovation, and do so through the lens of three major literary archetypes: tragedy, comedy and fairy tale.

Many of us unwittingly take a tragic view of our company's innovation mythology. Meeker reminds us that the “tragic way of playing the game of life is the finite way, seeking a prize or a payoff that will bring status to the victor even if it does tend to end the game….rest[ing] upon the premise that for every question there is only one right answer, and for every possibility of behavioral action there is one correct choice.”

This tragic bias tends to show up in subtle way, as when we ask of the new stories we are writing—i.e., the innovations we are currently working on—whether they fit with the company's business model or with the company's core competencies. The newer the innovation, the more likely the fit question will be answered in the tragic negative, if we assume that our future stories must somehow be a continuation of the past.

Others of us might have become a little too cynical about our company's innovation history. Many a promising innovator has been burned so often they become crusty and skeptical of most of the organization's attempts to innovate, and retreat to the clearer realities of the operating world. “We tried that before” is so often really the speaker's expressed wish not to have to deal with the new, nor accept the possibility that now may be a much better time. The cynics among us might be too quick to judge the innovation stories being composed by our design teams and advance technology folks as fairy tales or fantasies, mid-summer’s nights' dreams. Yes, dreams are important. If your society's dreamers and philosophers out number the plumbers, then neither the theories nor the pipes will hold water. Thomas Edison's “innovation is 1% inspiration (read fairy tale) and 99% perspiration” is hard to deny. However, there is still something about that 1%, isn't there?

Meeker reminds us that the best and most successful innovation stories are comedies—not tragedies or fairy tales—but stories full of adaptations and twists and turns, oozing with improvisations, serendipity and coincidence. Those business theorists now espousing “dynamic capabilities” as the true capital of an enterprise seem to be saying something similar. Though his comments were originally directed elsewhere, Meeker's words are prophetic to all of us engaged in parenting innovations:

“We mammals, along with the birds, have been playing and living comic lives for some two hundred million years. There is no need to learn how to play, for that knowledge is deeply embedded in our bones and genes. Play is as natural as breathing, and the comic urge for normalcy is as basic as the need for balance. If we nevertheless fail to pay and feel off-balance much of the time, it must be because we have bent ourselves terribly out of shape, imposing crushing mental and cultural burdens that make gravity seem more important than levity.”

This article was originally published in Innovating Perspectives in March 2006. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 387-1270.

Monday, July 18, 2011

Differentiating Competence, Capability and Capacity

Recently we have observed much unnecessary confusion around the terms competence, capability and capacity. Since the 1991 Harvard Business Review article on “core competencies,” and with the more recent phrase from David Teece and others of “dynamic capabilities,” it may be useful to pause and parse through how we are actually using these words, particularly in the context of innovation parenting.

Right now the terms competence, capability and capacity are often used interchangeably. In the dictionary there is enough overlap between the connotations and definitions of these words to explain the ambiguity.

While our dictionaries may not allow us to differentiate too precisely between these three terms, the following is an attempt to do so. It is intended to provide innovation practitioners, including sponsors, mentors and midwives, a framework within which to better discern what is needed and where it is needed, particularly when the catchall phrase “innovation culture” is broached. It may be more helpful to differentiate between these three words than to use them interchangeably, particularly when attempting to cultivate an organization's ability to innovate.

So, here is a proposed definition for each:

Competence is the quality or state of being functionally adequate or having sufficient knowledge, strength and skill. Competence is another word for an individual's know-how or skill. When we are asking whether we have the right competencies aren't we really asking, "Who knows how?" and "How well do they know?" Booz, Allen and Hamilton (one of the first management consulting firms) used competence as an essential principle when they recognized that management and leadership are all about getting the right people in the right place at the right time.

Capability is a feature, faculty or process that can be developed or improved. Capability is a collaborative process that can be deployed and through which individual competences can be applied and exploited. The relevant question for capability is not “who knows how?” but “How can we get done what we need to get done?” and “How easily is it to access, deploy or apply the competencies we need?” TRIZ, the Russian system for inventive problem solving, has been, until recently, a negative example of capability. TRIZ is an insightful set of principles based on patents for inventing. However, a user-friendly process (capability) to use these principles is only now beginning to emerge.

Capacity is the power to hold, receive or accommodate. Capacity is really about “amount” or “volume.” The relevant question related to capacity is “Do we have enough?” and the related question, “How much is needed?” Recent discussions with a large consumer products manufacturer revealed that while they had internal competencies in certain essential technologies, and even some capabilities, their years of buying it on the outside had left their internal capacity very thin. They were constrained less by what they knew and more by their inability to get their skills and know-how to enough of the places where it was needed.

Many years ago I experienced the dangers and resulting waste of confusing competence and capacity with capability. Kimberly-Clark Corporation had initiated a new product development program in its non-woven and commercial business sector. They put a senior person with lots of logistics experience in charge of the effort. Doing what had worked before, he applied principles and practices appropriate to logistics to the challenges of new product development. It engaged a lot of people and took a lot of effort and produced little if anything.

Logistics competences and capabilities are not well suited to challenges that are essentially of a developmental nature. The thinking that may have worked well in logistics and distribution—let's deploy a lot of people in a lot of different areas to discover, invent, reduce-to-practice and introduce—ended up being a gross misapplication of capacity, not to mention capability and competence. This is but one example of confusing capacity, capability and competence.

Teece believes a company’s “dynamic capability” is key to its ability to sustain a stream of innovations. Ikujiro Nonaka has suggested something that resonates with Teece's dynamic capability: he said it is not what a company knows that makes it successful, rather, it is its ability to create new knowledge that makes it successful. Toyota appears to have taken Nonaka's words and Teece's observations to heart, particularly when it comes to its innovation management system.

Perhaps the therefore for innovation practitioners is to keep our capabilities—our processes and means of collaborating—flexible and adaptable enough that these tool can be easily and quickly deployed and redeployed in different contexts. The competencies we need will always be multiple and varied and we will frequently not have sufficient expertise in house. So, we should have an enabling capability to find external resources with the right know-how quickly and relatively painlessly. Like Toyota, we ought to be slow to embed certain collaborative processes into a rigid structure (or software), despite how attractive it may at first appear to do so.  At the capability level, flexibility may be more important than volume.

This article was originally published in Innovating Perspectives in June 2008. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call  (415) 387-1270.

Tuesday, July 12, 2011

Future Horizons

As innovation practitioners spend at least some of their time thinking about the future, it may be worth taking time occasionally to pause and consider the underlying assumptions we are carrying about the future itself. Beyond the old adage “the future is not what is used to be,” the vocabulary we use to describe the future can reveal much about what we assume the future holds. 

Consider the time-oriented vocabulary of “short-term, mid-term, and long-term” and the metrics of “time-to-market and time-to-positive cash flow.” How often have we designated something as longer-term, only to discover later that our predictions of pace needed to be revised? What we thought was going to take longer—and therefore allowed us to delay investing—actually started happening sooner.

Likewise, how often have we designated something as short-term, only to find out that what we thought was right around the corner ended up taking much more time to develop? Timing is very difficult to predict; and so we should be prudently cautious anytime we use these temporal designations in our portfolio decisions.

Spatial vocabulary is also used, for example words like “core and context, adjacencies and outlook.” While it has some advantages of avoiding the guesswork inherent in the strictly temporal orientation to the future, thinking of different spaces—whether adjacent, white space or blue ocean suffers from a similar difficulty as the temporal. That which seems close-in can prove to be more difficult to realize than we  had  anticipated,  and  that which appears  far-a-field  can  be  more readily realized by means of a slight modification of existing complimentary business assets.

Geoffrey Moore's article on Horizon 1, 2 and 3 (Harvard Business Review, July 2007) is an attempt at least to bring the temporal and spatial together, which is likely a wise thing to do when considering what the future holds. Stronger still is Moore's borrowing of evolutionary theory.

Thinking of the future as “emergent” and “evolving” avoids the difficulty of predicting temporal pace or spatial position and reminds us of perhaps something more important: the future is not something to worry about or predict, so much as it is something that requires constant attention, experimentation and adaptation.                           

This article was originally published in Innovating Perspectives in August 2008. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 460-1313.

Wednesday, July 6, 2011

Content Trumps Process

When you hear someone say, “Trust the process,” do you take it literally or figuratively?

The old adage form follows function, or process follows content, still applies whether we are talking about innovating or operating. Yet these days it appears to be increasingly difficult for some to either know the difference between the two or remember this most basic principle.

Don’t get me wrong. Process—which often is used as a label for a sequence of steps, activities or procedures—is an important ingredient to getting things done well and in a timely manner. It is invaluable in coordinating diverse sets of arms, legs and minds, if not hearts. When process works well it is invisible; when it doesn’t work well, it becomes very visible. Without process, collaboration is more difficult. But when process gets in front of the content—that which is being attempted and why—activity and motion get easily confused with progress and productivity.

Over the past 30 years, I have heard many well-intentioned leaders say, “we need to be more innovative” or “we need to improve how we innovate.” A statement like this may be a true and necessary message; but on its own, it is insufficient and incomplete. Stating where innovations are needed (and why they are needed there) is also required for a coherent and complete act of leadership.

Yet all too often, company leadership—the CEO, CTO and others—are silent or inarticulate in this regard. Perhaps they are too focused on the best method to take the next hill. But even with the best methods executed well, if you are on the wrong hill, the execution and method are irrelevant. When leaders actually do articulate where innovations are needed and why, innovators within the company naturally respond vigorously and effectively.

Innovating is like parenting—a particular type of managing. In parenting, each child responds differently to discipline, love and teaching moments. While parenting principles may be transferable from one child to the next, the actual methods, practices and process itself is likely to vary, sometimes a great deal. The same is true with each and every innovation. By definition each innovation is unique, like children. If and when we insist on applying the same sequence in the same way we are likely to relearn that “trusting the process” is better understood figuratively, not literally. 

Peter Drucker made the observation in his book Management decades ago that the process one team used in its success is never exactly or directly transferable to another. Drucker says each project team needs to work out its own process appropriate to the particularities (or content) of the project at hand. This is not to say that one team cannot learn from the experience of another, particularly at the level of principles. Nor is it inferring that no new product development Stage-Gate framework is needed to define a common vocabulary and starting roles and responsibilities. It is merely a caution to being process-driven rather than content- or results-driven.

Many organizations are becoming more than “make and sell” execution machines by taking on the increasingly necessary “sense and respond” capabilities normally associated with living organisms. As this continues, the art of clearly communicating where and why innovations are needed will only become more important and valuable. Stephan Haeckel from IBM’s Advanced Business Institute wrote an interesting thought piece back in 1999 called Adaptive Enterprise (Harvard Business School Press). Haeckel suggests that the traditional command and control leadership required by organizations that are all about making and selling, centered around “offers” to customers is increasingly being complimented by a new kind of “context and coordination” leadership, centered in “responses” to customers more than offers to them. This kind of organization requires from its leaders a clear, unambiguous, “roomy” and shared understanding of where the organization is headed and why. 

For knowledge workers to be productive in creating new knowledge where it matters Ikujiro Nonaka, author of The Knowledge Creating Company, says knowing where the organization is headed and why is not optional. It is essential. It establishes context, and all value is context-based. Process may be important, but context and content trump process.

One of the startling “aha’s” that came from our Innovation Practitioners Network’s study of Toyota’s innovation management system is Toyota’s agnosticism regarding process. They appear to see the value in processes, tools and methods, but are eclectic in their mix of methods. Does Toyota have clearly stated principles and a firm sense of where the company is headed? Absolutely. But they do not have an overall canonized Toyota innovation process! The results speak for themselves.

Trust the process? Take it figuratively. But, by all means, trust the process.  

This article was originally published in Innovating Perspectives in November 2009. For this and other back issues of our newsletter, please visit our website at innovationsthatwork.com or call (415) 460-1313.