Innovation Quarterly – Winter 2015

We chose the pursuit of strategic opportunities as the theme of this IQ since these are the opportunities that significantly move the needle of a company’s growth and challenge current capabilities, tolerance for risk and operational mindset.

A lot of innovators are thinking about how an established company can effectively pursue strategic opportunities, and in this issue, we highlight some of the best material we’ve found — and offer a few of our own ideas, too .

TABLE OF CONTENTS

Opportunity Pursuit: The Next Wave of Innovation Development

A brief overview of the forces and trends driving new innovation processes, methods and tools to help companies pursue strategic innovations.

The Innovation Community 2015

A selection of our favorite, thought-provoking conferences, blog posts, articles and social media content.

What We’re Reading

Impressions of “The Innovators” by Walter Isaacson and “Curious” by Ian Leslie.

We are interested in your feedback and opinions — comment on our blog posts, share your reactions and ideas in our Innovate Innovation Now LinkedIn Group or drop us a note.  And remember we are here to assist you on your journey to …

Own the Unknown


 

Pursuing

Opportunity Pursuit – The Next Wave of Innovation Development

For those of us interested in the dynamics of innovation, an interesting transformation is happening in our domain right now. The activity of opportunity pursuit is undergoing a significant transformation due to underlying forces that are affecting how organizations create strategic innovations. Companies are recognizing that they need to make bigger bets, more strategic bets, and that incremental innovation alone won’t cut it. These bigger bets come with risks, however. They are more difficult for a company to pursue because they require bigger changes in core capabilities and business models.

In response, organizations are adopting new cultures and new structures to enable these bigger, bolder but more uncomfortable bets. We’re seeing large organizations learn to adopt startup-like behaviors. But we’re seeing more than the rise of the internal entrepreneur; we’re seeing the rise of the internal entrepreneurial system.

The following are some of the trends we’re watching closely:

  • The stage-gate, NPD processes are reaching a threshold of change. Stage-gate processes, developed and promoted by Robert Cooper and Scott Edgett in the 1980s, have been the staple of corporate New Product Development processes. There has been continuing evolution of traditional NPD stage gate processes and an understanding of what makes them work (and not work). But it is now becoming clear that in the early life of strategic opportunities, a stage-gate approach is not the best methodology to follow, and even Cooper himself is advocating moving beyond stage-gate.
  • The entrepreneurial system is entering the world of large corporations. The work of Steven Blank, Eric Ries, and Alex Osterwalder is having an impact on how large organizations pursue new, strategic opportunities. The venture capital mindset and the ability to Test and Learn  are being adapted and adopted by large corporations.
  • The world of lean and agile development has matured. An alternative and/or enhanced approach to traditional stage-gate processes is agile development. Agile methods were first used (and now, widely used) for software, and they are increasingly being applied to product development — for both physical and informational systems. The methodology is mature and supported by training and numerous tools, which themselves are becoming more automated and intelligent. The Lean Startup approach is an incarnation of agile development that is rapidly replacing stage-gate methods to become a best practice for strategic opportunity pursuit.
  • Quicker and lower cost to experiment. As a result of automated tools for agile development on the software side, and rapid prototyping and simulation-driven design on the physical side, it is now possible to build physical and informational artifacts quicker and cheaper – even for those farther up the supply chain for which low-cost experimentation has been difficult in the past. The concept of the Minimum Viable Product (MVP) has emerged as these new tools can be used in a Test and Learn process.
  • Ubiquitous data and intelligent software. The speed and cost of experimentation has been aided by the ability to instrument and sense in both physical and informational systems. The “Internet-of-things” (IoT) means that real-time, massive data collection during experiments and after rollout is now possible. The convergence of big data and artificial intelligence software is making it possible to do rapid iterations in real situations to learn which new offering and business model works.
  • Better understanding of underlying human dynamics. The trends above lead to the age-old question of what is it that adopters of new products and services, really want. The various techniques we employ, including those discussed here, are intended to help us determine just this. But there is another area of inquiry that has been evolving and is informing our ability to innovate. Real advances in the understanding of human behavior, both individual and collective, is providing a rich foundation for figuring out how we think and behave as adopters, and creators, of innovations. Many books and publications cover these developments, but perhaps none is a better summary of what we now know than Daniel Kahneman’s “Thinking Fast and Slow.” For those of us helping organizations become better at pursuing strategic opportunities, this research is a necessary foundation.

 

Community

The Innovation Community

At no time in corporate history has there been more discussion, research and experimentation of innovation processes and practices. The innovation community is constantly expanding and developing its voice. We love the rich mix of perspectives across industries, technologies and geographies that keeps the field moving at a rapid pace.

We’ve listed some of our favorite forums for learning and connecting with the innovation community (admittedly U.S. focused).

Meetings and Conferences

  • Industrial Research Institute (IRI) Annual Meeting, April 27-30, 2015, Seattle, WA – This remains one of the premier organizations for R&D and innovation networking, and the IRI Annual Meeting draws executives from many of the largest industrial and commercial companies in the world. Especially relevant to innovators are the Research-on-Research (RoR) workgroups that IRI sponsors that advance the state of the art in innovation by researching specific issues identified by the membership.
  • Front End of Innovation (FEI) May 18 – 20, 2015, Boston, MA – What a difference from the second annual conference in 2004, where we first presented to perhaps 300 attendees; this will be the 13th annual meeting, with an anticipated attendance of over 800, FEI (as it is now known) has grown to be the preeminent set of international conferences on all things innovation.
  • The Conference Board June 10-11, 2015, Minneapolis, MN – The Innovation Master Class is an annual event held at the 3M Innovation Center in Minneapolis. This will be the third annual meeting and it is already gaining a reputation as a great gathering for advanced practitioners. The attendance is kept small so that participants have the opportunity to network and interact to learn from each other.
  • Chief Innovation Officer (CINO) Summit; May 20-21 2015, San Francisco and December 2-3 2015, New York, NY – These are relatively new but very active and well attended forums for those directly leading innovation efforts within the corporate world.

Blogs and Newsletters

There are a large number of blogs and newsletters that cover innovation topics. There are several rankings of innovation blogs, including Improvides’ list of the Top 25 Most Influential Innovation Blogs & Experts and Blogrank’s Top 50 Innovation Blogs. Here are a few of our favorites:

Articles

And finally several articles have appeared over the last three months that we and others have found interesting and have commented on and shared with the Innovate Innovation Now group on LinkedIn. We’ve listed a few teasers here — we hope you’ll join the group and participate in the discussions.

Article Comment
Breakthrough of the Year People’s Choice

I promise…this is not a “Which type of breakthrough innovation are you?” exercise

Why are so few Blockbuster Drugs Invented Today? So the Old is New Again
If Incremental Innovation Dominates then We Lose the Future

Myopia and What This Means to Competitive Survival

I Asked Jeff Bezos The Tough Questions — No Profits, The Book Controversies, The Phone Flop — And He Showed Why Amazon Is Such A Huge Success Blodgett interviews Bezos and gets some very interesting insights
William Gibson sees the Future A discussion about William Gibson’s new novel “The Peripheral” is interesting on a number of fronts

The Smart Ring and the Smart Belt Are Actually Kind of Stupid

Innovative Ideas of the Wearable Variety

Steve Blank on the Next 50 Years of Business Innovation

Steve Blank gets disruptive innovation theory wrong

Gartner Identifies the Top 10 Strategic Technology Trends for 2015

It’s time for the trends of 2015

The Man Who Knows Whether Any Startup Will Live or Die

Moneyball for investors: using analytics to predict if a start-up will succeed or fail

The Virtue of Scientific Thinking

Are scientists ‘virtuous’? Should they be? How does science contribute to morality? Today’s world is so dependent on science that these questions need to be discussed.

 


 

Reading

What We’re Reading

The Innovators : How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution
by Walter Isaacson
Read by Brian Christian

“It’s in Apple’s DNA that technology alone is not enough – that it’s technology married with liberal arts, married with the humanities, that yields us the result that makes our heart sing.”
–Steve Jobs

If you have not yet read Walter Isaacson’s previous book, “Steve Jobs,” I highly recommend it. It combines a fascinating subject (Jobs), a compelling storyline (the Apple birth, death and rebirth) and a journalist’s rare insight into the mechanics of how business works in Silicon Valley — and more broadly in America. I cannot make the same confident recommendation for “The Innovators.”

Isaacson’s latest work reads more like a history text, but not without a healthy dose of interesting anecdotes. There are certainly individuals who will be thrilled – probably 20thcentury American history buffs and digital industry professionals. But for students of innovation like myself, it is a bit of a slog for a few important but not new lessons more easily gained elsewhere. Admittedly, it may just be a problem of (my) heightened expectations based on his previous book.

This book is a chronological telling of the digital revolution, starting in early 19th century England with the conception of an automated calculator to the emergence of Google in the early 21st century. It tells the story of the hundreds of brilliant scientists and entrepreneurs who created each of the small and large building blocks along the way – including semiconductors, transistors, microprocessors, mainframes, personal computers, software, the Internet and search engines. Isaacson does a wonderful job of telling the inventors’ stories, their amazing triumphs and their foibles and failures. He was on a mission to highlight the real contributors, individually and collectively, not necessarily the few who got (or took) the credit. I trust that he got it right.

Isaacson has woven four principal themes into his telling of the history of the digital revolution, in approximate order of the author’s emphasis:

  1. Technology-driven innovation on the order of the digital revolution results more often from the collaborative and complementary efforts of hundreds and thousands of smart and dedicated individuals making incremental advances than from the lone inventor with the earth-shaking epiphany. Both are important but, too often, history tends to exaggerate the lone inventor’s role, leaving humanity with an under-appreciation of the importance of the collaborative mindset and process.
  2. The most transformative visionaries and innovators in the digital revolution were strong believers in the importance of both the sciences and the arts. Isaacson makes a strong argument that scientists who reject the importance of the arts and humanities do so at their own expense. He also suggests that it is this ability to meld the arts and sciences that will separate humans from artificial intelligence.  The Jobs quotation at the top of this review highlights this theme.
  3. Women had a critical and widely under-reported role in the early days of the development of computers and operating systems. In fact, their role may have been greater in the first half of the 20th century than in the second half. His explanation for this is that women were very well accepted into the field of mathematics in earlier decades. At the same time, math was widely regarded as an important skill set in the early development of computers and operating systems. In latter decades, both trends reversed.
  4. From its very earliest days, digital innovation has advanced rapidly due to the predominant ethic among the digital scientific community — that intellectual property should be shared for the common good rather than protected for economic gain. Isaacson consistently calls out those who leaned toward the closed/profit model vs. the open/common good model. He also offers an interesting distinction – that the capital-intensive parts of the digital ecosystem, such as chip-making, justifiably lean toward the closed model to ensure capital investors receive a fair return while the less capital-intensive parts of the ecosystem, such as software development, should lean toward the open model for the benefit of humanity.

In summary, it’s a prodigious work and perhaps a needed chronicle of the most important scientific revolution of the last century. It’s not exactly my cup of tea but, if you are a 20th century history buff or a digital industry professional, it may very well be yours.

Curious: The Desire to Know and Why Your Future Depends On It
by Ian Leslie
Read by Steve Schwartz

Innovation is a knowledge game, and the best innovators invariably have a richer supply of knowledge than the competition. But gaining that knowledge supply may be more a matter of disposition than behavior: You need to be genuinely curious. Or at least that’s the position that journalist Ian Leslie takes in his new book, “Curious: The Desire to Know and Why Your Future Depends On It.”

The human animal, Leslie says, has evolved a “Need for Cognition,” or NFC. It’s an appetite like any other, but it’s also not distributed evenly among a population. There are “cognitive misers” who seek comfort in what is already known, and others with a high NFC who seek new experiences beyond their routine. You may ask yourself, “Which am I?” Or perhaps, “Which is my company?” and Leslie likely would give you one answer: Any group “that values order will seek to suppress curiosity.” There may be a valid reason for that, he argues: Not all curiosity is productive.

Leslie casts curiosity into two buckets: (1) Diversive Curiosity, where the aim is novelty, and (2) Epistemic Curiosity, where the aim is knowledge. It’s the latter, he says, that makes the big difference. The power of learning, and building greater knowledge, is so substantial that scientists believe we have evolved to derive pleasure from it. The evidence lies in the levels of dopamine, a reward-motivated neurotransmitter, found in the brain during learning. But why should that be so?

We’ve all heard the saying, “curiosity killed the cat,” but ironically, curiosity is more likely to reduce risk rather than introduce it. In one famous study, people were shown a series of landscape pictures and asked which they preferred. Independent of background and culture, people were universally attracted to scenes showing a source of water, such as a river, lake or a waterfall. Water is a requirement for survival, hardwired over the millennia. But even more desirable were scenes showing “a path leading off into the distance, or dense foliage with a hint of a gap through which one could pass.” Leslie concludes that having other avenues to explore (or escape to!) may be as important to our survival as water is.

So how do we hone our curiosity and use it to thrive? Leslie offers many insights, ranging from how we raise our children to how we train ourselves. In all cases, however, he underscores the value that good curiosity plays in producing its principal side effect: knowledge.

“The more we know about something,” Leslie says, “the more intense our curiosity about what we don’t know.” Perhaps for that reason curiosity has been called theknowledge emotion.

So which comes first, which is more important to cultivate — curiosity or knowledge? Leslie concludes that “curiosity may be the single best predictor of success…it incorporates intelligence, persistence, and hunger” all in one. Every organization values knowledge (especially propriety knowledge), but what about the engine that builds it? How many companies cultivate their pool of curious individuals? Without them, the incurious organization is left to make due. They must base their innovation efforts on the public, consensus knowledge of others. I wonder why anyone would want to do that?

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