How Absorptive Capacity, Knowledge, and Idea Management Build Innovation Competence

The author has always had perceptive insights on the nature of innovation and offered advice on practical approaches and methods. His recent association with Hype, a commercial provider of ‘Idea and Innovation Management Software’ has, inevitably, resulted in a certain promotional tinge to his writings. Such is the case with this article but if you can get past the (admittedly mild) promotional aspects of the article, the author offers some interesting concepts.

One interesting concept is the AC/DC model – “Absorptive Capacity” (AC) and “Development Capacity” (DC). Absorptive capacity (AC) refers to the ability to ‘identify, value, and assimilate potentially profitable external knowledge’. Development capacity (DC) refers to the ability ‘to develop and exploit (absorbed) knowledge’. Both are important to an organization and need to be developed.

The ability to let new knowledge be absorbed into an organization’s ‘mind’, and not reject it, is key to the ability to create new concepts. Companies must ‘find better ways to resist allowing knowledge pathways to become narrower before the knowledge, insights, and potential connections have been well absorbed’. As the author states:

Organizations (typically) design innovation pipelines to get narrower and narrower. They want to dismiss ideas quickly that don’t fit their norm …

A well-designed innovation system can mitigate this tendency. As the knowledge we glean from outside comes inside, it can ‘suddenly confront us; it can challenge what we know …’ Realizing that ‘knowledge and innovation are connected at the hip … (that) they are inseparable and (that) each organization collects its knowledge in different ways’ gives the impetus for companies to develop both their absorptive and development knowledge capacities.

Original Article »

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