Four
years ago I wrote a well-received paper entitled A Prescription for Business Innovation: Creating
Technologies that Solve Basic Human Needs. I've updated it,
broken it into three manageable pieces, and present the first part
below. The remaining parts will follow on successive Tuesdays.
Introduction:
Why I'm Here
My modest objective in this presentation is first, to tell you some
new, interesting and useful things about innovation, and, second, to
persuade you that innovation is the most important determinant of every
business' success, and perhaps even the quality of our lives. I want to
convince you that in your business, whether it employs one person or
one million, innovation is probably the solution to whatever is
currently keeping you awake at night -- whether that be sales growth,
cost control, customer satisfaction, employee retention, or maximizing
shareholder value.
And if you, like me, spend some of your sleepless hours worrying about
things more altruistic than your personal and business success, I want
to convince you that innovation is probably also the solution to most
of the problems that have befallen our suffering planet, in part
because past innovations have created many of these problems.
And finally, if I'm successful in this evangelical task, I want you to
leave today not only with renewed hope about the future of your company
and our world, but with some new tools to make innovation happen in
your business.
I would like to ask you to listen to these ideas with an open mind,
suspend briefly your disbelief, and give this your full attention. If
this was that easy to explain, someone much smarter than I would have
done it years ago.
One:
Learning from our past: How Need Drives Innovation
The advent of a new millennium has recently given many business,
political and economic thinkers pause to consider what will be, as most
put it, the 'Next Big Thing':
- A New Economy Forum sponsored by Credit Suisse First Boston
attempted to develop a 'synthesis' of leading thinkers' innovation
models that might answer that question.
- Forward-thinking publications like Fast Company and Wired
have presented
alternative visions of the future from some extraordinary minds in many
different disciplines.
- And conferences of world political, social and business
leaders
like the Davos World Economic Forum try to grapple with the
bigger questions of how the holders of power can make the world a
better place, while helping out their particular stakeholders
in the process.
The catch-phrases of these business-driven thought
leadership events
are not new: competitive advantage, sustainable development, the
connected knowledge economy, globalization, convergence, digitization,
moving at the speed of thought. What is new is that there are now three
divergent models being used to predict our future, fighting for
audience attention (the names assigned to them are mine):
- Acceleration Model: The future will be a continuation of the recent
past, only much faster
- Chaos Model: The future will be utterly unlike the past, driven by
radically new and discontinuous events
-
Evolutionary Model: The future will be, like the past, a continuous
series of mostly predictable changes
From the perspective of business innovation this matters because almost
everyone agrees that the successful businesses of the future will be
complex, adaptive, agile, proactive, and creative -- they will not wait
for market demands to change them, but will instead continuously
reinvent their companies, anticipate future demands, and make
strategic, risky, value-creating investments and decisions, what John
Kotter calls Leading Change. In order to do this -- to make intelligent
decisions and investments before demand is articulated, to view
risk-taking and the creation of future options for action as essential,
not foolhardy -- requires at least some consensus about 'where the future
is headed'. Selecting one of the above three theories about the future
is an important start in doing so.
Technophiles who favour the Acceleration Model tend to be infatuated with artifacts of the
last thirty years: more digital, faster, smaller, lighter. Advocates of the Chaos Model, on the other hand, believe there are no
rules for our brave new world of the 21st century. Their advice for
business and other leaders is to be opportunistic and think short-term.
I lean towards the Evolutionary
Model. I believe that using an
understanding of the past, with the right perspective, can help
businesses anticipate the future with exceptional clarity and
probability of success. There are two reasons I hold this belief, and
they form the basis for much of the rest of this presentation:
-
Technology is Not Evil: Technology was, is, and
always will be, about improving the quality of human life (though it has had some disastrous, unintended consequences), and
-
People Change Reluctantly: People change much more
slowly than technology, and ultimately won't accept, adopt, or pay for
any technology that they aren't yet ready for, or which doesn't fill a real human need.
The report of the 1999 Credit Suisse First Boston New Economy Forum
draws together some very powerful innovation models, into a single synthesized model that can be used
to explain how technologies have impacted society and civilization
since it began about thirty millennia ago:
Figure One: How Fundamental Needs spawn Innovations & Technologies
(Adapted from Credit Suisse First Boston New Economy Forum 1999
Synthesis)
According
to this model, innovations like crop cultivation, the printing press,
and the harnessing of solar energy, have always arisen in response to
an urgent human need -- overcoming the sudden food scarcity after the
Ice Age, bringing literacy to the masses, and solving the energy crisis
respectively in these three examples. Technologies are applications of these innovations. The intriguing organic-looking ovals for each technology are also from the Credit Suisse Synthesis,
which proposes are technologies are best developed using the following
process:
Figure Two: Development Process for Technologies
(from Credit Suisse First Boston New Economy Forum 1999 Synthesis)
Let's now take a look at this synthesis model in more detail, to test
whether it represents the way in which historical innovations have
occurred, and then what this might tell us about innovations of the
future.
Two: Man's Earliest Innovations: A Brief History of Technology
The first humans to walk on our planet, according to most
anthropologists, were not the mighty hunters most of us might picture.
In fact we were particularly disadvantaged, lacking both keen senses
and a hide adapted to changing climates and weather. As a result, early
humans were scavengers, ignominiously surviving off the leftovers of
creatures with better innate hunting 'equipment'. In the first scene of 2001: A
Space Odyssey, Kubrick
& Clarke hypothesize that a carrion bone was the first human tool.
Marshall McLuhan explained in his book Understanding Media that this
early human was using the bone, this very first tool or technology, as
an extension of his hand, giving it strength, reach and durability his
hand alone did not have. McLuhan argued that all technologies are
extensions of the human body and the human senses, and it is these
technologies that have allowed the poor, badly-pelted, sensory-deprived
human species to buck Darwin's odds and survive.
So picture our poor shivering proto-human looking among the bones of a
wolf's recent meal for new tools beside the greasy bone, and thinking,
in true McLuhanesque and 20th century economics terms: 'If the bone as
an extension of my hand helps me to compensate for my competitive
disadvantage in the hunter-gatherer marketplace, why can I not use
other tools similarly? Then, lacking the appropriate scientific
training but still intoxicated over his first innovation, he or she
comes across a dead wolf and considers the following applications of
this technological insight:
-
If I put the wolf's head on my head, will I gain the wolf's acute
senses, wiles and powers? (Not that different from the thinking applied
many centuries later by the Ford Motor Company in the naming of cars
and design of hood ornaments after various fierce animals)
-
If I eat the dead wolf, will I gain the wolf's acute senses, wiles
and powers? (Many cultures still eat powdered horn and animal genitalia based on this 'logic')
-
If I strap a live wolf to myself, will the wolf and I become one
creature, with both the wolf's senses, wiles and powers and my
brilliant and innovative mind?
Of course, the correct answer is (c), which, except for the use of a
leash or harness instead of a tight strap, remains one of the most important technologies in our short human
history: animal domestication. Interestingly, the development of a
non-choking animal harness, and a stirrup for riding larger animals,
took centuries, according to a review in the Economist of the
last millennium's greatest inventions. What's more, it occurred first
in China, possibly enabling their civilization to develop much more
quickly than Western civilization, until, for reasons only hinted at in
the Economist , China suddenly stopped developing new technologies in
the 15th century.
Without animal domestication and crop cultivation, we as a species
might well not have survived to come up with newer and more
sophisticated innovations like the wheel, paper and the computer.
Three: Six Principles about the Innovation Process
The first humans used precisely the process shown in Figure Two to
develop and 'commercialize' the technology applications of the
innovations of animal domestication and crop cultivation. It is the same
commercialization process taught in business schools today. However,
the success of the process is only as good as the idea, the innovation,
that lies at its front end. Business schools are actually very good at
explaining the recipe, but they, and most educational and business
institutions, are absolutely terrible at teaching people how to find
the essential new ingredients -- the 'grey matter' at the left side of
Figure Two, the ideas & innovations that make the recipe work. The
problem isn't a scarcity of good ideas either -- it is the lack of rigour
and investment in infrastructure to surface, capture, develop and qualify new ideas
prior to commercialization.
Figure
Two also recognizes that many innovations and technologies are derived
from other innovations and technologies, and often come from applying
an
idea or a technology from one application domain, or from nature, to an
unrelated application domain. The BBC/Discovery program Connections
made this point very powerfully, and its author James Burke continues
to develop both examples of such non-obvious connections, and exercises
to help us learn to discover more -- in essence, to become more
innovative. Burke's latest book explains how a problem with the
irrigation of Italian gardens led to the invention of the carburetor,
for example.
Furthermore, Figure Two acknowledges the importance of the story in the
successful commercialization of innovations. It is hard to pick up a
business book or attend a business conference these days without being
lectured on the importance of story-telling, but the idea is neither
new nor complicated: Stories convey the context for the application,
they explain how it can be used in the user's or
developer's day to day life. Knowledge transfer is an essential
precondition to commercialization. The easiest way to transfer
knowledge, i.e. to explain or persuade, is to do so in a way that lets
the learner internalize what they are hearing i.e. to fit it into their
own mental models of how things work. And the simplest way to enable
internalization is by telling a story, be it a Utopia or Future State
Vision, a parable with a built in lesson, or a simple recounting of
processes and events that lets the learner relive the teacher's
experience as if it were their own.
From all this we can derive six basic principles about the Innovation
Process (again, the names given to them are mine), to add to the two
espoused earlier about cultural resistance to innovation:
-
Need Drives Innovation: Necessity is the mother of
invention, and as the fundamental human needs listed in the top row of
Figure One above illustrate, the important innovations and technologies
of human history have addressed the greatest human needs of their
age. Without an urgent human need, a burning platform, a Business Case,
there will be no innovation, since the preconditions for it, as John
Kotter explains in Leading Change, do not exist. An obvious corollary
of this principle is:
-
Innovation Starts with the Customer: If successful
innovations must address an urgent human need, then the front-end of
the innovation process should be situated at the point of contact with
the humans expressing that need, i.e. the sales and customer service
people in businesses, not the R&D laboratory or the marketing
department. With some notable exceptions where the need for the
innovation was only identified later, innovations coming from R&D
tend to be solutions in search of problems, and those coming
from Marketing tend to be solutions for which needs need to be artificially created through advertising.
-
Innovation Drives Technology:
The solutions
developed by companies' products and services are all technologies that
apply one or more innovations.This is equally true of pregnancy test
kits, tax preparation software, satellite-and-computer-based learning
courses, futures options, automobiles and corn (whether genetically
modified or not). So-called 'competitive advantage' comes either from
offerings that better satisfy human needs (faster, better, cheaper
etc.), or from new technology applications of new innovations that
render the old offerings obsolete i.e. 'reinvent' the market. But as
much as
business would like to turn the model on its head (develop the
offering, then use technologies and marketing to create a need for it),
real needs like the ones at the top of Figure One cannot be created.
They can be recognized, and they can change as more fundamental needs
are solved, but they cannot be created. Need drives Innovation and
Innovation drives Technology.
-
Innovations are Interconnected: Innovation is not a
mystical creative process, explains Edward de Bono in Serious
Creativity. It is a learnable, repeatable process. Great minds and great companies can
learn to 'see the connections', provided they don't narrow their scan
(across time and across different disciplines of business and thought)
too much. Here's a great example of how broad scanning engenders
innovation, an example which also shows how many innovations exist in
nature awaiting our discovery, if we don't destroy them
first:: Scientists have recently discovered that butterfly wings contain
no pigment. They are covered by overlapping 'tiles' 50 times thinner
than a human hair. Each tile contains multiple layers of cells,
separated by air gaps. When the light bounces off the tiles, the layers
reflect colors with an iridescent sheen. There is a whole industry of
thin-film coatings, whose products are used in everything from
spacecraft hulls to anti-counterfeiting devices on paper currency, that
may be revolutionized by application of this innovative colouring
technology.
-
Stories Transfer Knowledge:
If you want to teach, or
if you want to set up a killer database that everyone will contribute
to and use, make sure your subject-matter is stories. Distilling
stories
to 'lessons' destroys the essence of
their value by disabling the learner's ability to internalize, digest,
and learn from, the contextualized experience of the teacher.
- Innovation Requires Discipline & Patience: The strange fish-like
organism pictured in Figure Two is the process by which almost all
successful ideas are commercialized. It is a journey that, even for
most great ideas, is rarely completed. It is essential to have the
discipline, patience, and courage to follow this process
rigorously.Without such rigour, a great idea can easily be buried by
premature skepticism, unscientific criticism, dangerous complacency and
fear of risk. The process works.
(Next
Tuesday: Part Two:
Innovation & Society, and The Structure & Culture of Innovative
Organizations (with six additional Innovation Principles to add to the
eight above); The Following Tuesday: Part Three: A 15-step Prescription
for an Innovative Organization, with some examples.)
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