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THE ART OF INNOVATION

In search of a new model for strategic innovation for business and society

Mario Raich, PhD

Associate Prof. EDUCATIS (Switzerland) www.educatis.com Head of the Institute for Strategic Innovation www.educatisgsm.com Visiting Prof. ESADE (Barcelona) www.esade.edu E-mail: mario.raich@learnita.com

Introduction Corporations tend to focus on innovation when the usual business is either in trouble or they are looking for avenues to grow. Except those corporations which have embedded innovation in the core of their strategy and culture, like 3M, Google, GE, Whirlpool, Apple, and alike. Strategies for growth The array of business strategies can be very diverse: - Survive in the long-term - Contain the losses - Preserve the value - Grow at the pace of the market - Grow on basis of existing business - Grow on basis of new business - Grow aggressively through: alliances, mergers, acquisitions - Quantum leap growth The objectives of growth can be very different from one organization to another: survival, earnings growth, market share growth, cash flow, dominance of the market, high returns, etc. This depends very much on the stage of development, position in the market, financial strength, innovation, competitive environment, management strength, egos of the key drivers, etc. This leaves us substantially with five basic strategies for growth: Organic growth Price premium Merger and Acquisition Growth from within Growth through innovation and several possible combinations of this five strategies. Avenues to innovation We have to differentiate between creativity, invention and innovation. Creativity is the human ability to get new ideas or to find new solutions. Many people link creativity with artistic endeavors and with the writing of literature. Invention is the discovery of things that have been unknown before. Finally innovation is the ability to create new value based on new ideas. But how can we get innovation? There are many avenues leading towards innovation:
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Brilliant individuals, e.g. A. Edison Innovative people R&D Copying best practices. Good examples is the development of the economy in Japan, South Korea and recently China Mergers and Acquisitions Serendipity: wait and see Lets the consultants do the work Corporate Venture Management Corporate Innovation leveraging employees abilities Corporate Innovation process leading to Business Cases Corporate Innovation process leading based on the re-invention of the value creation or business model

People People are confined within the corporate context and within their social roles and are most of the time not aware of the free space they have to explore for new ideas. Most of the time when we are talking about people, we are talking about their attitudes, perceptions relationships, knowledge, know-how, expertise, experiences, prejudices, principles and finally behaviors. An innovation initiative can help people to go beyond what they are and where they are. Today we need creative and bold individuals who go beyond the existing and accepted. Innovation itself will be going through a massive change. For the first time in human history we can access the global innovation capability for innovation. Unexpected changes in technology, business and society will drive the disruptive innovation. We need an innovation strategy adapted to this environment.

Innovation Strategies
Not available
New Market share Disruptive Technology

Aggressive Entrepreneurship
Corporate Cooperation JV, Alliances, M&A

Creative Entrepreneurship
High risk areas High potential areas Turbulence

Emerging Customer Segments New Business Models New Industries

Competencies

New Markets

Competitive Entrepreneurship
Operational excellence Customer orientation

Expanding Entrepreneurship
Internationalization Globalization

New Industries

Available

Known

New Products and Services

Territory

Unknown

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Two Principles At Learnit we use a simple, powerful innovation framework based on the alchemistic process for transformation, because it has worked on the material and the spiritual level at the same time. This framework is based on the alchemical model for transformation, and applies a color coding used by the alchemists. 1 The meaning of the colors matches the four stages of the innovation framework very well. We are also helping to create an innovation partnership consisting of all key stakeholders involved in the innovation initiative. Only the innovation partnership can ensure that disruptive innovation will be accepted. Going beyond business as usual We are used to looking at the converging side of innovation and transformation linked to the comfort-zone we have established. We therefore often miss the diverging side going beyond it. We are focused so inside-out that we may not realize that the potential for disruptive change and innovation is beyond it.
Disruptive potential

Infinity
The Metaverse

Blue Sky Ideas

2008

White Spots
2010

Neighborhoods
2020

Leveraging the existing

CORE
2030

Inside-out Converging Comfort-zone

Outside-in Diverging Beyond

Creativity

For example, the Metaverse for most people today seems very far away. But we believe that within the next two years it will be in the area of white spots not visible to most people and most organizations. But in ten years it will already be in the neighborhood and in twenty years at the core of business. The innovation framework Innovation is any change which creates new value. It begins with the creative mindset leading to ideas, it continues with the conceptual mindset leading to plans and projects and it terminates with the productive mindset leading to new value.
1

Nigel Hamilton, The Alchemical Process Transformation, http://www.sufismus.ch/omega_dream/alchemy_e.pdf

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The big problem is to cross the Sea of wishful thinking where most of the ideas and plans are sinking for ever. Therefore generating ideas is only the start of the innovation journey. Only entrepreneurial people can take an idea, create a plan, organize the necessary resources and create new value.

The three innovation peaks

Plans Projects Ideas New Value Created

Creative Mindset

Conceptual Mindset

Productive Mindset

Sea of Wishful Thinking

Discovery process Serendipity Errors and mistakes Creative spin-off Business Rationale Business Case Business Plan Actions Tests and Pilots Results New Value Created

Form one peak to another we have to cross the Sea of Wishful Thinking

The array of corporate innovation is very large. It begins wit the incremental improvement and ends with the change of the purpose of the organization. The potential for strategic innovation and disruptive breakthroughs is growing along this line. But the risk is increasing as well. Therefore it is worth to use professional support to start an innovation process.
Potential for Strategic Innovation and Disruptive Breakthrough

Purpose

IMPACT on value created, on balance sheet, on the market value

Culture

Business Model

Processes:
Strategy, Management, Performance, Production

Markets Organization and structure Technology Products and services Operational/incremental

INNOVATION

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The alchemistic model The Readiness is black; it represents the soil being prepared to receive seeds. At this stage we dont have any view; everything is still in the dark. We have to get ready for the adventure of innovation. The Discovery is white like fresh snow. There are no tracks or traces yet. Everything seems possible. We have to find the right seeds to put into the prepared soil. It is a search with intense scouting, searching and scanning. The ideas are the seeds we are looking for. Between the Innovation Lab and the Innovation Factory we will find the sea of wishful thinking, where most of the ideas are sinking, because the entrepreneurial element is missing and the driving force to push them through this sea is not strong enough. The strongest driving forces are: the need for acceptance, the search for ownership, power, status, achievement, greed and fear. In addition, we have to deal with strong emotions either propelling or stifling the development. Those ideas that make it to the other shore represent a threat to the existing order. Therefore they will meet fierce resistance. The champions of theses ideas will need luck and a lot of persistence to complete the innovation journey. The Innovation Factory consists of two core elements: the Development and the Implementation. The Development is in yellow, because it is like the sun that gives light and energy to grow the seeds. It is the stage of hope at which we are developing the plans for the implementation. A key part of the plan is the vision of the future state once it is implemented. The vision is the guiding star through the maze of the factory. Finally the Implementation is in red because red is the color of blood, representing life and the passion necessary for the development of new values. The seeds are grown into plants, we have created new value and we can harvest.

The Innovation - Factory

Power Acceptance Achievements Ownership Fear Status Greed

The Innovation Journey is always a journey to somewhere The Innovation - Lab

The described innovation framework can be used for business or social innovation! We just have to replace business case with social case.

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The Corporate Innovation Process The innovation process we are using can be adapted to the specific needs of our clients. It is a well-tested approach that can yield many business cases and lead to interesting innovations.

Innovation Lab: From Ideas to Business Cases Readiness

01. Going Beyond Wishful Thinking 02. Kick-off Workshop

Discovery
03. Collection of Ideas 04. Ideas Workshop 05. Enrichment of the Clusters 06. Opportunities Workshop 07. Analysis of the Selected Potential Business Cases 08. Future Workshop 09. Executive Presentation

Innovation Factory: From Business Plan to New Value Created Development

10. Developing a Business Plan 11. Business Plan Review 12. Business Plan Presentation

Implementation
13. Pilots and Prototypes. Testing Feasibility! 14. Developing the Market Plan 15. Market Test 16. Market Introduction 17. Market Implementation 18. Results and New Value Created. Controlling WS
Everyone involved in an innovation initiative needs to have a common understanding about the endeavor of their joint activities, and they need to have a shared vision of what they are trying to achieve. This is the common ground. We also need open communication securing the flow of all relevant information (objective and subjective; good and bad news). It is vital for the success of the innovation adventure. And finally, people involved in an innovation initiative or an innovation project, need to know what kind of behavior they can expect from the key stakeholder of this initiative or project. They need to know what kind of experiences and competencies are available and what each member of the innovation team is willing and able to bring to the table. This we call mutual trust. A group is an assembly of individuals. The quality of outcomes and decisions below the quality achievable depends on the weakest member. A team is a group with a high degree of cooperation. The quality of outcomes and decisions can be better than the contribution from the best member.
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Partnership is the highest form of "co-operation." Sustainable, excellent results come from mutual complements. Partnership is the highest form of relationship between people. Partnership allows leveraging the best from all engaged partners. It is built on mutual reinforcement and development. Experience shows that a group does not automatically get transformed into a team or develop partnership over time over time. It needs a lot of work!

Quality of decisions and results

Genius

Talents

Individuals

Group =
Confined Individuals

Team

Partnership

Moving out of the corporate comfort-Zone Developing new ways to do business, dealing with the future and creating new business opportunities depends very much on our ability to leave the comfort zone we have created. The corporate comfort zone is usually dominated by the axe: daily business and people at work. This is just what many companies under the heading of shareholder value have been doing for the last decade or two. But today we cannot successfully ignore society and the future. Society and the future generations are becoming very important key stakeholders again.
Globalization New competitors Substitution Changes in legislation

Corporate Comfort-Zone
Future Development
Cu rio s
Future Generations

Asymmetric threats Social changes New technology New opportunities

it y

ng tro

Em

io ot

ns

Daily Business
Performance & Results

Corporate Comfort-Zone

People at work
Future Generations

a ss Di

cti fa tis

on

Pa in

Society
Key Issues

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Learnit Ltd.
Learnit is an innovation enabler. Our passion is innovation! We are developing customized unique innovative solutions for organizations Learnit is a London based globally active network of companies, independent consultants and experts

Developing LEMBA ( Leadership,

Entrepreneurship, Management, Business Acumen )

Beyond Business and Society in Transformation

AKIM based Leadership Development

AKIM = Advanced Key Issue Management

Developing Corporate Entrepreneurship Developing Entrepreneurship in Poland (15000 small and medium size entrepreneurs) Corporate presentations Workshops

Leadership Academy Talent Academy Managing the Future

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Customized innovative solutions Making an Organization Innovative Creating Business Cases for Innovation Reinventing Corporate Processes Creative Problem Solving Dream Solutions Customized innovative solutions; e.g. New market presentation (World Wide Business Centers Network) Developing innovativeness of the company (Trading) Developing Business Cases for new products and services (Chemicals) IPR Ventures (Pharma)

Business Transformation Cultural Transformation Developing next generation management Developing High Performance Organizations Developing High Performance Teams

Bespoken Business Simulations for Management Development (different industries) Business Simulation Programs fostering Innovation Business Simulations for: Financial Industry, consumer goods retail, Telecommunications, IT

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Our expertise is strategic innovation. Together with the Institute for Strategic Innovation at the Educatis University we are developing new tools, processes and programs. Our aim is to support the development of strategic innovation projects and processes with high impact on the value creation Together with the Business Simulation Group we can develop customized business simulations supporting the development of the innovation initiatives We are using the guided coaching approach to leverage the creative and innovative resources of our clients. In this way the can develop their own inhouse expertise and manger the innovation processes at their own We are also helping our clients to align the innovation processes with the existing management processes The challenge is to come up with solutions and business cases with high creativity and high feasibility

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Business Simulation A powerful tool to rally the organization behind the strategic innovation initiative is a business simulation. A business simulation program helps to build the innovation partnership and to create the readiness for innovation. The participants can make errors and mistakes and learn to cope with risk, fear and uncertainty in a safe environment. At the same time, they get a better understanding of the business they are in and can develop their business acumen. A business simulation program is a holistic learning experience with lasting effects. The Business Simulation Group of Learnit can develop customized business simulations based on the proprietary state-of-theart software LIASE and introduce it into your organization.

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