The What, Why and How of Innovation

Innovation is change that adds value. It is relevant to every business and organisation we are involved in as, I don’t know about you, but I never heard anyone say that they aspire to be mediocre innovators. Everyone wants to be good at it, but for many it remains an aspiration rather than a reality.

We need to ask:

• Why we are innovating?
• What techniques should we use?
• How do we do it?

So let’s address those three questions in turn

1. Why are we innovating?

The needs of society – and therefore the markets we operate in – are continually changing and adjusting. Technology is driving a lot of this change, whether it be in mobile communications, medicines or the way we access natural resources.

We need to regularly review our business model to ensure it is aligned with these ever changing needs, and the pace of change means that proactive change is required.

Let us not forget the fate of the banks that invented and sold complex financial products that served no meaningful purpose and became economic weapons of mass destruction.

2. What techniques should we use?

If there’s one killer trend out there, it is that business innovation is becoming “social”. So it’s less about the detail of the technological change and more about the application of it.

From reviewing the latest HBR articles through to the direct needs of the clients I work with, there is no doubt that social or qualitative factors in organisations hold the key to performance and success.

There’s still a place for analytics and quantitative approaches, the point is that qualitative factors are the primary drivers of value. For many of us, this is annoying because we have to re-train ourselves away from our business management 101 habits. I recently heard Maria Ogneva from Yammer sum this up by describing herself as a “recovering MBA”.

And the proof is in the pudding: here are some best practice innovation techniques being used:

• Shared value – innovating business models by proactively working with broader stakeholder groups for financial and social outcomes.
• Appreciative inquiry – a technique that harnesses the power of practical experiences and ‘stories’ to help identify under-utilised assets and innovation opportunities
• Design thinking – taking a customer-led approach to product innovation; not just surveys, focus groups and interviews, but through detailed mapping and developing empathy with the customers’ daily demands. Read more →

Is CSR the R&D lab for Shared Value?

For those of us who embrace shared value as a powerful and emerging business practice, do we cast corporate social responsibility (CSR) aside? It may be tempting, but traditional CSR can also be viewed as fertile testing ground – much like an R&D lab – for the development of shared value.

As Aakhus & Bzdak point out in their review, several of the examples held up as shared value conquests originated from CSR activities. The authors cite the rise of the Cisco Networking Academy from a simple charitable act and claim there was a “fortuitous” fit between shared value principles and Nestle’s milk district strategy in India – which was motivated by reputation management.

These are valid concerns that need to be examined and explained.

CSR encompasses a lot of things, ranging from quasi-philanthropic activities through to complex, strategic partnerships between business and society. In fact, the CSR net is so wide that we can think of shared value as a subset – or specific application – of CSR.

The language of this debate also lends itself to confusion. Read more →

Effective partnerships require powerful perception

What role will partnerships play in your future?

I recently ran a workshop on forming effective partnerships for community-based groups who were looking to increase their corporate sector involvement, and a key learning from the program is that you need a powerful perception of yourself to play the partnering game. This is valid for all organisations and not just those with a business – community flavour.

Too often we are blinded by the inside-in view that we have of our own organisations. This is not a criticism; it is a fact of life. When you are intimately involved with your own workplace and its day-to-day challenges then you tend see things differently to someone sitting outside that realm.

To form effective partnerships, a fundamental building block is creating mutual value for both partners. As we know, personal relationships are prone to failure if they are one-sided.

How do you determine what you have that may be valued by others?

Read more →

Should business profit from community partnerships?

Microsoft profits from community partnerships. So do Australian companies like Stockland, AMP, NAB and Westpac. Does this sit well with you?

If you have a skerrick of social conscience in your body, then the idea of business profiting from community partnerships may get your back up. On the other hand, if you yearn for business to really care about the community and help make a sustained and positive impact, then I’d argue that it needs to profit from doing so.

To make the case, let’s look at the three basic types of business and community interactions in turn, and consider their motivations and benefits:

1. Corporate philanthropy

I’m talking about business strategies and actions, and not the actions of foundations that sit alongside major companies.

To give is a good thing, and for businesses to donate money is fine. The problem with this form of giving is that both sides may be missing out on opportunities to drive their dollar further, and fall short in terms of potential impact.

Read more →

Why cluster development is good for business

If we look at the wine industry in Australia or the IT sector in Silicon Valley, California, we see how the development of clusters can improve the prospects of a region or industry, driving productivity, innovation and competitiveness.

What role do social factors play in this process?

Michael Porter has been advocating the power of clusters for many years^[1]. Along with Mark Kramer, he has explored the social dimensions of cluster development.

Read more →