Innovation, Innovation Everywhere

I just finished speaking to a friend, who had barely finished listening to C.K.Prahalad speak in an internal meet today - he said CKP’s thrust of the discussion today was Innovation. We recently covered Gary Hamel writing in the latest issue of HBR, on management innovation that can create long-lasting advantage when it meets at least one of three conditions:
- It is based on a novel principle that challenges the orthodoxy;
- Iit is systemic, involving a range of processes and methods; or
- It is part of a program of invention, where progress compounds over time

Geoffrey Moore recently wrote "The more established your company, the less likely it is a type for you to specialize in. Alternatives include application innovation, product innovation, platform innovation, line extension innovation, design innovation, marketing innovation, experiential innovation, value engineering innovation, integration innovation, process innovation, value migration innovation, and acquisition innovation. This last one, in particular, is usually an established enterprise's best bet for dealing with disruption"

Courtesy of Innovation Insider came across this excellent piece by Subroto Bagchi titled Different Layers Of Innovation. Subroto, a brilliant writer on management topics, starts by postulating that with inclusive view of things the mind leaps forth with neither ideas that nest neither in the present nor the past.Inclusion is about feelings for people and situations that are twice removed from us.When we can build an idea that makes a difference to people and situations twice removed from where we stand, it is bound to be innovative. He points out the serving immediate customer’s better can be served by creating a linear extension of your offering to serve them better, it is not necessary to create something innovative. Some thing “new and improved”, something that is “renovated” is good enough. On the other hand, if you wanted to make a tangible difference to your customer’s customer or your supplier’s supplier, it would call for innovative thinking. Only such thinking creates competitive advantage by expanding the sphere of influence. To be able to bring people who are twice removed into the fold of your beneficial impact, you have to think inclusively. Inclusion as an act leads to connecting with people, their needs, their thoughts and their desires at an existential level. It is at that level that the quality of human thought is at its creative best.

Only that quality of thought leads to products, services and processes that provide new and disproportionate value. Innovation stems from converting knowledge into something valuable. According to INSEAD’s Yves Doz, we relate to knowledge at three different levels:
- At the lowest level, we relate to knowledge in a technical context. At this level, knowledge is about specifications handed out to engineers who need to create something out of it. This constitutes a layer of knowledge, which can be called adaptive.

- At the next higher level rests the intermediate layer known as the experiential layer of knowledge. This level is not about technical specifications and functionality - it is about getting into the shoes of the end-user. Eg – Nissan designing the car suited for European markets.

- Beyond this level is what Doz calls the existential layer, in which knowledge is not about getting into the shoes of the customer but, rather, about the ability to “creep into the minds” of customers. When Sony designed the Walkman, it was operating at this level.

Pointing out that each of the three levels is separated by a glass ceiling, he highlights that the movement across these layers do not happen as a natural process and value in each layer is created from how we relate to a given body of knowledge. Innovation is possible at each level, but breathtaking, discontinuous and memorable innovation takes place only when we are able to think at the highest level. I wish all the high growth service companies focussing on plain operational efficiencies and centering on technology adaptations focus on such things. A distinguished colleague of mine said that the present management of HP, while may seen to operationally delivering well,may actually cut at the bedrock of HP's long term success by not adequately trying out new innovative things. An innovation related metric for all the promising companies are a must focus factor.