Influencers – social networks in action

For those interested in the way in which social networks can be used to foster and diffuse innovations, this recent short documentary speaks volumes about the role of one key member: The Influencer.

INFLUENCERS FULL VERSION from R+I creative on Vimeo.

Written and Directed by Paul Rojanathara and Davis Johnson, the film is a snapshot of New York influential creatives (advertising, design, fashion and entertainment) who are shaping today’s pop culture. While focused on one city it seems to reveal the essential traits necessary to influence, regardless of in which social network you reside.

See the website for the documentary here.

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Co-creating innovation—a better participation experience

To further the appreciation of culture among all the people, to increase respect for the creative individual, to widen participation by all the processes and fulfillments of art—this is one of the fascinating challenges of these days.
- John F. Kennedy

Innovation, certainly open innovation, is an invitation to participate in a shared experience of co-creation. It asks everyone involved to come to the table ready to fully engage and give of themselves to the best of their ability. This doesn’t happen of its own accord unless there are some basic elements in place to create an environment in which trust can be generated over time. One of the ways to create the conditions for trust is to orient the environment toward the participants, to make it as accessible and engaging as possible.

The process of creating an engaging environment may begin with relative simplicity, but as anyone who specializes in environmental psychology will tell you, it can become quite complex over time. This interdisciplinary field of psychology focuses on the interplay between humans and their surroundings. In the need for the acceleration of creating an innovation space that supports the formation of trusting working relationships, the primary focus is on one attribute in particular: prospection. As defined by Daniel Gilbert in his book Stumbling on Happiness, this is “the act of looking forward in time or considering the future.”

Anticipating is (almost) everything
Prospection is driven most explicitly by our ability to imagine—a critical ingredient in forming innovations—and an environment that invites this positive behavior is one in which innovation may not only take root, but thrive. Like its root word, prospecting, prospection is concerned with anticipation of some type of benefit. In the case of innovation, that benefit is, a novel solution to a compelling need that generates value.

To generate the kind of positive outcomes we seek in our organizations, this process of anticipation needs to be jointly experienced. As a driver of behavior, anticipation increases enthusiasm, often with a corresponding ability to delay gratification that can move like a contagion across a group. Factors that contribute to bias toward anticipation are making thinking visible—the actual in-process outputs of the innovation experience—as well as creating a way to stage the development of ideas over time. Seeing and feeling the results of ethnographic research in terms of videoed interviews, or the volume of Post-It notes concepts generated via brainstorming, or the material outputs from a prototyping exercise can all contribute to the physical reinforcement of a positive outcome.

This kind of anticipation, the focus on prospection, can be self-fulfilling. It generates a momentum that is difficult to create or sustain without the benefit of physical cues in the environment. With them, the pace of innovation may be accelerated.

How else might we better support broader participation in innovation?

Collaborative toolkits
Such happiness as life is capable of comes from the full participation of all our powers in the endeavor to wrest from each changing situation of experience its own full and unique meaning.
- John Dewey

For some organizations, creating comfortable, relatively quiet locations where participants can always meet, with food and beverages available to share and materials to support creative output, yields positive outputs. Why? By establishing differentiated spaces for innovation activities, the behavior that occurred in those spaces is also differentiated. Some organizations pride themselves on the diversity of their physical spaces. Advertising agencies have been known to create unique, client-centric spaces, in which they will focus on the products and services of those clients. Product development consultancies also create divergent work environments as mental and emotional triggers to support the creativity desired for innovation. One such firm in Pittsburgh, Pennsylvania, Inventionland, has created a workspace filled with pirate ships, raceways, and tree houses. This may seem quite trite until you learn that Inventionland is the inspiration for 2,000 to 2,400 brand-new inventions each year licensed and secured by businesses.

The provision of work spaces that support innovation participation is not relegated to the physical world only. Consider the impact that online collaboration tools may have on people who are not geographically co-located. Most social networking sites have support capabilities for group or project organizers—SharePoint has long been used for this purpose, Google Aps like Google Docs is used to do this, too. Even tools like WebEx or Adobe Connect offer ways to use virtual whiteboards. Sometimes it may be as simple as a series of emails to support team members that can make all the difference in fostering participation. The key is to choose those structures and tools that will be most meaningful given the organization culture in place in your enterprise.

With the appropriate environmental conditions in place, fostering innovation participation becomes an easier prospect. Be clear about goals and the tools required to meet them. Be clear about the skills necessary to achieve your goals and the people who can provide them. Create a space to act as a crucible to bring them together and get out of the way. With the stage set, and managed, co-creating innovation will be something to look forward to and the opportunity to delight will present itself.

What environmental conditions and tools do you recommend for fostering innovation participation in your enterprise?

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Is it hot in here? A review of Stoking Your Innovation Bonfire by Braden Kelley

For those of you who don’t know Braden Kelley, he is one of several thought-leader, whirling dervishes in the innovation space. Braden is the founder and executive editor of the innovation hub, Blogging Innovation, and most recently is the author of Stoking Your Innovation Bonfire: A Roadmap to a Sustainable Culture of Ingenuity and Purpose. This readily accessible offering is focused on getting the fundamentals of innovation right. It directly addressed key obstacles that cripple innovation in organizations, regardless of their initial innovation successes.

It should be noted that I know Braden and admire his work in innovation. That said, I purchased the book myself (Kindle edition) and have every intention of offering a clear perspective. When I make recommendations I fully understand that my reputation is on the line, too. So, I am pleased to be able to offer a strong endorsement for this book. For anyone interested in innovation in their organization, the ideas presented matter.

One of my favorite features in this obviously well-researched effort is the devotion to case studies. Braden uses the case studies to both highlight best practices and shortcomings in innovation and the wide range makes his thinking relevant to people across all industries and levels in organizations. Interestingly, while many authors have positioned Apple’s journey as one of a paragon of innovation virtue, Braden takes the time to truly unpack and review Apple’s overnight innovation success. His attention to detail means that we begin to understand how hard innovation can be, even for the best, and what we can do to address the blockages to success head on.

Now, for those hoping to find a silver bullet for innovation success, this book is not for you. Stoking Your Innovation Bonfire is focused on providing the reader with practical, incremental steps that can be taken to build innovation effectiveness over time. There are no quick fixes. There are no simple solutions. On offer is solid advice, clearly presented. It is not ground breaking, but to perfectly clear, that’s not what is needed. People need to understand that for innovation to matter in an enterprise and to be sustained over time the basic tenets that Braden identifies and clearly explains need to be in place. Without them the opportunity to fail will present itself quite readily.

The book’s natural progression from vision and strategy through to organization psychology and innovating under crisis conditions makes this a useful guide to keep at hand as you continue on your innovation journey. Braden notes, and I wholeheartedly agree, that there are fundamentals without which you will not be successful. He clearly describes the challenges and offers sensible solutions for addressing them. His approach is to create the culture and systems and processes that will support innovation for the long-term.

Perhaps one of my favorite sections is titled “Saying No in the Right Way.” So many times I have seen the passion of innovators in organizations run aground on the negativity attendant with the strategic (and sometimes, not-so-strategic) decision-making surrounding which opportunities to pursue and which to abandon. Braden addresses the ego inherent in people sharing and evaluating their ideas in a public domain. He also notes that sometimes the smartest people in the room have the least capability to explain or develop their ideas in order to make their invention an innovation reality. The approach he recommends is to foster trust by understanding the skills that people bring to the table before you go down the innovation road as well as set clear expectations for the process of selection. All of which requires preparation.

Ultimately, the investments you make in creating clear communications around your idea evaluation policies and processes, and in maintaining their transparency, will be repaid tenfold. Innovation ideas will continue to flow only as long as there is trust and faith in the healthy operation of the process.

Which is the heart of the matter. If you want to innovate you cannot simply jump in and expect the best outcomes. You need to think and prepare. That does not mean you must prepare to perfection. But you do need to have the elements in place, the basic framework that will support your collaborative efforts, to keep your innovation efforts heading in the right direction. Like a bonfire, innovation burns best and brightest when it has a stable structure to which you can keep adding fuel. If your organization is struggling to get its innovation efforts off the ground, or if you feel it has lost its way, then you should take a look at Stoking Your Innovation Bonfire, it will help your business rebuild its hidden or lost innovation capabilities.

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Recognition as a force to foster innovation

Sometimes, the wide range of things that must be accomplished to improve an organization’s innovation culture can be overwhelming. The sheer range of available actions along with the anticipated complexity of their implementation can cause one to feel like a small woodland creature caught in the headlights of a large truck. Or, worse yet, may simply cause you to want to sit in a corner and quietly cry yourself to sleep. Sorry, was that out loud?

Nevertheless, there are some simple steps that, when repeated, can create an engine that will drive innovation practices across your enterprise.

Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got.
Peter Drucker

Recognition is the key ingredient to get things moving.

Recognition is not the ability to identify something, although that helps. What we’ll focus on here is the systematic observation and public witnessing of the right kinds of behaviors in the organization. It means “catching people doing the right thing,” and believe me, as a practitioner, it is much more fun for the giver and receiver than any performance management system focused on finding fault and making corrections. The power of recognition is that it can be simple, readily applied, and the knock-on effects can have enduring positive impacts that may carry on repeatedly.

Measure for measure
Count what is countable, measure what is measurable. What is not measurable, make measurable.
- Various attributions (the more common variant meme: “If you cannot measure it, you cannot manage it.”)

Measurement is an important factor in the recognition of innovation-supporting actions. The challenge with measurement is in selecting the appropriate measures of performance to assess the progress toward a desired set of outcomes. If we choose metrics less than wisely, we can find that our actual performance and our desired performance slowly drift apart. The same can be said of recognition. As an acknowledgment of performance against expectations, choosing where and how recognition should be applied must also be considered just as wisely as what we measure.

When we decide to recognize performance, we come up hard against the realities of measurement in our organization. We soon discover that we are actually required to manage what we cannot measure. Innovation is an especially difficult area in which to define absolute measures. When we attempt to do so, we realize that not everything that can be measured should be managed, and that not everything that must be managed can be measured. Innovation recognition requires us to focus on movement toward desired actions rather than any hard and fast outcomes. It may also mean some missteps as we become clearer about what we need to recognize in order to move our unique culture in the appropriate direction.

One of the greatest management principles is that the things that get recognized get done again. If you’re looking to create innovation momentum, look for the behaviors you want to recognize, and explicitly tell the organization what you’re looking for, whether it’s deeper customer observations, more ideation, or faster prototyping. Be clear and be repetitive. You get more of the behavior you recognize, but you certainly will not get what you merely hope for, wish for, or beg for. Better yet, when you do see the behavior you were looking for, don’t wait a moment–make the recognition immediate, visible, and shareable.

From a performance management perspective, the closer you can tie individual (or group) performance and action to it being recognized, the stronger the tie will be in the eyes of the receivers and any observers. Any time separating their performance and its recognition, means the opportunity to foster the needed behavior diminishes rapidly.

Remember, recognition systems are much more than just bonus plans and stock options. While it is certainly possible to include both of these incentives, they can also include awards and other rewards, such as promotions, reassignment, non-monetary bonuses (e.g., vacations), or a simple thank-you. Above all, make recognition a production.

Recognition is all about seeing
Sawubona – “I see you” (traditional isiZulu greeting)

In their most recent book, Switch, Chip and Dan Heath discuss how to create change when change is hard. Fostering an innovation-capable culture is hard work. One of the earliest concepts in their work is the notion of being able to “find the bright spot.” This concept is firmly tied to the work on appreciative inquiry of David Cooperrider, a professor at Case Western Reserve University. Finding the bright spot means looking diligently for and highlighting that which is going right. It means making the success, no matter how small-seeming, a visible and desirous outcome. They are “successful efforts worth emulating.”

Recognition is about identifying and promoting the desired innovation-focus behavior. The reason to focus on recognition rather than reward systems is because recognition elicits a psychological benefit, whereas reward indicates a financial or physical benefit. Although many elements of designing, managing, and sustaining reward and recognition systems are similar, it is useful to keep this difference in mind, especially for small business owners interested in motivating staffs while keeping costs low. Additionally, recognition is great for early stage and in-process outcomes essential for behavior change, while rewards are generally end-stage and conclusive-results focused.

Being prepared to recognize is key. Some simple guidelines include:
• Create goals and action plans for innovation-supporting behavior recognition,
• Maintain fairness, clarity, and consistency in recognition, and,
• Set guidelines so all leaders acknowledge equivalent and similar contributions.

In order to develop an effective recognition program, leaders must be sure to separate it from the company’s reward program. This ensures a focus on recognizing the efforts of organization members. Effective recognition should be sincere; applied consistently and fairly; noise-free (not combined with other reporting activities); timely and frequent (especially when fostering early behavior changes so that no one’s efforts are overlooked); flexible; appropriate; and specific (specific in terms of what it recognizes and specific in terms of how it recognizes the desired behavior). See people do the right thing, early and often.

It is important that every action that supports a company’s innovation goals be recognized, whether through informal feedback or formal company-wide recognition. All members should have the same opportunity to receive recognition for their work, too. Finally, a common understanding of the behaviors or actions to be recognized should be shared. One way you can ensure this is by visibly and explicitly describing what actions will be recognized, and then reinforcing this by communicating exactly what someone did to be recognized.

How are you recognizing your bright spots and capitalizing on them?

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Make the most referrals to the Innovation Culture Survey – $500 prize at stake

As part of our ongoing research into how organizations are building innovation-capable cultures, Primed Associates is conducting a new survey on the drivers of innovation culture. This survey will assess the current state of an organization’s support for processes, systems and behaviors that influence its culture of innovation.

Now, here are the incentives to participate:
All participants will be provided with an executive summary of the survey’s findings at it’s conclusion. This will help you make better choices about how to better support innovation in your organization.
AND if you refer someone to this survey (and they identify you by your email address as referring them when they complete the survey) you are in the running to receive a thank you gift with a value up to $500. The person with the most referrals while the survey is open will rewarded as soon as the survey is closed and results have been tabulated.

And with kind thanks to Braden Kelley, a signed copy of Stoking Your Innovation Bonfire will be awarded to the second most referrals.

The survey period is from October 6, 2010 until December 6, 2010.

Here is the survey. Thanks for your participation.

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Where Good Ideas Come From? Steven Johnson answers the question

Steven Johnson’s new book, Where Good Ideas Come From: The Natural History of Innovation, explores the way in which new ideas come into being and how innovations are derived from them.

He explores the spaces that promote innovation and the way in which it sometimes takes many years, and multiple attempts, before an idea will fully take hold. He explores the concept of the “hunch” and the fact that for an idea to become an innovation it sometimes has to be combined with one or more other hunches. All of which provide clues as to what is required in an organization culture to make it more innovation-capable

Here’s a great overview of the basic themes in the book…

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Owning What’s Next: Building a culture of innovation accountability

It is not only what we do, but also what we do not do, for which we are accountable.
- Moliere

With the rising tide of concern regarding the overuse of the word innovation, there’s a tendency to write off the term as yet another business fad. As if the overuse of the term and its application as a general panacea to every business issue requires that right-thinking people should abandon it in favor of more measured, less over-exposed, terms. How wrong that would be?

What’s required is not an abandonment of innovation but a re-commitment.

In dismissing the term innovation, we would be abandoning an intellectual investment in language and discourse that has only recently begun to transform organizations on a large scale. Just because the term may be misapplied or misused does not mean that the act of innovation has become irrelevant. If we veer away from the ongoing innovation discourse and search for other terms to apply to the practice of systematic renewal, invention, and implementation, we risk becoming caught up in semantic brinksmanship. The degree of urgency could not be much greater.

Tom Kelley, founder and former CEO of the design firm IDEO, recently said in a meeting with the senior executives of a major global player in the fashion industry, “Companies not only have to innovate, that’s simply the price of admission to today’s markets, they need to out-innovate the competition.” His direction was that we must hold ourselves to account for innovation, just as we hold ourselves to account for any other business result.

It’s time to stop messing around with language and start focusing on outcomes. We must drive the conversation toward the value of innovation, which demands accountability for innovation as a practice in our enterprises—something for which everyone should be accountable.

Stop messing around with language and get busy
Avoidance – the creation of space into which commitments disappear.

When present circumstances suggest that just surviving the day is a form of victory, it’s easy to let the future take care of itself. Any seasoned business leader would tell you that if she does that, the future will not necessarily be kind and take care of her company. Most business leaders know that they should do something to face the rising challenges within their market, to uncover and fulfill the unmet needs of their customers, but with limits on resources and only so many hours in the day, they fall short of thinking about tomorrow.

The future is unavoidable, and talking about it won’t make it any more manageable. Unless leaders choose to face it head on with the rest of their organizations, outcomes twill rarely be of their own choosing. We have to become unstuck.

One way we can help our organizations become more forward-looking is to face present circumstances by conducting a current state assessment. This could be as simple as a SWOT analysis or as complex as a total strategy and operations audit. A deeper understanding of where you are, the resources you have at hand, and the business environment you are experiencing will help you to plan for action. It is in acting that we can begin the process of discovering how to transform our organizations for the better.

One of innovation’s aims is to learn, as much as possible as fast as possible. In learning, we can define ever-improved solutions to our most complex challenges. Those challenges don’t only exist at the product or service level—they exist at the operational and strategic level of organizations. By that measure, the practice of innovation has just as much value across the entire enterprise. This recognition is imperative, and it’s to this that organizations must hold themselves to account.

Hold ourselves to account
Account – the measure of how well one meets the expectations to which we are committed.

The framework of accountability in most organizations is quite limited. Few organizations understand that accountability is a chain running across the entire organization, linking everyone together in a common purpose. Even fewer organizations actually practice this as standard operating procedure.

Being held to account for something requires, at minimum, two parties who come to agreement about expectations to be fulfilled and the actions to be completed that will fulfill that commitment. When well-practiced, it binds both in an agreement that can be monitored, managed, and measured. A fundamental ingredient in accountability is the trust between the people involved. Without it, accountabilities are fragile and often accompanied by disappointment.

For an organization seeking to grow, striving to match its strategic intent, accountability for action is critical to both immediate and long-term success. Without a culture that supports and sustains accountability, that understands the need for clear expectations and inviolable commitments, there can be only limited accomplishment of goals and objectives. That commitment starts at an individual level, but will grow across teams, groups, departments, and divisions until it becomes the air that an organization breathes.

We are accountable for our decisions in our personal life so why shouldn’t we be just as accountable in our work life.
- Catherine Pulsifer

One of the greatest frustrations for a senior leader—someone keenly committed to their organization’s success—is establishing a clear strategy and defined goals for attaining that strategy, only to see their strategic intent die from ineffective action or complete inaction. They are left dumbfounded by the experience. The lesson must be that unless the necessary groundwork is laid within the culture of the organization that fosters trust, collaboration, and a willingness to hold each other to account, there can be no happy outcome.

Results matter
Ownership – commitment to the action necessary to (or exceed) a set of expectations.

To deliver results, especially results that require us to innovate and reach beyond what is presently possible, our organizations must commit to measuring outcomes. One of the hardest transitions for many organizations is to move from the planning phase into the implementation phase. A number of recent books have talked about the necessity for execution and for implementation. They are often prescriptive, and usually offer sage advice. The counsel they offer provides a means to an end.

But in the end, it’s the end that matters.

Organizations are busier today than they have been in years. Busy-ness is not a useful pursuit. The time for talk is over. To meet the challenges of a transformed business environment, talk should be minimized; we must hold each other to account for the innovation necessary to help our organizations thrive, and we must own the outcomes. Unless we own the production of measurable and meaningful outcomes, the act of being busy will only make us feel like we’re moving. If we do not own our future, what happens next might stop us in our tracks.

How are you holding yourself to account?

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Grow a Backbone: How culture alignment supports innovation

An organization looking to extend its innovation capability faces the same prospects as a company looking to undergo a major culture transformation. The work requires focus, commitment, and persistence to achieve the desired outcome. Even those firms seeking to boost their innovation capability by acquisition or merger face the same challenges. So many mergers and acquisitions end in less than satisfying outcomes because companies are not paying attention to the details of integration and capability development. Recent research suggests that the failure rate of these actions may be as high as 70 percent.

Rather than succumbing to failure, why not build a supportive infrastructure so that your innovation efforts have a better chance of survival?

The answer does not require an overly complex response; what it does require is a measured, sustained effort that seeks to build behaviors, capabilities, and capacities over time. The greater challenges demand that anyone going down this path be clear about what they are trying to accomplish strategically, and that they have the intestinal fortitude (okay, guts) to commit to act even when it seems progress is slow or moving in reverse.

Three simple concepts can help keep an organization focused on growing its innovation backbone: creating a framework to support the new desired behaviors; establishing a set of few but strictly enforced rules to anchor those behaviors over time; and developing a shared story that gives the organization’s participants something they feel they can belong to and own.

Frames and scaffolding
High achievement always takes place in the framework of high expectation.
- Charles F. Kettering

Frames are often used in construction to provide support for a foundation as it is being poured into place (especially for concrete foundations) or until materials are locked into place (such as brick or stone footings). The framework provides stability while the long-term superstructure is being placed. Without a framework in place, the foundation might shift, possibly creating a fundamental weakness that may not be readily apparent until the structure comes crashing to the ground after use.

Scaffolding, on the other hand, enables you to renovate while still making use of an existing structure. It supports walls and facades during the course of their modification, yet it little interferes with the internal operations of a building. By placing scaffolding at key load-bearing points, and using it to access hard-to-reach places without necessarily applying any load force, major structural transformations can take place. The changes, while commonly understood to be underway given the highly visible nature of scaffolding, are only completely revealed when the scaffolding is removed.

What does this mean for supporting the development of innovation capabilities?

A basic framework for innovation might be the establishment of a common language for handling the actions of creating and implementing innovations. Design thinking, for example, is one such fundamental language and practice, which, when shared across an organization, provides a foundation for other supporting practices to flourish. With a foundation of design thinking in place across an organization, human-centered design and rapid prototyping can follow closely behind.

In the context of using scaffolding to support the renovation of an organization’s innovation practices, consider the decision-making and risk management skill sets. Both of these capabilities do little to impact existing business processes, yet they can vastly improve their efficacy. These both enable the wiser use of resources and the faster commitment to appropriate action. This reduces the cycle time for employing new skills and behaviors that are being applied to innovation efforts.

Another key practice in support of a strong innovation backbone is the creation of a limited set of rules, tightly enforced, that establish clear guidelines but provide maximum responsiveness.

Loose and tight
Rules are not necessarily sacred, principles are.
- Franklin Delano Roosevelt

Another set of factors that contribute to an organization sustaining a successful culture of innovation are loose coupling and rule-making. Loose coupling is a term introduced into organization theory that proposes that an organization creates a shorthand or abstract model of the reality in which it finds itself loosely coupled with the hard reality that actually exists. This quality enables an organization to respond flexibly and adaptively to changes in its environment. It fosters an organizational resilience that would not otherwise exist if all decisions and actions were driven only by hard data—which may or may not be readily available.

It is this resilience that is key to an organization’s strength. An ability to quickly and robustly recover from setbacks is the hallmark of a truly vital innovation culture, because these organizations are constantly placing themselves at risk through their willful exploration and implementation of change. With the resilience that loose coupling provides, organizations would fracture at the social level, which would have consequences within business processes and systems.

Another capability that, combined with loose coupling, helps create the necessary structure for effective innovation is the making of simple rules. Fewer rules means more exploration. The rules put in place are tightly managed, and set loose limits (conservation, focus, effort) on the way behaviors are governed. The rules contribute to a collective mindfulness and a focus on outcomes rather than a preoccupation with present needs.

This alignment also provides the basis for the final element in creating an organization’s backbone; the fostering of a shared story about the organization’s purpose that galvanizes participants’ actions.

Part of something greater
Such happiness as life is capable of comes from the full participation of all our powers in the endeavor to wrest from each changing situation of experience its own full and unique meaning.
- John Dewey

Much of the behavior in organizations is driven by affiliation needs. Being a part of something informs the choices we make for ourselves and for the people around us. It drives competition and the desire to improve. By creating a shared story, one that exemplifies the life of the organization and what it values, an organization’s leaders can positively influence the behavior of the participants. A vibrant story creates a crucible in which an organization can extend itself—creating an environment of renewal.

The stronger and more compelling the story, the more engaged an organization’s participants will become. This often causes a positive feedback loop in which the story of the organization becomes regenerative. The participants of the organization “own” the story, it becomes their own, and as they retell it, the story becomes more of a reflection of their commitment to the organization than an advertisement for the organization’s strategic intent.

Each retelling of elements of the organization’s story reinforces itself and reinforces the reasons why each participant commits to be an organization member. And the resulting engagement can be capitalized on by being guided and directed to innovation practices.

In order to create the best circumstances for supporting innovation, an organization’s leaders would be wise to attend to certain basic elements. They should create elemental frameworks that support their innovation intent. They should implement rules that create boundaries for performance without choking creativity out of the enterprise. And they should craft and disseminate a story that unifies the organization’s strategic intent and its operational reality. By addressing these elements, they can create an organization with a backbone that can not only support innovation but hold up the organization on the dynamic edge of change.

How strong is your organization’s backbone? And what will you do to make it stronger?

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Small Business Big Ambition: Why innovation is no surprise in the smaller enterprise

Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude.
- Thomas Jefferson

In times of uncertainty we search high and low for answers to our overarching question, “How do we dig ourselves out of the deep pile of…stuff we’re in?” If there are qualifications for uncertain times, present economic indicators demonstrate that all criteria are not only met but exceeded. And our search for answers (and perhaps a shovel) continues in haste.

With very few macro-economic levers left for government officials and public policy experts to pull as they try to shift the economy into a growth pattern, our range of vision and influence narrows. We won’t find big fixes no matter how hard we look. Larger businesses have cut costs dramatically and now find themselves with large cash reserves, waiting for the economy to turn around. They patiently await orders for more products and services, before they place any orders or invest in anything themselves. Essentially, each large enterprise is waiting for the next firm to blink.

Instead of waiting for bail-outs or big business-driven economic up-ticks, we must turn to one of the greatest sources of scalable economic activity and innovation, the small to medium enterprise, for our answers. When highly functioning, these smaller enterprises know how to: make scarcity work for them (they live it every day); work closely with their customers to meet their most pressing needs; and make rapid learning the activity that gives them momentum in the marketplace.

More with less
No complaint … is more common than that of a scarcity of money.
- Adam Smith

In the popular press (whatever that might be today!), it’s difficult to get a firm handle on what’s going on, or better yet, what could go on with small businesses. By their nature, small businesses are harder to classify and quantify than their big business brothers and sisters. If we consider the small enterprise to be a business of fewer than 200 people, it still leaves a bulk of the economic activity of most developed countries and nearly every developing country. These are the firms for whom bootstrapping is not something done only during times of economic distress, but all the time. They know how to stretch a dollar, or euro, or peso. But that’s not the only thing they know how to stretch.

Time, not just money, is a malleable resource, too. How you invest your time—and on what—drives a higher return on investment. For small businesses stretching time, doing more in a shorter period, gives them an economic leg up, especially when it comes to embracing and extending technology. Smaller firms have many advantages as innovation sources because they are quick to adopt new and high-risk initiatives; they facilitate structures that value ideas and originality; and they have a better capacity to reap substantial rewards from market share in small niche markets. This first-mover advantage was created by and for the small enterprise. It enabled them to get closer to customers other firms little-realized existed.

Closer to our customers
There’s a lot more business out there in small town America than I ever dreamed of.
- Sam Walton

By decreasing their cycle time, small enterprises can do more for their customers than most large enterprises would commit to. The small enterprise, which usually carries with it a smaller customer base, can remain closer to their customers’ various needs—a distinct advantage over many larger businesses. This means smaller firms can pick and choose where and when to provide innovative products and services. By virtue of their size, the small business can choose to invest a larger proportion of time, energy, and expertise to discover the depth of their customers’ needs, and then pursue those needs by creating innovative solutions.

This closeness to the customer experience is also driven by the need to maximize their share of their customers’ expenditures. By remaining close to the customer, the small enterprise can seize newly arising opportunities to provide value and increase revenues simultaneously. Correspondingly, by seeking to win more business by remaining close to existing customers, the cost-of-sale is driven down, which has a positive benefit to the bottom line: a positive, deep relationship is usually a more profitable relationship. And when there a fewer customers, it’s usually easier to read which ones will be more profitable than not, and that means more effective targeting for higher risk efforts that may yield greater innovation benefits.

Faster mistakes
With any loss, you want to try to regroup and learn from mistakes.
- Elena Leon

Which leads us to another reason why small enterprises are a better bet for long-term economic recovery—they are learning machines. For an employee to add to an innovative process, it may take time for them to understand the research agenda of, and challenges faced by, the firm in which they are employed; in other words, an employee may need to move up the learning curve before adding to the innovative activity of the firm. In a smaller enterprise, that learning curve may be much shorter. Existing processes and systems may be much more fluid. The amount of information to be learned and retained as working knowledge may be smaller. Better yet, the social network through which so much learning and experimentation takes place is smaller and easier to navigate, too.

For the smaller enterprise, the whole employee pool can be geared toward discovery. Each interaction, whether with an internal peer, or an external client or supplier, can be seen as an opportunity to explore possibilities. Within that exploration will be a series of hits and misses. This doesn’t mean that the inherent failures associated with trying something new within a smaller enterprise are less impactful—far from it, but it does mean that the recovery from those missteps may be easier and often shorter.

This is not to negate the impact of the larger enterprise on economic recovery, because without them there would be no recovery, as they provide a stable foundation for the broader economy. But it is to the smaller enterprise we should look for more rapid improvements. The smaller enterprise is thrifty by nature, eager to embrace its customers’ experiences, and willing to risk—through innovation—for greater reward. Unlocking the power resident within small enterprises is key to broader economic recovery. We’ll explore some of those methods in future posts.

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Cultural Leverage – A Path to Innovation Performance – OnInnovation

I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.
- Jimmy Dean

One of the greater challenges facing organizations that willingly seek to improve their innovation performance is “where to start?” Product development managers, research directors, marketing and brand specialists all face the similar, daunting prospect of wrestling their organizations into adopting new patterns and behaviors. For anyone who has been involved in change management, undertaking this kind of program is considered long and hard, because the duration of these efforts is counted not in days, weeks, or months, but in years.

In the present economic circumstances, we can’t wait that long to get our innovation engines firing. At a time like this, innovation cannot be relegated to an isolated part of the enterprise. How might we ready our organizations to embrace innovation as a practice in all areas?

For the complete post see the OnInnovation blog

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