CPH127

Deloitte has put out a new survey that has some very interesting findings in it. It’s called “Gambling with the House’s Money: The Randomness of Corporate Innovation,” and this gives a hint of the subject. (Free registration required, allows you to watch the webinar, and download a PDF of the Powerpoint.) Their finding is that the processes that many companies have in place are no better than a coin toss at nurturing winners. This is true whether the companies develop internally or work with an outside partner.

The majority of the time, respondents said that their most effective innovations came from “rogue inventors or under-the-radar skunk works” - these required savvy executives to spot the innovations and nurture them along, circumventing “official” processes. Unfortunately they don’t provide any hints as to how to better spot winners early.

What’s also interesting is what the survey reveals about why companies deny funding to budding innovations: insufficient profitability (55%); lack of consistency with existing core competencies (43%); or lack of consistency with existing strategy (41%). This means that companies have a surplus of innovations which are either promising but which they don’t know what to do with, or which are draining resources even though they don’t connect with the company’s strategy or capabilities. As I talked about in my earlier post, this is something I’ve seen anecdotally, so was intrigued to see Deloitte report on it quantitatively.

(A caveat pursuant to the earlier comments on ideas vs. innovation, the Deloitte study uses a rather inconsistent definition that’s not clearly spelled out, though they bring a bit more focus toward the end of the presentation.)

(Tip of the hat to Bruce Nussbaum for the pointer to the survey.)

A very good Times online article on the shift that we are living of seeing value in what we experience through services vs what we own and experience through objects.

• Institute of Design Strategy Conference :: Perspectives
  Organizations tend to drive for simplicity when attempting to solve complex, systemic problems. Jim Hackett, President and CEO of Steelcase Inc., observes that these practices are sweeping the rich opportunities of complexity under the carpet. Jim contend
  (tags: innovation hanshenrik iit conference complexity)

“Don’t worry about other people stealing your ideas. If you’re ideas are any good, you’ll have to ram them down people’s throats.” – Howard Aiken, IBM Engineer

This is my favorite quote at the moment, and it gets a smile from everyone. Why? Because we’ve all seen great ideas get squashed, misinterpreted beyond all recognition, or just plain lost in the bureaucratic cracks. The problem today is, there are lots of great ideas swimming around, the problem is spotting which ones are applicable to the business, and nurturing them past their seedling status to become concrete and actionable in a way that is broadly understood within the organization.

Innovation is currently the holy grail of many companies, but too often it is treated as an end rather than a means. Innovation is simply a tool, and as with any tool it can be used effectively and ineffectively, but simply having it doesn’t give you a competitive advantage. For the most part, I would argue, any company worth their salt has dramtically improved their innovation capabilities in-house, or they can easily acquire innovation from outside firms. Procter & Gamble until recently was not considered a particularly innovative company, but they executed better than anyone. Now they are ramping up their internal innovation capabilities, which when combined with their proven execution abilities, is making for a very powerful one-two punch.

This has raised the competitive bar significantly, and means that companies must work harder to identify new growth opportunities that will get them ahead of the competition. Everyone has improved, and all the "obvious" stuff has been done. This is why innovation is valued so highly today, but by itself it is not enough.

I’ll make a perhaps provocative statement: Innovation is not the hard part anymore, and we are in fact in a state of innovation surplus. The challenge now is less coming up with innovations, but identifying which of the available innovations best support new business opportunities, and seeing how those opportunities support top level business goals.

A common problem is that top-level business goals are stated so broadly or vaguely that they are less than helpful when trying to identify the best opportunities and innovations to pursue from a suite of available options. How do you decide if, for example, the top-level goal of “Create Growth” is best satisfied with a new technology that improves product performance by 20% and will allow you to take market share from your current competitors; or instead should you innovate new products or variants that will allow you to tap into new markets (though require new sales channels and brand positioning)? More clarity is needed.

At the About, With & For conference last October I gave a talk on “wicked problems”, which I’ve been thinking about recently as I believe they are what stand between accurately connecting top-level business challenges with selections of innovations.

I first came across this phrase over ten years ago in an essay by Richard Buchanan called "Wicked Problems in Design Thinking" (it originally appeared in Design Issues and was subsequently included in the anthology The Idea of Design. I was immediately intrigued, but over time forgot about the concept. I was reminded of it again about a year ago and started pursing the concept more vigourously, and was struck by the fact that a) with few exceptions such as Dr. Jeff Conklin, almost no-one had done anything with the idea, and b) that it had tremendous relevance to the types of problems I see clients grappling with in my work at frog design.

"Wicked problems" was a term first coined by an urban planner named Horst Rittel in the 1970’s, when he recognized a new class of problems arising from extreme degrees of uncertainty, risk, and social complexity. He was dealing with issues such as crime, poverty, and racial segregation that were the outcomes of the planned housing projects of the 1950’s and 60’s. He recognized that not only was there no clear answer, there was not even a clear understanding of the problem they were trying to solve.

This is in contrast to the other types of problems we are more familiar with, which Nancy Roberts, an instructor at the Monterey Naval Post Graduate School, classifies as:

Simple problems: Both the problem and the solution are known. Example: You have a leak under your kitchen sink. It’s obvious what the problem is, and two plumbers will likely agree on what the solution is.

Complex problems: The problem is known but the solution is not. Example: You need to design a higher capacity disk drive. The problem is clear (though defining “higher capacity” needs to be agreed on), but understanding how to solve that problem is far from clear.

Wicked problems go beyond these in terms of difficulty, largely because they are inherently social in nature. Rittel identified several key aspects which, once listed, you will likely recognize as features of your toughest business decisions (this is not an exhaustive list, I’m paraphrasing a bit):

1. There is no definitive statement of the problem; in fact, there is broad disagreement on what ‘the problem’ is
2. Without a definitive statement of the problem, there can be no definitive solution and therefore no “stopping rule” signaling when an optimum solution has been reached. In actuality, there are competing solutions that activate a great deal of discord among stakeholders
3. The only way to really understand the problem is by devising solutions and seeing how they further knowledge about the problem (thus reversing the normal flow of thinking: with wicked problems, a solution must come before the problem!)
4. Solutions to wicked problems are not right or wrong, merely better, worse, good enough or not good enough. There is a high degree of subjectivity and each stakeholder brings their own perception to the table, causing discord.

Because they are so difficult to identify and define, wicked problems tend to go unaddressed, even if there is an underlying sense that something needs to be done (though about what exactly no-one can say).

So how do you deal with such intractable problems? In my AWF talk I followed the theme of the conference - work and play - by using sports analogies to identify a number of capabilities and states of mind that are valuable in addressing wicked problems. These are:

• Having wide peripheral vision to spot opportunities and threats at the edges
  Using pattern experience to sense the shape of wicked problems before hard proof is available
• Treat solutions as questions
• Have a high panic threshold and don’t be tempted to "tame" the problem prematurely
• Treat wicked problems as a full contact sport - get the whole system in one room and hash it out, and stay close to your customers

My plan is to do follow-up posts on my own blog to explore each of these in more depth.

Since the very beginning of CPH127 my main interest has been on the organizational side of what innovations is all about. And yes, the design discipline has a lot to offer in that respect.

I have – and a lot of the other pilots at CPH127 too – mentioned several different approaches toward how innovation can be approached.

Back in December I wrote about Open Sourced Leadership – in that post, among others, I described the “term” pull as a factor – as a mindset – for growth, innovation, value-creation, future business development.

Last weekend I read a very interesting piece “From Push to Pull – Emerging Models for Mobilizing Resources” and it stroke me that everything I meant back then is written down in that article. Not that my mind was all set, is all set, but it’s very good put and definitely a worth read.

John Hagel & John Seely Brown seems to have set the lens on a “new” model for mobilizing resources. Rather than “push”, the new approach focuses on “pull” – creating platforms that help people to mobilize appropriate resources when the need arise.

2 X John state further that pull models emerge as a response to growing uncertainty. Did anyone say complexity?

They also state that pull models treat people as networked creators, even when they are producers or customers purchasing goods and services. Did anyone say weblogs, social software or Web2.0?

Read the article – it’s a good one

• Unraveling Complexity in Products and Services - Knowledge@Wharton
  Walk into any grocery store, bank, or insurance agency, and you will see complexity at work: More products and services are available to consumers than ever before. But, as businesses increase their product and service portfolios in response to evolving c
  (tags: complexity designthinking designstrategy hanshenrik)
• Complex Systems, Systems Theory, Sociotechnical Systems, Self-Adaptive Systems, and Chaos Theory
  “Where chaos begins, classical science stops. For as long as the world has had physicists inquiring into the laws of nature, it has suffered a special ignorance about disorder in the atmosphere, in the fluctuations of the wildlife populations, in the osci
  (tags: chaos complexity reference technology theory systems hanshenrik)

A very interesting seminar on “creative communities and social innovation” is happening in Helsinki this friday. With such big names as Ezio Manzini, John Thackara, Francois Jégou this seminar is about:

“framing the welfare and care story as a series of design opportunities.”

Anyone going??? Anyone blogging???

via Doors of Perception

• Design Council | About Design
  This section features in-depth information and advice on design issues and disciplines. You can access it through the links on the right or by using the Flash browser through the link below.
  (tags: design designthinking red hanshenrik)
• Design Council | Our Publications
  The Design Council knowledge cards summarise a unique resource of online in-depth information compiled by expert authors on design topics and issues that matter.
  (tags: postcard red design-centric design designthinking hanshenrik)

• CfPC > Design Anthropology
  The ethnographic approach to studying users and their work practices, pioneered at Xerox PARC, has proven extremely powerful when designing complex machinery and computer support. In previous work the MCI group has shown how participatory design technique
  (tags: design anthropology hanshenrik)
• Savage Minds: Notes and Queries in Anthropology — A Group Blog » Neoliberalism: Good. Spy Museum: Better.
  Savage Minds is a collective web log devoted to both bringing anthropology to a wider audience as well as providing an online forum for discussing the latest developments in the field. We are a group of Ph.D. students and professors teaching and studying
  (tags: anthropology design designthinking hanshenrik)

Important agitator of the swiss economy.

In the world of the internet we went through 3 phases: the years of the pioneers 1997 then the golden rush till 2001 and then the ordinary people’s revolution. The open economy is made by ordinary people and who are trying to bring change.

What are the key factors that are making this happen. The old economy is not crashing the new one. We are now in a new economy where there are 3 basic components: transformactors, cumactors and new business models. These are terms that will help design what is happening.

Transformactors: People who are helping digitize old algorithm and transform human action into algorithms. (digitization of banking)

Cunsumactors: active consumers who are helping finish the product. In the sense of doer. For corporations it is a big change, you have to produce something that people will finish and add value to the product. People are in a new relationship with products.

Media is changing because of blogs. The driving force of the new economy is the people who are behind it. This new economy is linked to the old/new economy but not the old economy.

eg e-banking. It is only algorithm, there is noone there. The organization of the bank is rethought completely. Half of the users are less than 32. When theses people grow old, these people are going to keep use e-banking. the trends in e-banking are internet users use increase, low cost banking because high productivity, transparency, and self service.

Ref: Alain de Vulpian : From a rigidly regulated mass society to a living networking society.