Platt Perspective on Business and Technology

Keeping innovation fresh – 6: coordinately managing and maintaining old and new – 2

Posted in strategy and planning by Timothy Platt on February 21, 2012

This is my sixth installment in a series on innovation, and more specifically on serial innovation and the development of ongoing new sources of unique value propositions within an organization (see Business Strategy and Operations – 2, postings 243, 246 and 248-250 for parts 1-5.)

I developed two brief case studies in parallel in Part 2 and Part 3, analyzing Edison’s Menlo Park facility and the Xerox PARC facility as it was set up and operated in the 1970’s as innovation factories, and with a focus on how and why Edison’s facility was a commercial success, while Xerox’s was not. Then in Part 4 and in Part 5 I began a discussion of best practices for connecting sources of innovation and disruptive change, into ongoing business systems and production. My goal in this posting is to further flesh out the operational and strategic approach that I began outlining there.

I began this with a discussion of functional areas of the overall business that focus on the here and now of current products and services, current markets and their customers and potential customers, and bring them together with completed transactions. In Part 5, I touched on the issues and challenges of silo walls and barriers to communication and coordinated action and I repeat a core point from that posting here:

• An innovation center cannot effectively bring value to its parent company if that company’s ongoing operations and strategy, and its corporate culture do not let their innovations in. And true disruptive innovation and the New are at least as disruptive within the organizations that build from them, as they are for the outside marketplaces and consumers who would buy into these innovations as end users.

So an innovation center and potential innovation factory – geared towards finding and developing the new and disruptive innovation and again and again can only succeed if the current business-focused organization that it would feed into for bringing its innovations to market, is open in its communications and open to change too. It in effect has to be ready and perhaps even on a steady, ongoing basis to seeing it’s here and now destroyed in the process of building its future.

Xerox was never able to capitalize on any of the very genuine flow of disruptively creative excellence that came out of the Xerox PARC of the 1970’s precisely because it could not let go of its here and now and accept the types of change into the unknown that embracing these new technologies would have required. Other businesses, and primarily startups did that and they were the businesses that built the new industries that were inherently potential in those innovations.

• But what of the innovation centers themselves? What role did Xerox PARC’s organizational systems: operational and strategic, and its corporate culture play in causing and sustaining this disconnect with Xerox, the parent company?

That is an issue that I can ultimately, only speculate on but there are some points that come up as very likely contributing factors, and certainly as factors that need to be taken into account by other innovating organizations. And I start with a metaphor – a track event relay race where runners complete their circuits of the field and pass a baton on to the next runner for them to carry as they run and complete their circuits of the track. In my metaphor the parent company and its ongoing here and now operations, production systems and marketing and sales, and its overall strategic vision are runner number two. And the innovation center that would develop for a next generation marketplace for it is the first runner. And if that baton fumbles and the second runner cannot smoothly take off with it the whole team will loose and it is not going to matter as far as that is concerned, which of these two runners fumbled in making the baton exchange.

What should the innovation center do in order to effectively carry out its part of this exchange, so the very genuine innovations it comes up with and develops into prototypes, gets picked up effectively by the mainstream production systems of the overall business so they can run with them?

I go back to Edison and his business model here. He, as an extreme, insisted that any potential innovation worked on at his Menlo Park facility had to start out with a specific marketable end product or service in mind. I do not go that far in my thinking and in fact do see real value in blue sky thinking and in exploring innovative ideas before you know how they might be developed into specific marketable products and services. But an innovation center will not succeed in contributing to the development and creation of marketable products or services if a connection is never made with table of organization lines responsible for managing and producing for the marketplace.

I think of this in terms of developing an innovation development funnel:

• Start out throwing a wide net and exploring innovative potential with an open mind.
• If you start out by limiting what you can look for and explore to the obviously marketable you will lose out on opportunity for finding and developing the truly novel and the innovations most capable of creating bases for new industries and blue ocean strategies.
• If you start out limiting yourself and the people you work with, with a demand that any potential innovation must pay off, you pressure your creative staff to limit themselves to more minor and incremental change and to variations on the already here and now. People need assurances that is it alright to fail and that failure with learning from that can be an essential step towards success. In this I note that Edison tried and failed hundreds of times as he sought out a workable light bulb filament before he achieved success with this invention. Here I allow for creative failure in even initially defining the basic innovation under exploration and development, as well as creative failure in figuring out how to prototype it into an actualized product.
• And search through and filter out the innovations that are moving in a direction towards that prototype stage and develop and present them as next generation products and services for the main business development and production lines.

My next posting in this series is going to outline an approach for operationalizing this, and I note in that context that if Xerox PARC tells us any one single lesson, it is that good, creative, insightful, innovation will not simply rise to the top by chance and be brought from the lab into marketable production without operational processes to help it along. So my next posting is going to be about transitions and translation, and with a model drawn from the pharmaceutical industry – translational research as a starting point. Meanwhile, you can find this and related postings at Business Strategy and Operations – 2 (and also see Business Strategy and Operations.)

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