Platt Perspective on Business and Technology

Innovation, disruptive innovation and market volatility 34: innovative business development and the tools that drive it 4

Posted in business and convergent technologies, macroeconomics by Timothy Platt on July 25, 2017

This is my 34th posting to a series on the economics of innovation, and on how change and innovation can be defined and analyzed in economic and related risk management terms (see Macroeconomics and Business, posting 173 and loosely following for Parts 1-5 and Macroeconomics and Business 2, posting 203 and loosely following for Parts 6-33.)

I began Part 33 of this by repeating a to-address list of points that I am now working my way through. And I repeat this list here for smoother continuity of narrative, as I continue systematically addressing its issues:

1. Innovation and its realization are information and knowledge driven.
2. And the availability and effective use of raw information and of more processed knowledge developed from it, coupled with an ability to look beyond the usual blinders of how that information and knowledge would be more routinely viewed and understood, to see wider possibilities inherent in it,
3. Make innovation and its practical realization possible and actively drive them.
4. Information availability serves as an innovation driver, and business systems friction and the resistance to enabling and using available business intelligence that that creates, significantly set the boundaries that would distinguish between innovation per se and disruptively novel innovation as it would be perceived and understood
5. And in both the likelihood and opportunity for achieving the later, and for determining the likelihood of a true disruptive innovation being developed and refined to value creating fruition if one is attempted.

I at least initially dealt with Point 1 of this list in Part 32, and its Point 2 in Part 33. And I turn here to consider the above restated Point 3 in that same vein. And to be more specific here, I used Points 1 and 2 of this list to at least briefly sketch out a fundamental problem:

• A fundamental challenge that businesses face when they simultaneously seek to safeguard sensitive and confidential proprietary business information,
• And still remain open to the possibilities of developing and capitalizing on innovation, and even disruptively novel innovation where new communications patterns and information sharing allowances might be needed in order to effectively bring the right combinations of expertise together for that.

Rules based information access systems, of necessity are always built and implemented in terms of a business’ current here and now, and in terms of current information sharing needs – assuming of course that they are kept that up to date. Innovation and disruptive innovation in particular can demand new and novel there, as previously unconsidered combinations of personnel and unconsidered combinations of expertise and experience that they could offer become essential if their business is to develop its next step-forward future.

And this brings me directly to the above Point 3, and implementation. And it also brings me back to a specific business organization approach to making an enterprise more effectively innovative in practice, that I initially offered in my 2012 series: Keeping Innovation Fresh (see Business Strategy and Operations – 2, postings 241 and following, and in particular, see its Part 7 and following where I discuss transition committees.)

• A well organized and run transition committee serves the business that it operates in by helping to identify innovation opportunity that is being developed in-house, that holds potential for offering value to the business if further developed into fully practical implementation. And such a committee helps to facilitate this transition from proof of principle and concept, to practical realization. It bridges the gap between research and conceptualization and its output, and practical implementation that can be brought to market.
• For purposes of this series, consider that a second step to a larger and more comprehensive overall process and system of them that any successful in-house innovation has to traverse if it is to succeed and become a value creating part of the business that it first arises in. My focus here is on what precedes that step, in bringing the personnel and other necessary resources together to make development of initial innovative potential possible. And bringing together both the necessary people and the necessary information that they would develop New from, is crucial there.

In practice, the same people who comprise a transition committee might also find themselves responsible for championing the initial first step in the creation of potential new innovation too, from the initial idea stage. And having such an innovation-supportive group within a business is all but certain to at least help in that direction. But in practice, no single group of employees and managers can do all of this alone, and with anything like the reach into their business that they would need for that and across the full sweep of their table of organization. Keep in mind here that some of the most creative and ultimately valuable initial innovation ideas, can and do come from unexpected directions in an organization.

Making the first half of this system of processes work: making the first initial innovation identifying and supporting and enabling step work, calls for participation by both lower and middle managers who those creative hands-on employees report to, and participation from the risk management people who set and administer information access and sharing policy and their rules-based implementation.

I have said this before in this blog; this means supporting employees and managers who would step out beyond their routine day-to-day to attempt new, and this means senior management allowing for and being tolerant of failure, where not all attempts at developing innovative new possibilities work out successfully.

• The more actively and far-reaching a business seeks to be as an innovator in its industry and sector, the more formal structure is probably going to be needed to make this work and consistently so – and the more important it is for them to actively pursue this.
• A certain amount of overall organizational scale in this is probably going to be needed in order for a business to even have an organizational structure such as a transition team in place. Though I add, participation in this type of endeavor can be part-time and only be called upon on an as needed basis and as first step processes identify innovative potential for them to help promote and further develop. And, of course, the people who would do all of this have to be supported in their being allowed time and other resources to work on this too, along with their more usual workplace responsibilities.
• Note that I did not start out with cost considerations here and that was for a reason. As an initial step, the important goal is usually a proof of principle validation that there is something that might be of value if developed in a practical implementation direction. If this is done carefully, costs can in general be minimized and even if their inclusion on a budget might be notable. That raises the question of what budget and what line in the business’ accounting this would be charged too. And selecting there can require financial gatekeeper support too.
• Then taking that next step beyond basic proof of principle, takes effort and funding too and even with a focused prototyping effort. This is where the transition committee of my earlier series: Keeping Innovation Fresh, actively enters this narrative.

What is the single biggest challenge that seems to arise and throughout all of this, and particularly for successful, profitable businesses?

• Taking off the blinders that success can put in place, and looking past the currently successful and profitable, and in new directions
• And when the current bottom line for that business, and when the demands of its markets, are not already asking for new and different,
• And when the due diligence security of tried-and-true and fiscally known and at least for-now safe, would seem to mitigate against pursuit of research and new product development, and innovative change.

Businesses that cannot and do not take this leap into the admittedly unknown, ever, might be secure in their current here-and-now for right now and in their immediate and shorter term future. But they also run the risk and certainly longer-term, of being blindsided by their competitors who do innovate and who do support the potential for innovation that their employees can offer.

And with this I divide risk and benefits according to timeframes considered, and as a direct consequence of considering the How of actually carrying out the above list’s Point 3.

I am going to add some more to that line of discussion in my next installment to this series, and will proceed from there to address Point 4:

• Information availability serves as an innovation driver,
• And business systems friction and the resistance to enabling and using available business intelligence that that creates, significantly set the boundaries that would distinguish between innovation per se and disruptively novel innovation as it would be perceived and understood.

Meanwhile, you can find this and related postings at Macroeconomics and Business and its Page 2 continuation. And see also Ubiquitous Computing and Communications – everywhere all the time and its Page 2 continuation.

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