Understanding the dynamics within your innovation system
11/03/2014 4 Comments
The work of David Teece is hugely influential on exploring dynamic capabilities. It was my reading of one of his early papers, published in 1997 (with Gary Pisano and Amy Shuen) that got me started down the dynamics path and my quest to identify the innovation landscape required by each organization to become innovation fit.
Teece’s concept of dynamic capabilities is a theory about the source of corporate agility: the capacity (1) to sense and shape opportunities and threats, (2) to seize opportunities by mobilizing your resources to capture new value from those opportunities, and (3) to maintain competitiveness through enhancing, combining, protecting, and, when necessary, reconfiguring the business enterprise’s intangible and tangible assets by transforming them for continuous renewal. This makes organizations potentially dynamic.
Recognizing and adapting to today’s and tomorrows challenges.
The challenge is how to position or reposition today’s resources for tomorrow.
I focus on the three horizon framework as this points an organization towards a ‘possible’ tomorrow and then they have to position their resources to ‘ready’ themselves.
Today organizations need to (radically) break free from copying and evaluating to markets in similar ways to their competitors. The difficulties to make this change in thinking is caught up in existing practice, organizations are often ‘wedded’ to best practice, want to stick with the learnt practices that have served them well in delivering particular outcomes in the past.
Best practices are ordinary practices, they dampen down the uniqueness and difficult to imitate ones that have the real dynamic potential to set the organization apart, give them a possible distinct advantage.
Shifting the “way we do things around here” is really hard
We need to think differently, we need to build into the culture of our organizations a more “evolutionary fitness,” so as market conditions change, the capabilities adjust and adapt accordingly. This comes back to David Teece’s “sensing, seizing and transforming” of the managerial activities to accomplish this.
Analysing changes taking place and linking these to then adapting the resources has not been as well ‘connected’ in organizations as they should. I have argued often if we don’t align innovation and strategy, how can we build our capabilities? We fail to make many internal connections and this is where knowing the dynamics within the system will significantly help.
Are we protecting our critical resources of building ongoing capabilities?
It often surprises me about the sheer amount of effort put into capturing and protecting intellectual property. Of course any IP needs protecting but it allows you a limited position, in time, in market opportunity yet often it sparks off a second round of innovation to circumnavigate this by your competitors.
Much of your success to hold your position or to take your IP further is totally dependent on building your capabilities (to innovate). You need to actively work at building your internal propriety aspect, your internal or ecosystem capabilities. To do this they must become dynamic, ever evolving and adapting to changing conditions.
You have to invest to understand how the underlying system works
Innovation is different, it challenges much of the existing routines and systems. To integrate innovation into your systems and structures you should firstly map what you have, recognize what you don’t and seek ways to bridge any gaps. But you have to know what you are trying to achieve strategically through innovation and most do not.
This requires a fair amount of work. To do this you need to map your existing capabilities for innovation, and then explore the evolving landscape you think ‘makes up your future landscape of opportunities and then integrate the understanding of the changes taking place with the capabilities you require. You need to bridge those gaps.
To do this you need to have a sound intellectual structure of your innovation system and this needs to be dynamic not locked up in outdated best practices, mimicking your competitors, these need to be unique and difficult to imitate, forward-looking and highly adaptive to the change going on all around you constantly.
Redesigning your routines for innovation is essential
Are yours locked in routines that focus exclusively on efficiency and being effective? If so, you will continue to struggle with finding innovation that sets you apart as the dynamics and their routines that are needed for innovation to succeed and be embedded are different and not built on ordinary capabilities or existing practices.
Your search is for emerging practices and capabilities that you require to add to achieve more radical innovation outcomes that go beyond the incremental achievements that can be copied very fast by others.
You need to build your reflexes and innovation muscle differently and that requires exploring an innovation fitness regime to map these out and bring innovation closer in its alignment to the strategic needs facing our organizations today.
Setting yourselves truly apart
To set your organization apart, to make it unique and ready to apply innovation in evolutionary ways, it needs to be more responsive to this constant change going on in markets and adapting to new customer needs.
An organization has to be constantly sensing and searching, and then ready to seize and transform and this requires a highly adaptive and dynamic responsive to constant change, though managing the capabilities to deliver on this the innovation required.
Knowing your innovation fitness dynamics is critical within this.