The new language The new language of innovationof innovation

Facilitated by Jeff De CagnaFacilitated by Jeff De CagnaChief Strategist and Founder, Principled Innovation LLCChief Strategist and Founder, Principled Innovation LLC

IABC 2005 International Conference IABC 2005 International Conference June 27, 2005 June 27, 2005 Washington, DC USA Washington, DC USA

What kind of innovation What kind of innovation leader are you now? leader are you now?

What kind of innovation What kind of innovation leader will you become?leader will you become?

““Managers are not paid to make the inevitable Managers are not paid to make the inevitable happen.  In most organizations, the ordinary happen.  In most organizations, the ordinary routines of business chug along without routines of business chug along without much managerial oversight.  much managerial oversight. 

The job of managers, therefore, is to make the business do more than chug—to move it forward in innovative, surprising ways.”

—Heike Bruch and Sumantra GhoshalHeike Bruch and Sumantra Ghoshal “Beware the Busy Manager”“Beware the Busy Manager”

Harvard Business ReviewHarvard Business Review (2/02) (2/02)

Leaders

leaders

What are the major What are the major challenges organizations challenges organizations face in making innovation face in making innovation

happen consistently?happen consistently?

BCG Innovation Survey (12/04)BCG Innovation Survey (12/04)(500 senior executives in 47 countries and all major industries)(500 senior executives in 47 countries and all major industries)

• 73 percent73 percent of companies worldwide will increase spending on innovation in 2005, up from 64 percent in 2004.

• 67 percent67 percent of executives ranked innovation as one of their company's top three strategic priorities for 2005.

•

• On average, executives said that their companies plan to boost spending on innovation by 15 percent in 2005.

• More than 90 percent90 percent said that generating growth through innovation has become essential for success in their industry.

CognitiveCognitiveThe inability to escapeThe inability to escape

denial and nostalgiadenial and nostalgia

““Can’t see the future”Can’t see the future”

The four biggest obstaclesThe four biggest obstacles(Adapted from Gary Hamel)(Adapted from Gary Hamel)

StrategicStrategicThe inability to developThe inability to developnew strategic optionsnew strategic options

““Can’t overcome CW”Can’t overcome CW”

PoliticalPoliticalThe inability to move The inability to move resources away fromresources away from

what isn’t workingwhat isn’t working

““Can’t afford/risk it”Can’t afford/risk it”

IdeologicalIdeologicalThe inability to get The inability to get

beyond optimizationbeyond optimization

““Can’t question what we do”Can’t question what we do”

How can leaders How can leaders effectively connect the effectively connect the "value" and "values" of "value" and "values" of

innovation through innovation through language?language?

Language is only Language is only secondarily the means by secondarily the means by which we communicate. which we communicate.

It is primarily the means by It is primarily the means by which we think. which we think.

—Dee HockDee Hock Founder and CEO Emeritus of Founder and CEO Emeritus of

VISAVISA

Past performance is NO Past performance is NO guarantee of future successguarantee of future success

Of the original list of Fortune 500 Of the original list of Fortune 500 companies from July 1955, companies from July 1955, only 71only 71 are still on the list today, including are still on the list today, including only SEVENonly SEVEN of the original top 20. of the original top 20.

Leaders CANNOT afford to make assumptions Leaders CANNOT afford to make assumptions about whether their organizations will survive.about whether their organizations will survive.

““Risk aversion is eventually going to Risk aversion is eventually going to drive America into second-class status drive America into second-class status in our increasingly global economy. in our increasingly global economy. Guaranteed outcomes mean lowering Guaranteed outcomes mean lowering our expectations. And lowered our expectations. And lowered expectations lead to mediocrity and sub-expectations lead to mediocrity and sub-par performance.par performance.

We need to ask ourselves: what's going We need to ask ourselves: what's going on here?”on here?”

--Dr. William R. Brody, --Dr. William R. Brody, President President The Johns Hopkins The Johns Hopkins

University April 25, 2005University April 25, 2005

Vision is not enough, it Vision is not enough, it must be combined with must be combined with

venture. It is not enough to venture. It is not enough to stare up the steps, we must stare up the steps, we must

step up the stairs.step up the stairs. —Vaclav HavelVaclav Havel Former president of the Czech RepublicFormer president of the Czech Republic

Innovation is changingInnovation is changing

Innovation is changing IIInnovation is changing II““When I say that innovation is When I say that innovation is being democratized, I mean that being democratized, I mean that users of products and servicesusers of products and services—both firms and individual —both firms and individual consumers—are increasingly consumers—are increasingly able to innovate for themselves. able to innovate for themselves. User-centered innovation User-centered innovation processes offer great processes offer great advantages over the advantages over the manufacturer-centric manufacturer-centric innovation…systems that have innovation…systems that have been the mainstay of commerce been the mainstay of commerce for hundreds of years.”for hundreds of years.”

A different definition A different definition of innovationof innovation

Innovation lives in the careful Innovation lives in the careful balance of balance of systemic freedomsystemic freedom and and

systemic disciplinesystemic discipline necessary necessary for discovering and developing for discovering and developing

ideas to create new value.ideas to create new value.

Innovation Values CycleInnovation Values Cycle

ImaginatiImaginati

onon

InsightInsight

OpportunitOpportunityy

ImpactImpact

A new language of innovationA new language of innovationThe Old Language

• ClosedClosed• ProprietaryProprietary• Company-centeredCompany-centered• CompetitionCompetition• SerendipitousSerendipitous• Necessary expenseNecessary expense• Minimizing riskMinimizing risk• What we knowWhat we know• What’s achievableWhat’s achievable

The New Language

• Open/democraticOpen/democratic• Distributed/sharedDistributed/shared• User-centered/DIYUser-centered/DIY• Beyond competitionBeyond competition• SystemicSystemic• Critical investmentCritical investment• Leveraging riskLeveraging risk• What we can learnWhat we can learn• What’s possibleWhat’s possible

How can a new language of How can a new language of innovation assist leaders in innovation assist leaders in

identifying the organization's identifying the organization's most capable and talented most capable and talented contributors to the work?contributors to the work?

Generative communicationsGenerative communications• We don’t need more transactional We don’t need more transactional

exchanges between leaders and followers.exchanges between leaders and followers.• Time-starved people with fragmented Time-starved people with fragmented

attention need inspiration, rather than attention need inspiration, rather than simply calculation, to act on something as simply calculation, to act on something as important and as challenging as innovation.important and as challenging as innovation.

• We need authentic conversations focused We need authentic conversations focused on what is possible, drawn from a variety of on what is possible, drawn from a variety of individual and shared experiences.individual and shared experiences.

• The contributors your organization needs The contributors your organization needs will respond.will respond.

How can we be generative?How can we be generative?• We must be willing to live in the apparent We must be willing to live in the apparent

paradox of freedom and discipline that paradox of freedom and discipline that makes innovation possible.makes innovation possible.

• We must be willing to share our stories of We must be willing to share our stories of both success and failure and consider their both success and failure and consider their meanings not simply for the organization meanings not simply for the organization but for the people it serves.but for the people it serves.

• We must leverage “social media,” such as We must leverage “social media,” such as blogging and podcasting, to share these blogging and podcasting, to share these stories with greatest possible level of stories with greatest possible level of authenticity and reach.authenticity and reach.

What kind of innovation What kind of innovation leader are you now? leader are you now?

What kind of innovation What kind of innovation leader will you become?leader will you become?

Continuing the conversation…Continuing the conversation…

THANK YOU FOR BEING A PART OF THIS SESSION!THANK YOU FOR BEING A PART OF THIS SESSION!

Send me an e-mail at jeffpi1@gmail.comSend me an e-mail at jeffpi1@gmail.com

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