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TRANSCRIPT
Patric
k C
orsi
Erw
an N
eau
Innovatio
n C
apability
Matu
rity M
odel
This book explores innovation capability in industry by studying theprinciples of the maturity levels that apply when operationalizinginnovation. In four parts, the authors provide a methodological guide,with methods and tools to be applied to businesses and otherorganizations, both public and private.
Part 1 provides an introduction to the subject of innovation as a meansto progress. It focuses on the need for a method, provides a modernframework for innovation capability and introduces the idea of maturitylevels.
Part 2 discusses the maturity levels themselves – the five levels areanalyzed individually to provide a basis for the following section, whichdiscusses the implementation of methods.
Part 3 focuses on building innovation capacity by concentrating onconcrete examples of innovation within the industry. Each maturity levelis discussed within this context to define the factors that underpinsuccess.
Part 4 presents the five maturity levels as a collection of dynamic tools,but also looks beyond these by discussing inter-level dynamics andfactors which could impede or halt progress.
Patrick Corsi is an international consultant in innovation engineering atIKM, London, UK and Brussels, Belgium, and an Associate Practitionerin intensive innovation at the Centre de Gestion Scientifique at MinesParisTech in France. Previously, he had an extensive career with IBMCorp, IBM France, THOMSON-CSF, the European Commission as well asa successful start-up experience.
Erwan Neau is Director at AONOV Innovation in Angers, France. Hedeveloped systematic methods for diagnosing innovation processes inbusiness and guiding innovation approaches. He advises SMEs on theirbest capacity to progress their development.
Innovation CapabilityMaturity Model
Patrick Corsi Erwan Neau
www.iste.co.uk Z(7ib8e8-CBICHH(
CONTROL, SYSTEMSAND INDUSTRIAL ENGINEERING SERIES
W827-Corsi.qxp_Layout 1 10/04/2015 16:54 Page 1
Innovation Capability Maturity Model
Innovation Capability Maturity Model
Patrick Corsi Erwan Neau
First published 2015 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address:
ISTE Ltd John Wiley & Sons, Inc. 27-37 St George’s Road 111 River Street London SW19 4EU Hoboken, NJ 07030 UK USA
www.iste.co.uk www.wiley.com
© ISTE Ltd 2015 The rights of Patrick Corsi and Erwan Neau to be identified as the authors of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
Library of Congress Control Number: 2015937459 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library ISBN 978-1-84821-827-7
Contents
ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi
PREFACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xiii
LIST OF ACRONYMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii
PART 1. THINK UP A METHOD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CHAPTER 1. INNOVATION: AN UNFINISHED JOURNEY . . . . . . . . . . . . . . 3
1.1. The journey as the end . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 1.2. Application of maturity levels in the innovation process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 1.3. The effects of the knowledge society . . . . . . . . . . . . . . . . . . . . . 7 1.4. What the current socioeconomic context indicates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1.5. Who can benefit from this book and how? . . . . . . . . . . . . . . . . . 10 1.6. How to use this book? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
CHAPTER 2. EVALUATING THE ABILITY TO INNOVATE . . . . . . . . . . . . . . 13
2.1. The art of change is not one-size-fits-all . . . . . . . . . . . . . . . . . . . 13 2.1.1. Change is an awareness of a phenomenon’s time derivatives . . . . . . . . . . . . . . . . . . . . . . . . 14 2.1.2. Any system reflects the maturity of its subsystems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.2. A failed timing translates into zero progress . . . . . . . . . . . . . . . . 16 2.2.1. When the emergency is in conflict with the ability to innovate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 2.2.2. Moving up the time axis leads to influencing time . . . . . . . . . . 17
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CHAPTER 3. A METHOD TO PROGRESS . . . . . . . . . . . . . . . . . . . . . . . . 21
3.1. Progress in the ability to innovate requires a method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.1.1. Provide a starting point for the method . . . . . . . . . . . . . . . . . 25 3.2. A new basis for competitiveness contributing to a greater whole . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.2.1. The importance of selected vocabulary . . . . . . . . . . . . . . . . . 27 3.3. Two extremes revealing a relative immaturity . . . . . . . . . . . . . . . 28 3.4. Evolving the concept of innovation . . . . . . . . . . . . . . . . . . . . . . 30 3.5. Controlling the acceleration is now the issue . . . . . . . . . . . . . . . . 31 3.6. An algebra of the different levels of maturity (Innovation Capability Maturity Model) . . . . . . . . . . . . . . . . 33
3.6.1. The progression route starts anyway from the lowest point reached . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
PART 2. A DISCOURSE ON THE METHOD . . . . . . . . . . . . . . . . . . . . . . . 37
CHAPTER 4. TWO ESSENTIAL PRELIMINARY LEVELS 0 AND 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.1. Level 0 or “we are not concerned” . . . . . . . . . . . . . . . . . . . . . . 39 4.1.1. What is level 0? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 4.1.2. An example at level 0 . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 4.1.3. Examples of organizations at level 0 . . . . . . . . . . . . . . . . . . 40
4.2. The level 1 or “Do it Right First Time” . . . . . . . . . . . . . . . . . . . 41 4.3. Two examples where innovation at level 1 puts companies under death sentence . . . . . . . . . . . . . . . . . . . . . . . 46 4.4. A company that innovates only by reaction to competition or market trends (general study case) . . . . . . . . . . . . . . 49 4.5. SWOT matrix at level 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
CHAPTER 5. LEVEL 2: NOT YET MATURE . . . . . . . . . . . . . . . . . . . . . . 53
5.1. Level 2 or “redo and, if possible, do better” . . . . . . . . . . . . . . . . . 53 5.2. The SWOT matrix at level 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 58
CHAPTER 6. LEVEL 3: MATURITY IN TRAINING . . . . . . . . . . . . . . . . . . 61
6.1. Level 3 or “collective efficacy” . . . . . . . . . . . . . . . . . . . . . . . . 61 6.2. SWOT matrix at level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
CHAPTER 7. MASTERING LEVEL 4 . . . . . . . . . . . . . . . . . . . . . . . . . . 71
7.1. Level 4 or “collective efficiency” . . . . . . . . . . . . . . . . . . . . . . . 71 7.2. SWOT matrix at level 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
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CHAPTER 8. SUSTAINABLE MASTERY AT LEVEL 5 . . . . . . . . . . . . . . . . . 83
8.1. Level 5 or “dynamic, total and sustainable innovation” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 8.2. SWOT matrix at level 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
PART 3. IMPLEMENTING THE METHOD . . . . . . . . . . . . . . . . . . . . . . . . 93
CHAPTER 9. HOW TO INNOVATE AT LEVEL 1? . . . . . . . . . . . . . . . . . . . 95
9.1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 9.2. What is an innovation action at level 1? . . . . . . . . . . . . . . . . . . . 96 9.3. What will these actions permit? . . . . . . . . . . . . . . . . . . . . . . . . 97 9.4. The functional dimensions of innovation activities . . . . . . . . . . . . 97
CHAPTER 10. INNOVATING AND CAPITALIZING AT LEVEL 2: RE-VISITING THE PAST FOR ENTERING LEVEL 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
10.1. Assembling the elements of an approach . . . . . . . . . . . . . . . . . . 103 10.1.1. Prerequisites for level 3 . . . . . . . . . . . . . . . . . . . . . . . . . 104 10.1.2. Set apart what is urgent from what is important . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
10.2. Who is going to lead the innovation approach? . . . . . . . . . . . . . . 106 10.3. How can we reconcile the three business functions above? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 10.4. The innovability diagnostic phase . . . . . . . . . . . . . . . . . . . . . . 109
10.4.1. A true story . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 10.5. Questions and issues that resonate with level 2 . . . . . . . . . . . . . . 110 10.6. A level 3 checklist to create an innovation upon request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
CHAPTER 11. TO BUILD UPON LEVELS 1 AND 2 . . . . . . . . . . . . . . . . . . 113
11.1. Driving innovation is a strategic activity . . . . . . . . . . . . . . . . . . 113 11.2. Advice when nominating the Innovation Steering Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
11.2.1. More about breakthrough or disruptive innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
11.3. An example of repeated yet spiraling innovation . . . . . . . . . . . . . 126
CHAPTER 12. FORGING AND STRENGTHENING SYSTEMS TOWARD LEVEL 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
12.1. Preparing a culture change in the organization . . . . . . . . . . . . . . 129
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12.2. Starting the innovation throughout the company . . . . . . . . . . . . . 132 12.2.1. The first actions of the Steering Committee . . . . . . . . . . . . . 132 12.2.2. Launching a communication and a training policy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 12.2.3. Demystification – Awareness – Information – Education – Action . . . . . . . . . . . . . . . . . . . . . . . . 132
12.3. Constitution of the innovation team . . . . . . . . . . . . . . . . . . . . . 133 12.3.1. The management group of the innovation portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 12.3.2. An innovation information system . . . . . . . . . . . . . . . . . . . 134
12.4. The analysis group of customer needs . . . . . . . . . . . . . . . . . . . 134 12.4.1. Innovation communication . . . . . . . . . . . . . . . . . . . . . . . 135
12.5. Monitoring issues and management caution with level 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135 12.6. When knowledge management comes of age . . . . . . . . . . . . . . . 137 12.7. Is creating excess of knowledge an issue? . . . . . . . . . . . . . . . . . 138 12.8. The paradoxical passage way from level 3 to level 4 . . . . . . . . . . 139
CHAPTER 13. MANAGING THE DEPLOYMENT AT LEVEL 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
13.1. Changing the method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 13.2. The moment where management is revisited out of necessity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
13.2.1. The case of the smartphones market . . . . . . . . . . . . . . . . . . 145 13.3. Further notes on management . . . . . . . . . . . . . . . . . . . . . . . . 147 13.4. When ideas become projects and projects become successes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148
13.4.1. Firm is not a pyramid . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 13.4.2. “Headgear” the pyramid with the strategic vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 13.4.3. At the “heart” of the pyramid is an “anticoagulant” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
13.5. Preparing level 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150
CHAPTER 14. SUSTAINING LEVEL 5 . . . . . . . . . . . . . . . . . . . . . . . . . . 153
14.1. A frequent misconception on the nature of level 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 14.2. The two logics prevailing at maturity level 5 . . . . . . . . . . . . . . . 155 14.3. Level 5 is all about rhythm and osmosis . . . . . . . . . . . . . . . . . . 156 14.4. The new art of managing at level 5 . . . . . . . . . . . . . . . . . . . . . 157
14.4.1. First indicator: knowledge originality (KO) rapport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
Contents ix
14.4.2. Second indicator: hierarchical control (HC) rapport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 14.4.3. Third indicator: innovation funding (IF) reserve rapport . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 14.4.4. Fourth indicator: market surprise (MS) rapport . . . . . . . . . . . 162
14.5. The discipline of smoothing breakthroughs . . . . . . . . . . . . . . . . 163 14.5.1. On value as created and used . . . . . . . . . . . . . . . . . . . . . . 164 14.5.2. Diversity often leads to misleading divisional attitudes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 14.5.3. Innovation winning systems (“martingales”) – when the approach becomes an automated and complete process . . . . . . . . . . . . . . . . . . . . . . . 167
14.6. Why is level 5 “complex”? . . . . . . . . . . . . . . . . . . . . . . . . . . 171 14.7. A summary of all levels: the case of Apple through the years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174
PART 4. POSSESSING THE METHOD . . . . . . . . . . . . . . . . . . . . . . . . . . 177
CHAPTER 15. USING THE FIVE LEVELS TO PROGRESS . . . . . . . . . . . . . . 179
15.1. Implement a growth strategy first . . . . . . . . . . . . . . . . . . . . . . 179 15.2. Benefits and general challenges associated with the five maturity levels . . . . . . . . . . . . . . . . . . . . . . 180
15.2.1. The general benefits of the maturity level approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 15.2.2. General challenges related to the multilevel approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
15.3. The case of TMC Innovation scaled up through the five maturity level . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
CHAPTER 16. TOOL SHEETS FOR EACH LEVEL AND FOR INTER-LEVEL DYNAMICS . . . . . . . . . . . . . . . . . . . . . . . . . . 191
16.1. Summary sheets to assess the maturity of the innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
16.1.1. Synthesis of information from a given level . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
16.2. Create dynamics with inter-levels . . . . . . . . . . . . . . . . . . . . . . 194
CHAPTER 17. GOING BEYOND THE FIVE LEVELS: A NEW OPERATIONAL CAPACITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
17.1. Opportunities brought by the five levels . . . . . . . . . . . . . . . . . . 197
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17.2. The toxic impacts of innovation – a discourse on complexity in firms . . . . . . . . . . . . . . . . . . . . . . . . . 200
17.2.1. Inno-toxic factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 17.2.2. The most common innovation “diseases” . . . . . . . . . . . . . . . 202
17.3. In conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203
APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205
APPENDIX 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207
APPENDIX 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211
APPENDIX 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217
APPENDIX 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219
APPENDIX 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231
APPENDIX 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 247
APPENDIX 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253
APPENDIX 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267
BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 291
INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 299
Acknowledgments
This augmented version of a previous book was made possible due to much valued international cooperation.
Our former student Elodie Labonne at the “Institut des Sciences et Techniques de l’Ingénieur d’Angers” – ISTIA – in France embarked on a first translation while she was taking up her first job at IMCG in Göthenburg, Sweden. She was soon supported by senior staff at IMCG, in particular Anders Frisk who fulfilled the English translation and executive directors Jonas Norrman and Magnus Andersson who helped in overseeing the whole process.
Co-author Erwan Neau in Angers revised the figures while Patrick Corsi in Brussels revised the complete English version, while adding a substantial number of new sections reflecting the evolution of the innovation discipline in industry and the economy in general and also recent relevant research.
Finally, Mike Dulieu, an experienced marketing and innovation consultant in London, and a previous serial co-author with Patrick Corsi in high-tech marketing, proofread and amended the text to take account of the English usage.
To all these individuals, who embrace wide international cultures throughout their careers, the two authors send their warmest thanks, with deep gratitude for their confidence in the original work, and trust in the sometimes arduous, and often joyful process of bringing ideas to book. May the cooperation bring them the business rewards they all deserve.
Preface
The book that you are holding has its own story. It was born out of an original idea that surfaced in Spring 2004: that innovation is not a one-size-fits-all concept but instead should better be envisaged through maturity levels. It was not common then to see it that way. And it still is not.
Our professional experience always dealt with innovative domains and covered the spectrum from giant technological corporations to the tiniest start-up organizations, plus small and medium-sized enterprises (SMEs). We always strived to clarify the rapport between field experience and more theoretical arguments within innovation-intensive projects and problematics both in Silicon Valley and Western Europe.
From our very first meeting, as we were evolving our views, we opted for a simple approach: that five maturity levels would exactly suffice. About 50 meetings later, spanning the 7 years that followed and held randomly in Angers hotels and restaurants, neither the original master idea nor our schematization in five levels was found to need alteration by experience or further and deeper thinking. On the contrary, the clarity of the first comprehension remained faithful to the promise.
What we initially coined as “innovability” was a practical concept that appeared to be holding much of what the art of innovating is today. While the 2000s pushed the necessity to innovate, often with a sort of incantatory stance, it has set a different view: innovation as a core strategy. Peter Drucker, probably the master thinker of 20th Century management science,
xiv Innovation Capability Maturity Model
insisted on seeing marketing and innovation as the only two essential entrepreneurial functions. If innovation and marketing are the logics of the customer and the market, it is not enough to strive to adapt to needs and wants. We now know why: innovation is the driving arm for evolving organizations.
But, there is more! As Drucker liked to say, the organization should be a change leader, not only an innovator. Otherwise, it would not own an innovation mindset, would not nurture what this book denotes as the way of thinking. He also stressed that innovation requires a systematic process, although it may be unpredictable. And he was taking the example of the zip fastener that was first invented for grain sacks in harbors while textile industry customarily used buttons! The transistor, which Bell Labs’ William Shockley invented in 1947? Its miniaturization was first thought useful for the deaf! And so on, an endless list … To make new markets emerge, that is to say to innovate, it is usually necessary to go beyond those areas originators thought originally. The right sector, the right time, is a double equation that speaks of the prospect to innovate.
Then, there is the perpetual confusion of innovation with research and development (R&D), which we would wish to eradicate once for all. The “R&D” wording is still imbued with a 20th Century push-oriented vision. It is urgent to qualify the balance between:
– the support to R&D;
– the support to innovation.
While still quasi-exclusively emphasizing the support to R&D, the nations’ and firms’ economic scoreboards display a past vision. It is nowadays a public fact that the results obtained on markets are strongly decorrelated from the R&D investment level. Microsoft was still investing $9 billion in R&D in 2009 (“S. Ballmer Shareholder Letter”, 1 January 2009). However, the support to innovation remains comparatively much lower, be it in regional, national or community/international innovation programs.
Although innovation of course remains an approach, a process, and is still often even reduced to a set of results, it essentially reflects a way of thinking evolution. Time is up for varying the thinking methods according to
Preface xv
capacities and learned and available competencies with a view to change the thinking level. No domain and no sector are immune to this transformation in today’s world. Having clarified our ideas through this book, we remain ever more convinced that the leveled maturity approach will lead to real advances in innovation over the 2020s. Hence, the competitive capacities of organizations must evolve. As we strive in our quest for new inspiration sources in business, let us reckon that all is bound to evolving … including the way to evolve. In that resides the very capacity to innovate.
We hope that this book will help all innovation executives and others responsible for operating the fundamental changes that the coming times will require for organizations and companies, and with all possible success. The authors remain available in that spirit.
Patrick CORSI Brussels, Belgium
Erwan NEAU Angers, France
January 2014
List of Acronyms
BCG BCG (Boston Consulting Group) (Strategy)
BPR Business Process Engineering
CRM Customer Relationship Management
CW Competitive Watch
EPT European Patent Office (http://www.epo.org)
EI Economic Intelligence (Business Intelligence)
FA Functional Analysis
FAST FAST Diagram (Function Analysis System Technique)
FR Functional Requirements (Functional Analysis)
ICT Information and Communication Technologies
IP Intellectual Property
IKB Innovation Knowledge Base
ISC Innovation Steering Committee
KF Knowledge Fluency
KM Knowledge Management (management of knowledge and know-how)
KSF Key Success Factors
xviii Innovation Capability Maturity Model
LED Light-emitting Diode
NGO Non-Governmental Organization
NIH Not Invented Here
OCD Objective Costs Design
OBS Organization Breakdown Structure (functional structure)
OR Operations Research
PCT Patent Cooperation Treaty (www.wipo.org/pct/)
PERT Program of Evaluation and Review Technique
ROI Return on Investment
SADT Structure Analysis and Design Technique
SW Strategic Watch
SWOT Strengths, Weakness, Opportunities and Threats (Strategy)
TQM Total Quality Management
TRIZ Theory of Inventive Problem Solving
(Teoriya Resheniya Izobretatelskikh Zadatch – TRIZ, Russian acronym)
TW Technology Watch
VA Value Analysis
WIPO World Intellectual Property Organization (www.wipo.org)
PART 1
Think Up a Method
1
Innovation: An Unfinished Journey
1.1. The journey as the end
There are two things man could not stop throughout history: technology and innovation. And over time, man has also expressed a need to define innovation more accurately. In most cases, innovation was first considered as an economic concept. Under King of France Louis XIV, Maréchal Turgot developed the term with clear productivity connotation, which takes us back to the 17th Century. One of the greatest economists of the 20th Century, Joseph Alloïs Schumpeter, even wrote in his book Capitalism, Socialism and Democracy published in 1944, “Capital concentration tends to bureaucratize innovation and tends to dispossess the enterprise function from its deepest justification, which can question capitalism’s survival”.
However, toward the end of the past century, legendary management professor Peter Drucker deplored that innovation still remained for a lot of people a “flash of genius”, while it should rather be considered as “a systematic, organized and rigorous discipline” [DRU 02]. And we hold that the “genius inside” understanding still prevails.
Over the past few years, a surge of interest has been vested in widening the meaning of the word innovation: not just a term or a concept, but rather an entire field within a paradigm shift aiming at creating growth through a higher performance culture. However, to find the key to growth, it is necessary to look in the opposite direction and this is counterintuitive. The key to growth resides in the obsolescence of objects; because what is stable in an economy is neither the success of the day nor the established practice.
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Following this approach, many organizations and even countries have defined themselves as ecosystems that cultivate innovation where they previously considered creative performance and innovation separately. This involves culture, which long used to be a word foreign to innovation. To quote the INSEAD 2011 Global Innovation Index [DUT 11] “The passion to innovate must eventually originate from the heart, where we can turn our dreams into reality without losing the essence of its unique and emotional selling properties”. What a departure from past product-based concepts! Yet, the same report acknowledges that “No international index makes a serious attempt to measure culture or creativity across nations”.
Although an evolving definition of innovation is what we probably need and desire and is debated with increasing intensity, the usage of its generic term loses precision as time goes on. Any innovative organization would be one that wants to alter a status quo with respect to its markets. Its medium, method, size or geographic localization would be irrelevant and the sector in which it operates not a constraint.
Yet, there is more to innovation than innovation itself. While innovative activity was the previous limited focus, transformative power goes beyond and should be sought. This sets a distinction between result (from innovative activities) and process (a transformative agent). The result is the tangible outcome of some “innovative phase”, and to become an innovative result it is supposed to somehow reach a usage, a market. That process is the story behind the innovative phase, accounting for eventual success or failure stories.
However, there exists a third pillar that supports innovation. It is often a result of peculiar elements characterizing those organizations that are famous for innovating, including the culture they have forged, the attitudes of their personnel, even the managerial behaviors they have nurtured internally. That kind of postmodern sophistication cannot be taken for granted.
When a company’s innovation is perceived as continuous, we see the above three components of innovation – process, result and culture – as merging. While academics would maybe wish to standardize innovation, a complete reference terminology is not widely available apart from some attempts [SHO 12] and professionals generally refer to their business insight and experience when innovating.
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However, if innovation is said to correspond, as it should in our opinion, to a specific design process, the question that should be asked becomes “how to model such a design process?” In other words, how to account for a company that innovates and one that does not or does less. One problem is that the formulation of innovations may require new knowledge that has not been fully scoped. In other terms, innovation triggers a crisis of object identity, objects that may be of products or services, or of companies through their market positioning or their business model.
If information technologies are already operating like a business within a business, innovation models, methods, techniques and tools are already available. Perhaps, some organizations are already functioning in this way.
1.2. Application of maturity levels in the innovation process
Management science still tends to rest on an old paradigm that talks about closed worlds. Any new disciplines should breathe the thinking of openness, multiplicity to tools and no unnecessary opposition from them.
Our research during the 2000s found that an innovative situation is not a binary one, and there is no one-size-fits-all innovation process maturity level. Instead, several levels – we will call them innovation capability maturity levels – apply, and we actually identify five.
This book is focused on tracking the potential for innovating at each of these levels and accounts for the process specificities that signal a more or less capacity to innovate – something we will from now on dub “innovability”. By enabling an awareness of one’s innovability, it becomes easier to detect the pre- or postconditions for a given level and also to improve it. The first underpinning assumption is that the higher an innovability level is, the more you can grow competitiveness in markets – and in a sustainable manner. The second footing is that every level can be exploited maximally, which yields the best available build for further improving innovability. The improvement logic behind this is don’t do more, do better; don’t find more ways but a better one. These are the goals on climbing the innovability ramp with the best accelerating gradient.
For managing the innovation process, new responsible profiles appear revealing the centrality of innovation with corresponding job titles or positions such as Chief Innovation Officer, Director of Innovation,
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Innovation Pilot Committee or similar. Many possible roles in the company are actually legitimate and new processes, core to the enterprise, manifest the emergence of designing innovation, beyond process, result and culture.
The fact is that we depart from the old problem-solving paradigm of cognitive psychology, traditional creativity methods and other rationalized approaches. When you focus on the scenario method, you need to define the different scenario. Yet, a truly innovative approach gives you a blank sheet – an empty space. No problem-solving method can help as you start from a mathematically empty set. Of course, a vast knowledge exists that you may want to widely tap into. However, a terra incognita is that very new competitive frontier that companies need to grasp to become successful because they just do not have an a priori solution to hand. Simply solving problems would keep them to old views, definitions, patterns and habits. Many crafts and industries too, when a dominant design has reached success and the market responds by wanting more of same (i.e. consequently fixing the rules and closing further evolution), then fall into the non-innovating camp. They can be trains, jewelry, gourmet food, etc. Innovating calls for a change of viewpoint from what innovation has been so far.
In this book, we will consider five maturity levels, as depicted in Figures 1.1 and 1.2.
Figure 1.1. Principles of the four intrinsic maturity levels that apply when operationalizing innovation. The four levels start from “Do” and turn to “Repeat”, etc., in a counterclockwise manner. The fundamental question then is to install another maturity level that prevents them from starting all over again for each sought innovation, thus installing true sustainability in innovation
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Figure 1.2. Each maturity level is developing skills that are both unique and indispensable for further progress. Hence, a fifth maturity level should integrate them all if anything
1.3. The effects of the knowledge society
Innovating is the definite art of managing the couple:
knowledge → concepts
within our knowledge-based society, where information is abundant and knowledge the great differentiator. On the one account, as proclaimed at least since the beginning of this century, the knowledge-based society is slowly taking hold in all environments. On the another account, the dominating capital, even under immaterial embodiments, is still information in all its forms. However, as value is shifting toward knowledge, we shift the valuation to the capacity to innovate, to its measuring and progressing. It will be the work of innovation to offer new models, methods and tools to fertilize and spread this knowledge.
Innovation is nowadays a renewed competitiveness tool for companies, administrations and any organization. It is the contemporary, even fashionable and favorite way to create value. And that is comprehensible since innovation is no longer to offer something necessarily new to the market. It is fundamentally the ability to distort a status quo. Realizing this already supposes a change in the way of thinking.
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In so pursuing, innovation becomes a burning issue for regions and nations seeking sustainable growth and wealth. However, this notion pressurizes all the actors. Although innovation issues are more acute than they ever have been, the degree of innovation implementation or organizational innovation ability is rarely discussed. Is it not here that the difference between competitive businesses lies?
The models of innovation continue to evolve under the permanent building of experience. Yet, innovation remains hard to measure with objective metrics. This is what leads us to opt for a categorization of levels of maturity in innovating. These levels are initially defined structurally, although quantitative measures can be added later.
Certainly, we can still distinguish between incremental and radical or breakthrough innovation as is common practice. However, organizations need to learn how to manage innovation and regulate its intensity. This book provides guidelines for managing innovation dynamically, i.e. by considering the interactions between the subsystems of the organization.
1.4. What the current socioeconomic context indicates
The current socioeconomic context is marked by many uncertain factors:
– a very weak economic growth, even in the luxury goods industry where growth rates of 7–8% were certified in 2010 and where diversity enabled the handling of the crisis;
– money in crisis. Due to the financial crisis, even if other reasons are responsible for weaknesses, major world currencies suffer;
– a real yet indeterminate recovery. Despite its visibility, the status and level of the recovery is weak;
– with respect to emerging countries, every leading economy agreed to try to support their growth. Yet, the balance between “emerging countries” and “developed countries” has grown into a semantic difference;
– shares of companies are cheap in a fragile stock market;
– growth areas with major connotations: energy and eco-energy, environment, health and high technologies.
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This context urges investors to be careful and selective, but is this enough? This is unsure, as the time calls for more than bursts of reaction: a policy mix of disruptive innovative measures, not the exploitation of obsolete past patterns.
It is true that while we can agree in drawing up such an assessment, methods for survival at the least and eradicating the crisis entirely at most are uncertain. We can state that the Western economy, perhaps even its civilization, is at a crossroads, and that it is indispensable to acquire a sufficient understanding of methods from Asia, to not capitalize on material assets – which lose value anyway – but on growing legitimate know-how. What does this mean?
Clearly, we believe that the innovation saga is moving to a level of deeper awareness and that is why we believe in giving status to the several maturity levels in innovability1. Awareness of these levels is part of future progress, where innovation shifts from a value-addition argument to forcing competitiveness.
The disciplines of innovation, economics, forecasting and marketing are designed to approach each other closely in the coming years.
Understanding dynamic innovation is what will make the organization more competitive and more resistant to the inevitable socioeconomic storms and upheavals which will be met. Of course, many decisive factors such as technology remain. The challenge is to find new relevant and dynamic links between factors. Innovation models have evolved through four phases [CAS 02]:
– linear, by aligning “demand pull” and “technology push”;
– coupled, by taking into account the interactions between different elements conducive to innovation (technology, design, engineering, marketing, etc.), and the feedback between them;
– parallel, by integrating stakeholders around and within the organization, including upstream with suppliers and downstream with customers or by various alliances and relationships, possibly in open ways;
1 We will call innovability the ability to innovate.
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– integrated, through integrating systems and networks flexibly and continuously, which then grows into dynamic innovation.
When asking “how does a given country support innovation?” the answer is primarily quantified into political and economic indicators (e.g. loans, financing, advances, credits, patents, PhD, licenses, subsidies, start-up creations, etc.), but dynamic methods are lacking and corresponding tools are yet to be developed. Having operated in poor countries, we formulated Haiti’s theorem – there are as many potentials for innovation within Haiti as in Silicon Valley – but it is evident that the conditions of emergence, subsistence, growth and transfer make all the difference. With this knowledge, will we one day be able to compute the cost of non-innovation and hence become able to trigger the right working dynamics and the right metabolism for innovating?
It is clear to us that we need capability-based models for innovation and for measuring its productivity. Value creation is at stake and that cannot be reduced to counting innovative results.
1.5. Who can benefit from this book and how?
The fundamental tenet of this book is to enable both mental and structural innovations. The mental component is how-to-think in innovation business situations and the structural one is the organizational ways that support the first.
Therefore, the approach set in this book is of interest to a wide range of responsible cadres which include:
– the general direction and strategy, management and innovation teams, research and development directors, and marketing directors;
– managers in charge of the implementation of methods, techniques and tools for innovation in their business;
– local and regional communities, directors of public institutions such as hospitals and specialized agencies and more generally, public actors and local communities and social and political organizations;