The Innovation Ecosystem

For an organisation, generating innovation cannot be a mere flash in the pan. Each and every innovation has a lifetime during which it delivers its value, and subsequently, declines into oblivion. Therefore, organisations in competitive markets such as FMCG and Automobiles demand a continuous stream of innovation to generate a persistent stream of newer values for customers. However, innovating at a steady frequency remains wishful thinking for most organisations. And, it is something that most of them seek out, but hardly achieve in their lifespan. This is owing to the fact that a steady stream of innovation is possible only if the organisation has a culture of innovation which is impossible unless the organisation has an innovation Ecosystem.

 

 A non-accidental Ecosystem

 

Innovation Ecosystems are not accidental. They are conscious organisational creations which believe that not innovating is simply a prescription for suicide. In a world of technological transformations and paradigm shifts, and continual shifting of the parameters of competition, it becomes imperative for an organisation to outrun or out‑innovate its competition if it wants to grow. Without an Innovation Ecosystem, the possibility of the organisation out‑innovating its competition, is nothing more than a pipe dream. Let us look at the need for innovation Ecosystems from another angle which emerges after mapping the success and failure pattern of multiple organisations engaged in the target of innovating at a faster pace.

           

An FMCG company was facing the prospect of stagnating sales. Therefore, in search of innovation in Sales, it exposed its key sales personnel to a training programme on ”Innovation in Sales”. The sales personnel were competent and enthusiastic learners when it came to innovation competency and the innovation development process. The learners identified innovation hotspots in sales and applied the innovation tools to those innovation hotspots, thereby generating innovations in sales. The designs of sales innovations were potent and useful. The programme ended with all the participants in high spirits and imbued with new sales possibilities in the near future. And, on doing a reality check after six months, it was found that not a single innovation in Sales had been implemented!

           

Why did this FMCG organisation fail in its quest for innovation?

Why did this FMCG company fail to convert the innovation ideation into reality?

 

A large-scale manufacturing company was facing an increasingly turbulent business environment. The number of competitors had gone up from four to fifteen. There were technology changes and a paradigm shift in vogue in its business environment. Therefore, the organisation experienced a stronger urge to trigger innovation from within. The organisation chose ”Innovation in Operations” as the innovation sensitive area so as to have a cascading effect on the value chain of the organisation. Select personnel from operations were provided exposure to a competency development process focused on generating innovations in operations. Designs of innovations in operations were formulated and consolidated into a ”Compendium of innovations”. The Compendium of innovations were sent to those holding senior positions in the organisation. The innovation designs were appreciated. However, not a single design was developed as a prototype.

           

Why did this manufacturing organisation fail in its quest for innovation? The need for innovation was strong, the competency got developed, the designs of innovations were created. Still no resultant innovations.

What ails the innovation development process?

Is innovation going to remain elusive?

 

A large-scale power distribution company wanted to impart newer skills to its engineers and executives. Therefore, they chose innovation as one of a set of five skills to be developed. For skill development, an expert was requisitioned. The expert facilitated the perception expansion and the skill development of the personnel in the chosen skills. After skill development in innovation, the participants felt that they were on the brink of becoming innovators. However close they were to such a possibility, it could not be converted into reality.

 

What does it take to convert the innovation possibility into a reality?

What is the blind spot that is preventing organisations from innovating?

           

A technology consulting company felt the need for ”Innovation in HR”. Therefore, it exposed its key HR personnel to a specifically designed programme focused on developing the competency of its personnel in applying innovation tools to innovation hotspots in HR. Some of the innovation Hotspots chosen were,” Innovation in onboarding”,” Innovation in Engagement”, and, ”Innovation in Training”. The HR personnel learnt and applied the innovation competency and the innovation development process to the chosen innovation Hotspots. They created the designs of the requisite innovations. Innovation teams were created to convert the designs into prototypes. Three months down the line, the project, ”Innovation in HR” was shelved because the HR Head who was the brainchild behind the initiative, left the organisation.

           

What a colossal waste?

What is that significant shortcoming due to which such spectacular initiatives on Innovation die whimpering deaths?

Why does not the innovation momentum build up?

 

The significant shortcoming owing to which the innovation momentum did not build up in all the preceding cases is the absence of an ”Innovation Ecosystem”. This Ecosystem ensures that the ball is not dropped after a few steps and that it reaches the goal of a prototype. The innovation initiatives taken by organisations in the aforementioned cases are elements of the innovation Ecosystem. However, such elements do not constitute a complete Ecosystem. If we take the analogy of a car as a locomotion system; if all the elements are put into place barring the headlights, will the locomotion system succeed? No. Similarly, all the elements of the innovation ecosystem have to be put into place so that it generates a continual stream of innovations.

 

Elements of an Innovation Ecosystem

                                                                  

Nothing is perfect and everything can be improved. Every product or system is in a state of evolution. Thus, innovation is possible at every operational point in any department or company. However, innovation at certain core points in the value chain have a bigger impact on the value created, as compared to the other peripheral points. These core points in the value chain are called innovation Hotspots. E.g. Innovation Hotspots for a power generation company can be ”Flexible Generation” or ”Reduction in Fuel Cost” while innovation hotspots in an FMCG company can be ”Supermarket Sales” or ”Product visibility”.

 

“Innovation is possible at every operational point in any department or company. However, innovation at certain core points in the value chain have a bigger impact on the value created, as compared to other peripheral points. These core points in the value chain are called innovation Hotspots.”

           

Innovation Competency, the second element in the Innovation Ecosystem cannot be developed in everybody. It can be developed over the foundation of an instinct for innovation. Not everybody has an instinct for innovation. Many people are happy doing what they have been doing in the past, the present, as well as in the future. And, they see no point in wasting organisational resources for scaling the wall of resistance to innovation embedded in their subconscious.

           

The design and execution of the Innovation Development Process is crucial to the success of the innovation ecosystem. This process ensures that the sphere of innovation is not dropped midway. It enables the conversion of the innovation concept into a design, the design into a prototype, and, the prototype into an innovation.

             

The innovation Support Structures, the fourth elements in the Innovation Ecosystem, constitute the Innovation Management and Control system which holds all the elements of the Innovation Ecosystem together, thus enabling it to function as a system of interdependent processes.

           

The Innovation Index Number being the fifth element of the Innovation Ecosystem is crucial for integrating the feedback and learning loop into the Innovation Ecosystem, thereby enabling it to adapt and evolve. Organisations need to design and execute an Innovation Ecosystem with all the aforementioned elements in order to create a steady stream of innovations. With the innovation Ecosystem not in place, the innovation initiatives taken by organisations would be mere flashes in the pan interspersed with a colossal waste of organisational resources.

 

 “Organisations need to design and execute an Innovation Ecosystem with all the aforementioned elements in order to create a steady stream of innovations. Without the innovation Ecosystem in place, the innovation initiatives taken by organisations would be mere flashes in the pan interspersed with a colossal waste of organisational resources.”

Sanjiv Narang is an author and corporate trainer in the area of Innovation. He is the author of the book, “Innovation, why, what and how”. He has conducted innovation workshops and interventions for over 100 companies in public, private and government sectors. He is an AIMA Certified Trainer (ACT). He can be contacted on [email protected]

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