Four C's of Innovation
Over the past decade, I've been fortunate enough to be given a multitude of opportunities to challenge an organisation to become an innovative company. Not all have gone according to plan, but throughout the years my models have refined with increased success. Resulting in multiple ventures that exceeded the magic 100 million dollar value benchmark. Adding 100 million dollars to the financials of any organisation is enough to capture the attention of even the most conservative boards, particularly when it's done through an approach that was seen as challenging for the organisation. One might think I enjoy stretching an organisation's horizons, testing the thresholds of risk, lateral thinking and organizational purpose. But these come as a part of a larger journey that aims to assist the organisation in ensuring its prosperous future. I wish I had the opportunity to work with the now infamous victims of disruptive innovation; Kodak, and Borders. These companies had powerful assets; such as brand, distribution, and capital. But they let a shift in the market dilute those strengths to the point where they became liabilities. At which point, they are fitting an uphill battle juts the to survive.
When I sit down with clients, particularly my CXO and Board level clients, we look at innovation from a macro perspective. While I love helping individuals in the trenches, nothing compares to the power of working with larger instruments of scale than those of an executive management group or board. Which is where my framework of the four C's originated.
Organisations love engaging outside perspectives, often spending millions on c0nsultants and advisors. The role of the advisor is to act as a extension to the thinking of the organisation, and to help it see things through new lenses. But in order for that advice to stick, it must be coupled with a framework that instill score principles into the organisations thinking. The four C's is the collective wisdom of dozens of organisations, hundreds of consultants, and an ongoing desire to find a way to scale the thinking behind innovative organisations.
Let's take a look at the four C's; Context, Culture, Capability and Collaboration.
Context was the last of the pillars to evolve, but turned out to be the most important. It's easy to find an enthusiastic individual to drive innovation in an organisation. And that individual will likely gain moment in the remain C's. But without setting things up correctly from the start, it's near impossible to create new strategic options that ever scale beyond an experiment. You see most experiments fall over they second an organisation tries to integrate them back into 'business-as-usual', when the initiative faces the battle of fitting into incumbent standards, processes and procedures.
The Innovation Context aims to lay the foundations of success right from the start. Involves considerations for;
- Organisation Structure
- Financial Structure
- Physical Space and Location
- Identity and Values
- Performance Targets and Incentives
More than likely, an organisations existing structure, location and premises aren't ideal for encouraging the next pillar of culture. Hence decisions on context need careful consideration at the highest level.
With the foundation of context in place, an organisation need to work on creating a culture that will empower an innovation program to thrive. This involves potentially creating a 'safe place' where the culture is most risk tolerant, thus developing a sense of courage. Key elements of innovative culture include:
- Maker / Hacker
- Starting with Why
- Learning through failure
- Problem discovery
Each of the above are deep topics in themselves which I cover with more depth in my latest book, Innovation Wars. But one must accept that without embracing and enabling an innovation culture, they face an uphill battle when you finally start your innovative initiatives. It's also the quickest way to lose innovative talent. Once activated, innovative individuals will latch onto a problem they are passionate about solving. If they feel they can't solve that problem within your organisation, they are likely to go elsewhere. The best possible outcome is they solve it for a competitor, but what happens more often is they create their own ventures and disrupt your industry.
Once creative culture starts to flourish, ideas will start to get thrown on the table. This is where you need structured methods to identify and evaluate those that you invest in. Borrowing from the worlds of design thinking, lean startup and venture capital, an organisation can build a set of tools that guide individuals and initiatives through a framework that empowers individuals to become 'interpreneurs', catalysts of internal ventures that could become strategic options.
A key for an organisation is having a way to manage the initiatives in the pipeline. Right from initial ideation, through to large scale corporate spin outs, initiatives can be measured using a simple innovation accounting model. Even when an idea is pre-revenue, it still can take on its own value, allowing it to be compared against others in the pipeline. Soon logical trends and macro options become clear. Giving heads of strategy and boards food for thought on strategic direction.
Each of the capability tool sets is covered in detail in the book. But if you'd like me to cover a specific one here on the blog, added it to the comments at the bottom.
The quickest way to get into trouble is to invest resources (time and or money) in areas of weakness or adjacent industry. In the long term an organisation may consider developing new internal compentencies, but while and idea is in its infancy, the default should be to collaborate with organisations with aligned interests. When done well, the collaboration should create an extension of the value chain the organisation participates in. For this reason, it's easy to find simple value chain adjacency partners that help create a superior joint offering.
Types of collaboration include:
- Shared risk initiatives
- Adjacent capability value chains
- Best of breed offerings
- Think Tank - Open Innovation Partnerships
- Capital initiatives
Time and time again I see the same reasons organisations fall short of their original intention and/or goals in innovation. The only way to develop into an innovative company is to take a macro-strategy outlook along the lines of the four C's. Thus creating the foundations for success, and the frameworks for building an abundant strategic options pipeline.
In a simple blog post I can't do justice to each of the four C's. To continue your innovation journey, order yourself a copy of my new book; Innovation Wars.