On the Frontlines of Change

Tuula Antola, Alexander Manu, Kelly Seagram

It's probable that any Nokia handset users born after 1975 are unaware that the same manufacturer that produced their cell phone also once made tissue paper, cabling and rubber boots. At this year's Helsingen Sanomat, Nokia's CEO described the company's current shift from product manufacturing to a new focus on service and software as a transformation similar in scale to the change undertaken when they cut all other products and focused solely on cell phones. Nokia's second re-invention begs the question – fifteen years from now, will Nokia's younger customers know them as a provider of cell-phone services and applications? Will cell phones themselves be obsolete? To what question will Nokia be the one and only answer?

In tactical innovation, the difference between one product or service and another is a matter of degrees – beating out competitors in speed-to-market, for example, can give a company a (temporary) lead in a new product category. The 'me-too' footrace that follows innovative product releases, such as the one we are currently observing with the release of Apple's iPhone, is a tactical effort to compensate for a shortage of strategic vision.  No company, howsoever fast, can ride a bandwagon into the history books.
Innovation today is in a crisis of purpose. Incremental improvements to existing products and small steps taken to protect and defend one slice of an ever-more crowded market – these endeavors are attempts to mitigate problems that threaten a business. The problem-mitigation model of innovation is reinforced by cultural mechanisms, such as arcane intellectual property laws that grant protection of a “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” – which encourage precedent-based, incremental innovation. Another culprit in the encouragement of innovation as problem-mitigating is the very framework itself by which innovation is traditionally approached. While innovation methodologies abound, the traditional motivation for innovation is rooted in - and stems from - competitive pressures. Innovation for competitive advantage encourages an Innovation Problem Framework, leading to a stunted innovation process in which the limits of what can be achieved are already defined at the outset of the innovation process. A defensive, problem-oriented approach to innovation as a response to competitive pressure is no longer sufficient or desirable. What follows is a description of our vision for a Pre-Competitive Innovation Framework, an approach to innovation that aligns latent human behavior with current technological possibilities to achieve new business platforms with unprecedented value to reflect their true benefit and meaning in people’s lives.

What is an “Innovation?”
The popular concept of what constitutes an “innovation” usually encompasses technological breakthroughs and new products. This definition is limiting and inhibits the imagination, for in truth the scope of possibility for innovation can extend well beyond our established notions of the term itself. It falls to our capabilities as innovative individuals to define and re-define the term through our organized explorations of what could be possible in any chosen domain. The latent innovation potential that lies in every individual can be - and must be – mobilized and leveraged to produce new pre-competitive value for corporations, which in turn can influence quality of life for humanity. Bringing forth the latent innovator in individuals towards this goal requires not just effective management, but leadership qualities as well. The empathetic character, courage, and playful qualities of a leader must accompany the systematic and diligent attention to process and systems inherent in effective management.

New Rules, New Tools
Most tools and methods that are currently used to manage innovation are holdovers from the industrial-era economy, an economy in which efficiently satisfying an identified consumer need was an accurate predictor of sustainable success. The industrial economy’s primary values of efficiency and reliability are well-served by the “funnel” innovation process model, by which the scope of possibility begins as broad and is gradually narrowed to zero-in on an outcome with the highest likelihood of success, due to added value, in an established market. But in a post-industrial, globally competitive economy, innovation is no longer about serving markets, but about making markets. It’s no longer about adding value, but creating value. As the rules of the global economy evolve, so too must our notion of what it means to be innovative in this changing context. Strategic innovation management methods reverse the tactical innovation funnel, enabling multiple revenue platforms, increasing potential outcomes and broadening the scope of future possibilities.

Measuring Innovation: The Funnel
Most innovation processes winnow and filter out high-potential ideas as a matter of course. These processes have an affinity for proven results and incremental gains. However, the most high-impact, category-defining innovations do not make it through the filter of a traditional innovation process. Would Google, eBay, YouTube, the iPod or iTunes have made it through the filter below? We contend that they would not. While measurement and feedback are necessary for effective implementation and validation, placing these filters too early in an innovation process will keep the full potential of a big idea from being realized. Furthermore, if it is high-impact, pre-competitive ideas we seek to gain from our innovation processes, then it is crucial to employ evaluating tools that will help us identify the type of idea we seek. Valuing an idea by the urgency of the problem it solves (for example) will produce a skewed and inaccurate picture of the true value of the business platforms mentioned above, that in no way reflects their success and true benefit to people.
 
Problems vs. Questions
It is necessary to draw a distinction between an Innovation Problem framework and an Innovation Question framework. The Pre-Competitive Innovation process begins with questions rather than problems. We believe any innovation process that begins with identifying problems to solve effectively limits its own scope of innovation and possibility at the outset. Why? Problem-based processes are reactionary and based on responding to a challenge or disruption in the business environment. Although it seems that following a step-by-step innovation process may advance a business’s position, the impression of advancement is illusory, because once the process is completed and the “innovation” is achieved, the business’s position is still market-responsive, based in competition, and subject to the next disruption in its environment. A business that spends all its time responding to problems and protecting its position cannot advance beyond the treadmill-like cycle of problem resolution.
A question-based innovation framework, on the other hand, has no loyalty to the status quo. This approach embraces a perceived disruption as an opportunity to explore new possibilities. A business operating in the question framework asks, “What new benefits and behaviours could be released by, through, and because of this signal? What organizational capability is required to deliver such benefits and enable such behaviours?” The responses to these questions move an organization forward into a pre-competitive space. Thus, a Pre-Competitive innovation process merges the exploratory nature of a question-based innovation process with the traditional problem-oriented, responsive process.

Where does Foresight come from?
Instead of relying on the reported needs of an established market, innovation at the strategic, pre-competitive level draws insight and direction from detecting signals in the environment. Applying imagination and intuition to an incisive reading of the current forces that influence your business (and even those forces that seemingly do not) is a capability of the strategic-level innovator. Beyond the ability to detect and interpret signals, a strategic innovator has an appetite for risk and the courage to set a precedent where none exists, translating insight into foresight into action.

Shaping the Future
Approaching new information as signals to future possibilities, formulating deep questions that motivate exploration and suit an organization’s goals, and fostering courageous, empathetic and diligent leadership are all necessary aspects of a Pre-Competitive approach to innovation. To achieve this it is first necessary to recognize and separate ourselves from the problem-mitigation approach to innovation, and to understand that breakthrough innovations cannot be substantiated by reference to past precedents. As the philosopher David Hume wisely wrote, The supposition that the future resembles the past, is not founded on arguments of any kind, but is derived entirely from habit. The old habits and concepts that we bring to our notion of what innovation is, and can be, must be put aside if we are to move boldly forward in our explorations of what could be possible both for our businesses and for ourselves.

Pre-Competitive Innovation is the capability of redefining and reformatting products, services and systems that realign people’s needs and wants with the potential of new technology and the capabilities of organizations.   It is not about the technology, but about having the courage to design new structures and organizational patterns that address the possibilities that accompany new technologies and new knowledge.
The most important opportunity for innovation does not reside in finding answers to the problems of the moment, but instead in pursuing and framing the questions of our time.