Hardwiring Innovation

Jens Martin Skibsted is Founding Partner, Skibsted Ideation, Denmark and attended the World Economic Forum Annual Meeting of the New Champions.

The financial crisis pushed efficiency on to the agenda of just about every corporation. But there has been a general consensus, that you can’t cut out innovation. You have to sustain growth even as you cut back on costs. This was re-confirmed at “Summer Davos” in Dalian in the midst of a double-dip scare.

Hellmut Schütte, Professor, CEIBS, formally moderated the session Hardwiring Innovation. In effect, Tim Brown, CEO of IDEO, did that job – to perfection. The session had a look at what structures drive innovation effectively within an organization.

Innovation has been an integral part of turning change to one’s advantage regardless of culture. Cai Jian, Executive Dean, Innovation Research Institute, Peking University explored how innovation takes it shape in a contemporary Chinese context and emphasized the need to revisit its constraining norms on failure.

Marc Koska, Founder of Safepoint, exemplified well how field research can facilitate delivery of innovation.

Ganesh Natarajan, CEO of Zensar Technologies promoted his intrapreurship methodology; inspired by GE’s intrapreneurship program of the 80’s. Intrapreneurship programs create a spin-offs and set up a business with own venture capital while retaining the option to acquire the company later.

I mentioned two other approaches: Google’s notorious “goofing off” approach. Google employees are allowed to spend 20 percent of their free time to pursue projects of their choice. And Apple’s: a “Master Goofer” micro-manages the entire company. Apple’s innovations put design first and are centered around picking the right value chain components, letting other companies pioneer the in-depth technological innovation. Apple didn’t invent the PC, the MP3 player or the smartphone. They tweaked what was valuable to people.

Innovation is a continuous effort that keeps on creating value. However, the convergence of three trends can prove challenging to drive innovation effectively in the near future:

1. Decoupling of innovation and entrepreneurship:

Whereas innovation historically is tied to entrepreneurs, it is now being tied to salaried employees, i.e. generally more risk averse type people.  

The new breed of innovation professionals can be placed in two categories: Innovation custodians and innovation lexicographers. The custodians are a type of middle manager, meant to oversee the innovators and their processes. The lexicographers are external consultants that will take corporate managers through endless innovation workshops or go on about the aforementioned processes.

2. Decoupling of innovation and production:

Innovation has become abstract and institutionalized. To a larger extent the guys driving innovation are not on the shop floor. The guys on the shop floor are managed by innovation managers and consultants from a far. Real time trial and error, Fingerspitzengefühl, and random experiments are becoming instinct in corporate culture. Innovators, historically speaking, dealt with whatever they were innovating. Today their expertise might be being innovative, rather than great at making something.

3. Increase in speed to market.

Time to market for most products has been reduced significantly over the last decades. This also leads less time for deep innovation and leads to me-too type incremental innovation.

Only the future will tell how we respond and if we will have to innovate innovation as such again.