From experience, when working with business leaders and their managers alike, design and design thinking are among the more difficult concepts to convey. Way too often, innovations and organizational change are conceived and discussed from a business (that is, economical, financial) perspective only. Moreover, business tends to be risk-averse, and reliance on predictable approaches based on past experience doesn’t help in designing break-through innovations. Following a recent keynote on The future of Innovation, several conference participants expressed their distress about the breath of the innovation-spectrum, and the complexity of organizational change today. As if it had been sufficient to think of a new product design or service delivery in the past, from a technology or process point of view only, ignoring resource and social constraints…

Design thinking may not have a formal definition that is agreed upon by all. It remains a relatively ambiguous/undefined concept. To us, design thinking is all about being able to project ourselves into the future, whilst accounting for all the dimensions (and therefore constraints) of innovation. This obviously includes the technology and processes, but also the economics/financials, the organizational aspects, the cultural and people issues, the social and societal consequences, etc. To a large degree, Leavitt’s Diamond (balancing process, technology, organization and people dimensions) encompasses these different aspects.

As for the capability to project ourselves into the future, this aspect was discussed by Roger Martin (author of The Design of Business) in his talk. He sees design thinking as resulting from a different logic, not analytical or inductive, but abductive. Abductive reasoning involves the capability to infer past conditions from a future state (e.g., “The grass is wet, therefore, it may have rained” – see Wikipedia’s entry on Logical reasoning), or as Roger puts it, “integrating the future with the past”, rather than deducing the future from the past.

Unfortunately, even companies that master design thinking and gain competitive advantage from this capability, risk losing this as they grow. Larger organizations tend to lose their agility and aim for more predictability, reliability, stability…

It’s not possible to summarize all the presentations here, but it seems obvious that “everything is in everything” – if we wish to achieve breakthrough innovation, then we have to adopt a holistic view and integrate the business, product, service, and people perspectives. And what we see way too often, is that new developments are approached from a single point of view only. And most often that point of view is product or service… Or technology, which is an even more restrictive viewpoint. Moreover, a lesson to be learned from Tony Hsie and Dan Pink is that the internal perspective is not to be underestimated. Innovation is not only about bringing a better product or service to a (new) market, it is also about institutionalizing the change internally, motivating the employees through a culture of autonomy (and happiness) in the workplace!

Dan Pink’s path to Motivation goes through Autonomy, Mastery, and Purpose. Similarly, Tony Hsie sees Happiness on a path to Profits, Passion, and Purpose. But organizations embodying those concepts don’t grow accidentally, they happen by… design!

For those interested, the presentation material can be downloaded from slideshare

First, A.G. Lafley did speak from experience, leading P&G for a decade: When A.G. Lafley arrived at P&G, he thought innovation was defined too narrowly, with too much focus on product. He says that innovation has to be broadened towards processes, business models, organizational structures, etc. Today, that seems obvious, but when he arrived at P&G more than a decade ago, it was probably revolutionary. And he says innovation ultimately has to serve the client: an invention that never makes it to the client, commercially speaking, is not an innovation.

Furthermore, when he was heading P&G, innovation itself was innovated — better qualification of the innovation portfolio, moving to open innovation using P&G’s connect and develop model, using advanced technology to simulate/test in a secure environment rather than the real world, etc.

In terms of qualification, he explained how P&G was increasing the success rate through weeding & feeding. Although one cannot increase the success rate above a certain threshold, because then it means not enough risk is being taken.

On Open innovation, he suggested the 1st step is to get your customer involved in a co-creation exercise. It’s an experiment: there are lessons to be learned, thus starting an improvement cycle, both for the product being co-created and for the innovation process itself.

Interestingly, P&G is successful in a competitive market, fighting for existing client demand, innovating incrementally with new products, but mostly competing on cost. Faring well in a red ocean?

Then, Renée Mauborgne, co-author of Blue Ocean Strategy, started with a question: Is management using its wrong brain? One is engaging either in the left hand side of productivity or the right hand side of creativity. The higher up one moves in an organization, the more one should be able to focus on creativity, innovation, strategy, … envisioning the future! Unfortunately, most managers and higher level executives spend their time on the left hand side. They use their wrong brain!

In leadership, when using the wrong brain — the classical, linear approach — one is doomed to fail. A more creative approach is needed. Creativity and vision can take a company out of the traditional model, into a blue ocean. It’s not about improving productivity; it’s about doing radically new things which cannot easily be copied.

Renée Mauborgne thinks her approach can also be leveraged at the macro-economic level. How will we close the gap between the aspirations of people in the developing countries and the linear extendibility of our resources? If China and India were consuming as North America or Europe, they alone would use more than the whole world’s energy, water, and other resources, but they would also pollute more than the rest of the world, etc. So there is no way that we can extend the classical economic model to provide for countries such as China or India, let alone the rest of the developing world. There are serious discontinuities between the western and the developing world, which can only be solved with creative solutions.

Finally, Vijay Govindarajan asked what strategy is all about? Are we managing the present, or forgetting the past/creating your future? And if so,

• How good are we at managing the present?
• How good are we ate forgetting the past?
• How good are we ate creating our future?

One could say that managing the present is useful in existing markets, but it may turn out dramatic in emerging markets. That is because emerging markets represent a fundamental customer discontinuity, where traditional business models will not work.

An example is the case of Ford vs. TATA in India: Ford tried to sell a downgraded US$ 20 000 car to the Indian market, which didn’t work because Ford was selling to the rich and they wanted something more luxurious. TATA on the other hand created a US$ 2 000 car, selling to the non-consumers, and this strategy is proving hugely successful.

So in moving into new markets, especially the developing countries, companies must take discontinuities seriously (be they customer, market, or technology).

Certainly, the secret sauce of innovation is somewhere in the association of ideas between these three stories. Companies must push creativity, including in their own, internal (innovation) processes. Additionally, to escape red oceans, the must generate new, demand driven markets where there are no competitors. Finally, they should not focus on their existing customers, but on their non-customers (including customer erosion). All this should be done with a cultural awareness that is often lacking in western organizations. Misreading the local market conditions may be a very costly experiment, however advanced our product or service!

So, there is no unifying approach or theory to innovation. There are many, many interesting and complementary approaches, which we need to combine and blend into something that works for the situation at hand!

This is a follow-up to the event that was organized in June in New York already. The intent is to pursue the discussion, develop the community, and think creatively around the topic “Innovating Innovation”.

What is important about this event, is that it brings a community together that has gotten to know each other through social media initially. As an innovation community of practice, we feel that there is an opportunity to share knowledge and experience, to explore models for collaboration, etc.

To participate, sign in with your Twitter account on KMers.org, or alternatively on tweetchat.com

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As it is an unconference, there is no official schedule, only facilitation. In the morning, a number of innovation practitioners will have short presentations, or alternatively they will be submitting challenges to their peers.  In the afternoon, small teams will work out different subjects to be presented back in plenary session.

What is important about this event, is that it brings a community together that has gotten to know each other through social media initially.  As an innovation community of practice, we feel that there is an opportunity to share knowledge and experience, to explore models for collaboration, etc.

@cdn

The event starts with Friday lunch, which is scheduled at 12:30 at the rather typical Resto Henri, a 15 minute walk from the lab. We should be in the lab at about 2PM, when our afternoon programme starts. As it is an unconference, there is no official schedule, only facilitation. The synergy between the lab and the participants should do the magic!

Crowdsourcing is a distributed problem-solving approach, whereby Seekers (organizations or individuals) broadcast Challenges (problems) to a large/unknown group of Solvers (the crowd). Depending on the approach, the solvers may belong to a community, and they may be involved in the selection process, but not necessarily so. In the end, the seekers will select the best/winning sulution(s), whereby the Solvers may be rewarded for their contribution.

Over the last decade, Crowdsourcing has proven very successful for technical challenges, such as in the pharma or chemical industry, where well-regulated crowdsourcing software platforms exist. InnoCentive is one of the early (and successful) examples. More recently, crowdsourcing has moved into the design space, with companies such as 99designs connecting Seekers with design needs to a community of graphic designers. Designers from all over the world compete for design projects listed on the site, resulting in significant cost reduction for the Seekers.

Inevitably, Crowdsourcing is coming to the engineering community. Recently, an open-source engineering community designed and built an actual vehicle, taking advantage of hundreds of talented designers and engineers to develop the car!

Fast Track will lead a work session on the implications of Crowdsourcing for engineering, where all aspects of this new phenomenon will be discussed, including technology, process (the innovation life-cycle), legal (agreements, trust, protecting IP rights), competency (matching solvers with seekers), organizational (roles & responsibilities of partners, intermediaries and platform operators), and financial (fair reward mechanisms between solvers & seekers).

For more information on this event, check out www.cofes.com

“Best practices,” by definition, are continually evolving — sometimes in reaction to a catastrophic failure, sometimes through innovation and continuous improvement. At past COFES meetings, we’ve discussed design, engineering, sustainability, and innovation. We’ve all asked, “What ‘best practices’ should we adopt?” By and large the response has been to repeat the past, only better, faster, and cheaper. At COFES 2010, we’re asking “What can we do to make ourselves and our customers more effective innovators?” and “How can we innovate in the development of better practices?”

For more information on this event, check out www.cofes.com