Enabling Continual Innovation and Change

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This is Article 1 of 4 about enabling innovation and change. It is designed for those responsible for innovation and change or those wanting more from existing programs and who are prepared to look for that potential in more subtle, complex, and often hidden ways.

This series of articles are based on 70 years of research and application plus a recent research project.

The authors are Andy Wilkins, Visiting Fellow at Cass Business School, Partner at Perspectiv, Non- Executive Chair, Ladder to the Moon and an Associate of the Creative Problem Solving Group, USA and Cass Business School Masters in Innovation, Creativity and Leadership Alumni Anne Maria Krebs.

In this article we use the term “continual innovation” rather than “continuous improvement” very explicitly and deliberately. Continuous improvement means that organisations are in a constant state of improving.  The research highlights two flaws in this language which in turn leads to unnecessary, unintended, unwanted, and unhelpful consequences to those looking to change performance which after all is the whole purpose.

Research highlights that the word continual is a more accurate word because literally continuous means uninterrupted and change approaches are always based on punctuated equilibrium. So continual - repeated but with breaks in between – is a more accurate description.

Likewise, improvement focuses only on half the change spectrum. As HR Magazine noted about innovation and change in December 2018: ‘At one end stands revolutionary explorations or inventions, and at the other end evolutionary developments and adaptions. All of it is creative and innovative and neither is better than the other’.

The full articles can be found here and are worth reading https://hrmagazine.co.uk/article-details/hr-magazine-tries-testing-personal-creativity and  https://hrmagazine.co.uk/article-details/hrs-role-in-organisational-creativity-and-innovation

If the aim is to change performance, surely, we want to value and include the whole spectrum – what Jeffrey Hyman (founder of Pret a Manger and Director of Innovations at RHM) once referred to as “valuing a balanced diet”

Article 1: Innovation and knowledge are linked, and knowledge can be explicit or tacit. Tacit knowledge is a great source of innovation. Enabling tacit knowledge to be shared requires great skill in creating a favourable environment or more specifically a ‘climate’ which encourages much richer conversations, and therefore more potential for innovation.

Article 2:  looks deeper into building a favourable climate.

Article 3: looks at what is required for better conversations.

Article 4: looks at how to pull all of this together for continual innovation and change.

Enabling continual innovation and change everywhere – release collective brilliance

Historically capital, raw materials and labour have been considered more valuable than creating and applying knowledge, however this has changed. The “knowledge revolution” means that today very little work is still based on static routines alone. The world and the environments in which we work are constantly changing, with this comes a pressure for everyone to be innovative and for leadership to be able to release the collective genius of their organisation and ecosystem.

In too many organisations the work of innovation is delegated to a department, or a type of employee – what some label as the “creatives” – or worst of all to senior management!!! Yet, in the relatively few organisations we have encountered who are ready, willing and able of keeping pace with the relentless change, innovative problem solving is deeply and widely distributed.

For example, Amazon is unleashing new products and services constantly. There’s Amazon Prime, Amazon Fresh, Amazon Web Services, Amazon Smile, Mayday, Amazon Prime Instant Video, Amazon TV, Amazon Business, and what do they have in mind for the patent of a “flying warehouse” that has been filed? This is from Amazon’s Chairman, Jeff Bezos’ 2013 letter to shareholders:

We have the good fortune of a large, inventive team and a patient, pioneering, customer-obsessed culture – great innovations, large and small, are happening every day on behalf of customers, and at all levels throughout the company. This decentralized distribution of invention throughout the company – not limited to the company’s senior leaders – is the only way to get robust, high-throughput innovation. What we’re doing is challenging and fun – we get to work in the future.”

The full document can be found here and is worth reading: https://www.sec.gov/Archives/edgar/data/1018724/000119312514137753/d702518dex991.htm

So, what we learned is that you need to educate, promote and accept innovation to be part of the social capital of the whole organisation - innovation can happen anywhere and needs to be enabled to happen everywhere.

Connecting knowledge and innovation

Innovation needs knowledge – often new knowledge – some call knowledge data, or information, or insights. Whichever word you use, the knowledge can be tacit or explicit.

Tacit knowledge has been called personal knowledge and is embedded in what we do, believe in or feel.  It is strongly connected to opinions, intuition and perceptions as well as our experiences, our imagination and the environment we are in. Tacit knowledge is difficult to write down, visualize or transfer from one person to another. It is embodied in the person.

Some examples of tacit knowledge include:
1. learning a language which requires immersion - using the language for long periods of time
2. complex social skills such as leadership, innovation and collaboration are difficult to learn - training cannot guarantee effectiveness in these domains because effectiveness develops from experience
3. snowboarding and other tasks that require physical coordination such as cycling, and skiing are considered tacit knowledge     

The mathematician Dr. Ruth Noller who worked with Albert Einstein and who worked at the Centre for Creative Studies in the USA came up with a helpful equation that connects creativity and knowledge.  The equation is C = fa (K, I, E) and suggests the relationship between knowledge (K), imagination (I), evaluation (E), and “attitude (a)”.

This equation provides a useful framework for how to increase the level of creativity and therefore innovation because, as some scholars and the December 2018 HR Magazine article noted, innovation, creativity, problem-solving and change management are the “same thing, just different words”. They are all “gap-closers” between where we are now and where we want to go; so, to talk about one is to talk about them all.

So, innovation is linked to knowledge, but tacit knowledge is not programmable – not storable in a database – and not in Google! Or put another way, it is hidden and has to be found, surfaced, discovered, unearthed, dug up in a particular moment in a particular context.

In the paper “The role of tacit and explicit knowledge in the workplace” Elizabeth A. Smith suggests that as much as 90% of knowledge in any organisation is tacit - embedded and synthesised in peoples’ heads and therefore most tacit knowledge is an invisible line item in corporate budgets.

Tacit knowledge is a highly underutilised asset when looking for marginal gains. Knowledge lays the foundation for innovation.

Uncovering hidden knowledge and hidden innovation potential

Knowledge leads to needs, leads to ideas, leads to solutions, leads to new value. But what does one do, when as much as 90% of the knowledge is hidden from us and it is of course this hidden knowledge that contains the new value, gems and insights required to fire up innovation?

Indeed some “continuous improvement” programs completely omit this area of the 8th waste of “Non-Utilised Talent”. The 8th waste is also described as the waste of unused human talent and imagination.

The full article can be found here:  https://theleanway.net/The-8-Wastes-of-Lean

Many organisations never release or utilise their full innovation potential and miss the turn off to the future. The ‘poster child’ for missing the turn off to the future because they were too focused on the present is Blockbuster who turned down the offer to buy Netflix several times. Management of the present is very different to imagining the future.

Having never worked for Blockbuster we cannot say exactly why they missed the turn off, but we do know that research suggest that a key factor for innovation, amongst many, is the capability of a company to foster an environment where it is encouraged for people to talk about the “unknown future”. A handy quick calculator which we use with teams to help them think more about competing for the future and ensuring they don't miss the turn off is to ask:

Q1. What % of your time do you spend looking outward as opposed to looking inward?

Q2. When looking outward, what % of the time do you look at the future as opposed to today?

Q3. When looking outward and into the future, what % of the time do you spend developing a collective, shared team view as opposed to singular view of the future?

Total time devoted to building a corporate perspective on the future or put another way creating a shared, team view of the future = Q1 x Q2 x Q3

These questions are based on Gary Hamel and C.K. Prahalad’s works on Competing for the Future. Also, in a recent article in Forbes, they finish with this great line "And it could happen to you. Invert your strategic planning time. Spend 80% on trends and scenario planning, and 20% on historical analysis. It might save your business"

The full article can be found here: http://adamhartung.com/innovation-why-bezos-succeeded-while-lampert-failed-at-sears/

With the current score calculated, then think about and talk about what you think the figure might need to be for you, your team or your organisation to reach your full potential?

Companies and/or teams who truly understand this dilemma to keep setting the foundations for the future also understand they have to constantly work on sharing information. Some examples of this on-going endeavour include parts of 7Eleven, Google, Halcrow, National Grid, Pixar, Platinum Guild, and RHM.

By contrast for example, has John Lewis spent enough time thinking about the future or too much time protecting what John Lewis set up 150 years ago?

The route to innovation – create favourable conditions for organised surprises

To reach a stage where an individual, team or organisation is ready to diffuse an innovation such as a new mindset, attitude, feeling, product, service, processes or idea - knowledge has to be shared with the intended audience. 

However, when releasing new knowledge, there are two key issues that need considering:

1. Much of what is really useful information that might come to the surface is what is sometimes referred to as undiscussable. Indeed, it is sometimes undiscussable to discuss the undiscussables and the undiscussability of the undiscussables! Another term often used today is the  ‘the hidden elephant in the room’. This hidden knowledge is both extremely valuable but also very difficult to surface and then use. 

2. The truth is that it just takes time to authentically, deeply and truly understand some information. There is a great quote from Edward I. Koch that illustrates this: I can explain it to you, but I can't comprehend (understand) it for you. Often, potentially useful but volatile information is lost due to the pressure for hasty action – moving too fast.

So, the highly fragile, ambiguous, and anxiety provoking nature of much tacit knowledge means, that leadership needs to play a critical role in creating the right environment for knowledge sharing, discovering, and surfacing. Indeed, many suggest the core challenge of leadership is to create an innovative climate which is open to different perspectives and enables people to express diverse opinions and ideas amongst each other and levels of experience – and thus enabling people to externalise and share that really valuable tacit knowledge.

However, valuing diversity (as distinct from just tolerating diversity) and truly acknowledging different perspectives that upset the status quo is not easy for most organisations – particularly if concerned with getting on with it, or being right, and managing the present. As a result many environments do not have favourable enough conditions for organised surprises.  

Favourable conditions can be defined as a “place”, a “context” or “space” where knowledge is shared, used or created. It can be physical, virtual or mental and is referred to by Ikujiro Nonaka and Hirotaki Takeuchi in their research, articles and book (The Knowledge Creating Company) as favourable fields of interaction or Ba.   

Enabling continual innovation potential

In this article we introduced the link between knowledge, favourable conditions and innovation potential. If you believe releasing innovation potential is key to you or your organisation you need to ask yourself: is your organisation ready for organised surprises?  

During our work as Innovation Consultants/Change Leaders, and supported by years of research, we have learned that knowledge sharing is best done through conversations – what are sometimes refers to as dialogic conversations. Our research and experience along with others such as Von Krogh in his book “Enabling Knowledge Creation” shows that there are five key enablers which contribute to uncovering needs, creating ideas, solution development and diffusing innovation. These are: 

1.       Instilling a Vision

2.       Managing Conversations

3.       Mobilising Activists

4.       Create a Favourable Climate

5.       Globalise Local Knowledge

All five of these enablers are important to success over the whole innovation lifecycle but two - Creating a Favourable Climate and Managing Conversations are the two most important to get things going. So, article 2 will explore Creating a Favourable Climate and article 3 will explore Managing Conversations. Article 4 will integrate everything back together for continual innovation.  

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