Codifying Innovation

“If you think back to a couple of hundred years ago, we had artisan type work. You were a book writer, or a craftsman and your efficiency at reaching scale was poor. So we moved into the industrial era where we got efficiency, but we lost the artisan talent that each of us could bring,” says Nilofer Merchant. “And now networks mean companies can actually allow individual perspective and creativity and individual talent to come back, but without losing the ability to have scale. I think that’s where we are with this tectonic shift. It’s something that all human beings have and desire – the ability to have their ideas and creativity matter. They want to have their own art show up in the world.  They want to use and showcase their individual talents – whatever they are.”

The world of innovation is continually changing.  In the beginning was Innovation 1.0.  It took innovation – ideas to change and improve things – to create the great monuments of history.  In difficult times it took innovation to survive.  The Industrial Revolution was a feat of innovation built on the brilliance of innovative individuals.

And then came Innovation 2.0. This was the great contribution of the modern industrial age to our understanding of innovation. During the twentieth century innovation was structured.  Corporations, the great institutions of the age, built large-scale R&D labs from which a steady stream of new products emerged.  Innovation was scaled.

Innovation 3.0 brought greater understanding of the dynamics of innovation, how it worked in industries, markets and across geographies was researched and held up to the light.  Clay Christensen’s concept of disruptive innovation was the apotheosis of Innovation 3.0.  It made sense of the broad drama of innovation as never before.

Now, we are in what could be described as the Innovation 4.0 age.   Since the arrival of the new century and the internet, innovation has begun to be freed from the organizational shackles of the twentieth century.  Companies are opening their doors to ideas from consumers, suppliers and competitors.  Start-ups are seen as the innovative heart-beats of the economy and project teams (often global and virtual) as the atomic force behind innovation.

The big themes of Innovation 4.0 can be codified into five strands:

One: DEMOCRATIZING INNOVATION: The dominant story of the first decade of the twenty-first century was the opening up of innovation.  Innovation’s reach and practice was stretched as never before.

The key thinkers driving this trend were CK Prahalad and Henry Chesbrough.  Prahalad championed the idea of “co-creation”, arguing that increasingly innovation was co-created by consumers and companies.  Henry Chesbrough coined the phrase “open innovation” to describe the opening up of innovation to input from all-comers – based on the inspiration of the open source movement in IT.

Two: REFINING DISRUPTION:  Clay Christensen’s ideas on disruption shed new light on the dynamics of innovation.  Through concepts such as disruptive innovation and the innovator’s dilemma, Christensen made sense of the broad sweep of how innovation developed and impacted on industries and companies.  In recent years, Christensen’s ideas have been refined, developed, and questioned.  He has applied them to other sectors – such as healthcare and education – and they have also been applied to our personal lives (by Whitney Johnson among others).

Three: JUNCTION THINKING: As the importance of innovation has been increasingly identified, its relationship with other areas of business activity has also been explored.

Chan Kim and Renee Mauborgne developed the concept of “value innovation” to describe how companies develop new sources of value for consumers.  Costas Markides also works in the junction of strategy and innovation.   How innovation relates to – and drives – issues such as business growth and business models is of increasing interest — exemplified by the work of Alex Osterwalder and Yves Pigneur.

Four:  INNOVATION MECHANICS:  How innovation actually works is now explored rather than assumed.  Linda Hill from Harvard Business School researches different approaches to leading innovation and there are a host of champions of different takes on creativity.  Design thinking, a process and philosophy drawn from the design industry, puts the case for small, multi-disciplinary teams, and constant piloting of new ideas.  This has been written about by Roger Martin, among others, and is typically exemplified by the design firm IDEO. A range of tools and frameworks are now available to enable organizations to maximize their innovation capabilities. Joseph Pistrui’s “nextsensing” seeks to explain the future and others focus on the human aspects of innovation – using and developing teans, as well as leading highly innovative individuals.

Five: BROADENING THE CANVAS:  Throughout the twentieth century the emphasis of innovation was on the Western corporate world.  Their model of organizing and commercializing innovation was inspired by Edison’s development of Menlo Park – a team of experts, focused on a particular problem, isolated from the world.

Now, thinkers no longer assume that the West has a monopoly on innovative wisdom. Vijay Govindarajan’s concept of “reverse innovation” highlights the fact that innovation is no longer a one-way street from the corporate West to the developing world.  And, alternative approaches to innovation, such as “jugaad innovation” and “frugal innovation” (reported on by Jaideep Prabhu and Navi Radjou) offer an alternative.

At the same time, it is appreciated that deeper understanding of the structures and dynamics of successful innovation can be applied to some of the world’s largest and apparently most intractable problems.

In the twentieth century innovation focused on improving industrial performance and increasing consumption.  Now, its attention is moving to tackling poverty, enabling emerging markets to grow and the other great challenges of our times.

This was originally published in What we mean when we talk about innovation by Stuart Crainer and Des Dearlove (Infinite Ideas, 2016).