Monday, 24 October 2016

Necessity is the Mother of Innovation

It’s rather gratifying to see so many people embrace the ethos of Innovation. Last year’s National Innovation and Science Agenda (NISA), followed by this year’s Defence Industry Policy Statement (DIPS), has prodded Australia to examine its relationship with the whole concept of innovation. As companies, research establishments and individuals start to consider the term’s implications for them, we’re starting to see a flood of magazine articles, books, on-line courses and all sorts of helpful advice on how to ‘do’ innovation.

This might be a good moment at which to examine our understanding of what Innovation is and isn’t, and how it actually happens. There are probably company leaders out there who think innovation is all about boffins in lab-coats, or bratty Gen Y-ers doing unlikely stuff with smart phone apps. They probably think bean bags are important. Some of them probably think that you can make your company innovative simply by opening an ‘Innovation Department’ and saying nice things about innovation in the annual report.

This is all symptomatic of a wider misunderstanding of how innovation works. There’s an instinctive grasp in the community at large that individuals and organisations will benefit from being more innovative, but some discomfort about the word itself, its implications for the future, and the psychological and organisational challenge that it represents. In fact, the process that we call ‘innovation’ has been around since the Stone Age and people have been innovating busily without realising (or even needing to know) that’s what they were doing. This post is intended to help simplify things a wee bit for modern folk who worry that innovation is a black art.

There are three things that individuals and organisations need to know about innovation. The first is this: innovation doesn’t happen in a vacuum. Simply telling people to go away and innovate, or to huddle together in collaborative groups and innovate, is pointless. Innovation begins with a customer, an end user, who has a problem that your innovation can help him or her address.

That customer could be internal – your production engineers might be looking for a way to produce, say, industrial chemicals quicker or cheaper, or at higher levels of purity. Or it might be an external customer: a health service provider looking for a new way of doing ultrasound scans, a laboratory looking for some kind of sensor that will enable it to measure the results of new, ground-breaking research, or an Army looking for a lighter, more accurate rifle.

If you’re not trying to address an end-user’s problems then you’re probably just doing curiosity-driven research. And that’s incredibly valuable, but it’s not innovation. Successful innovators need to be outward-looking: they need a good relationship and honest feedback from the end user. There’s nothing new in this for the majority of forward-looking businesses and research centres. That old adage, “necessity is the mother of invention” pre-dates the term innovation, but is still the fundamental truth that drives it.

Secondly, Innovation is about Change. When you innovate you make a change in what you do, or you enable somebody else to make a change in what they do. If you take enough time to understand your customer’s needs, you’ll understand where they want to go, and how your innovation process will help. Simply replacing one widget, or process, with another that achieves exactly the same thing is not innovation. Me-too-ism in the marketplace – copying or emulating somebody who has done something new or different – isn’t innovation either.

Re-fashioning your business in response to major market changes, or making a significant difference to production costs or achievable volume, or achieving strategic self-reliance in a crucial area, can be innovative. Successful innovation is aligned with design thinking: it starts with the customer and seeks to understand where the customer wants to go: what he wants to do, but can’t at present. And sometimes, the customer isn’t aware of all of the possibilities that are open to him – what can you do for him, or help him to do for himself, that he hadn’t even considered? That’s where the innovator’s expertise comes to the fore, and is the basis for the trust between innovator and customer that is so important. 

Thirdly, it is possible to organise your business to be more innovative. There is no single, universal template or set of rules for innovation, but there are some universal principles. An innovative organisation needs four key attributes. The first of these is Self-Awareness: it needs to understand what it’s doing, why and how well it’s doing it, and what it needs to change if it wants to do much more of the same, or something quite different.

It also needs Situational Awareness: it needs to understand everything happening externally that will affect what it’s doing. That could be fluctuations in exchange rates or the prices of raw materials; it could be a change in the behaviour, or the needs, of the customer; it could be the emergence of new players in the market; it could be the sudden emergence of new technologies that disrupt the market. The innovative organisation needs sensitive antennae and good external contacts so that it always has access to critical information and is open to unexpected revelations and challenges. Situational and Self-Awareness inform, and are informed by, each other.

The innovator needs what I call Professional Mastery. Any organisation, whether it be a sports team, a government department, a shop or a fighter squadron operates in a more or less specialised domain; the leader, and staff, must collectively be experts in whatever it is they’re doing. Their ability to become, and then remain, experts – and their understanding of what that means - is informed, and informs in turn, both Self-Awareness and Situational Awareness.

And then he needs what I call Business Mastery, or the ability to organise oneself so that the organisation as a whole flourishes and all of these attributes enjoy the attention and resources they need, at the time they most need them. One of the most important aspects of Business Mastery is a leader and key lieutenants who are committed to the idea of innovation and willing to embrace the internal changes that are necessary to begin the innovation process, and the others that inevitably follow as the process takes its course. The right leaders will make sure the right combinations of skills and personalities are assembled for new projects and ongoing operations, and that investments are made in the right skills and capabilities. And that the resources necessary for those investments are available. Business Mastery informs, and is informed by, each of the other three key attributes.

If that all sounds a bit simplistic, don’t dismiss it lightly: it may look simple, but achieving it is not easy. Applying these principles to your own organisation requires judgement and effort, and a proper understanding of your business and how it works; and it will probably take time to embed the cultural changes necessary to embody these principles. The open literature is full of tools to help innovators understand how to apply them to their own circumstances.

And that’s innovation in a nutshell: no bean bags, no boffins and no management-speak. You just need to be very good at what you're doing, and aware of the context in which you're doing it. Not easy, perhaps, but there’s nothing in all this that’s new to the genuine innovator. Real innovators have been following these simple, universal principles for millennia.


  1. …and all three prerequisites required for innovation are missing in Defence

    1. Not sure that's entirely true. To take one example, Army has a pretty vigorous program of modernisation and force development that has Innovation written right through it. Not all of Defence is like Army in this respect, however, but there are encouraging signs that Defence's innovators, as a sub-class, are getting more encouragement - even (dare I say it!) empowerment!