Entovation® International - Delivering Knowledge Innovation Strategies for the Millennium
Pasher - Amidon Interview
What do you think of the balance between reuse and innovation? The most important thing is to have a clear definition of terms. The innovation process includes three phases: invention, translation and commercialization. The first phase can focus upon creating something ‘new’ – usually considered an invention - or identifying something already known that might be reused – or used in a new way. Both feed the innovation process. Both could be considered as part of the creation stage – knowledge creation.

The second stage of the process is the conversion process – where knowledge – sometimes in the form of technology - gets translated into production, manufacturing. At stage three, the knowledge – now in the form of some product or service – can be commercialized.

What stage would you consider as the NPD (new product development stage)? Knowledge creation can include prototype development or the NPD might be considered the first part of the conversion process.
In what way can NIMCube add value to both processes – innovation and reuse? In my definitions, ‘reuse’ is not a separate process. It is one way to look at the innovation process (i.e., reusing something rather than creating something new.). Whether you are inventing something new or reusing something that already exists, the intent is to have a result in the marketplace.

There are many ways to measure the effectiveness of the process - output, time to market, quality, cost, performance, competitiveness, market share. These are the traditional results of any innovation process. Your project can make a contribution toward understanding the value of the intangibles (e.g., quality of conversations, receptivity to new ideas, viewing old things in new ways, etc). You can have a dual entry (i.e., new and reuse) into the conversion process and calculate the differences.

What is the framework for understanding innovation? For many years, the innovation process has been managed as the linear sequence of events, such as in the value chain - gathering technology an/or material, converting it into some kind of product or service and commercialize it. However, knowledge - new or reused - can be added anywhere along the process (e.g., R&D, Engineering, Manufacturing, Marketing, Sales, and Service). Similarly, value is added throughout the entire process. And so, the innovation process operates more like a value system than a linear chain of events/activities. The real challenge is not the function in-and-of-itself, but how it relates to (adds value to) the others. How is knowledge created and shared between all stakeholders in the process, including customers themselves? This can only be understood by employing concepts and methodology of system dynamics (i.e., the innovation value system).

People always looked at innovation as equivalent to creativity. Although innovation may be perceived as a creative process; creativity alone will not lead to prosperous innovation. It is not enough to have a good idea or an invention – or knowledge to be ‘reused.’ The real innovation process includes effective application through high quality management methods. Thus innovation is a combination of creativity and quality, long- and short-term, strategy formulation and operations.

How would you manage innovation? There is a new knowledge value proposition emerging that goes beyond the traditional metrics of cost, quality and time. Not that these are not important; they are. But, they are just not enough. To manage the process effectively, one should understand the difference between traditional management and the "I form" – the innovation form, which is a dynamic, networked organizational form. Traditional management is multi-divisional and hierarchical, where business units are independent (SBU’s) as opposed to the human knowledge form which focuses on strategic business networks and intangible assets. Successful management of innovation requires a combination of both.

The organization should adopt management architecture to integrate the economic, behavioral and technological aspects of the firm. This may require a replacement of the current performance metrics - output, cost, quality, time, market share, competitiveness, which represent the old value proposition and to find new variables, such as the quality of a conversation or how quickly an organization adapts to market changes. In short, the firm may have to migrate from a strategic planning to innovation strategy approach that provides a more robust utilization of tangible and intangible assets. The whole organisation must be engaged in the innovation process.

One might use the analogy of an Atlas to describe the new management elements:

- Mapping considers all the resources – human, financial and technical – to be integrated as a continuous learning system

- Scaling measurements consider the intellectual capital of an enterprise – often described as the difference between book value and market value

- Compass provides a coherent, common vision within which internal and external variables are leveraged to optimal value including the flexibility to capitalise upon unexpected market changes.

Structures should be developed and must be custom-made to the specific needs of each business. Procedures should be created and management should enable stakeholders to take part in the process.

How could we measure innovation? We have created an innovation assessment that includes ten dimensions of the process. There are a series of defined management responsibilities: internally and externally. The internal tasks are coordination of the process, measurement of the process, education/development capability, distributed networking and competitive positioning. The external tasks deal with new market products and services, collaborative alliances, market image, leadership competencies and use of cyberspace.

Each set of questions includes the economic, behavioral and technological dimension. Traditionally, assessments are performed by function (i.e., R&D, Manufacturing, etc) rather than being seen as an integral part of the innovation system – knowledge creation, conversion and commercialization. In this assessment, the questions are designed to stimulate a dialogue across the functions in a way that competencies are brought to the fore, not whether someone holds a specific function title. Once people use the assessment systematically, new and relevant measures will emerge.

Did you have some measures in mind while creating the assessment? There are indicators, which will make each of those ten dimensions more effective; and there are other indicators that will optimize the interrelationship. Only when people put the assessment into operation (i.e., build and implement the strategies to close the gaps) will the real critical success factors evolve. Based on our research, new managerial standards appear to emerge. In my book Innovation strategy for the Knowledge Economy - The Ken Awakening, I reference some of them. There is considerable follow-up activity underway worldwide that is crafting new measures based upon the intangibles of the organization. Strategic conversations are one example. Balancing the rate of internal change with the rate of external environmental change is another. Below are some management strategies from which modern performance measures might come:
1 Management of the collaborative innovation process with a designated chief officer.
2 Systematic performance measurement of the economic, behavioral and technological dimensions.
3 Centralization of research and education facilities for new business development.
4 Establishment of a distributed learning network of innovation centers.
5 Integration of "real time " intelligence capabilities.
6 Creation of a stream of value added products and services.
7 Leveraging collaborative innovation practices with alliances and joint ventures.
8 Design of advertising campaigns that reflect intellectual competencies.
9 Leading by visible example – to share learnings.
10 Use of the cyberspace as an electronic learning tool for new ideas.

What real indicators will make such an innovation value-system successful? Those are the questions that have yet to be asked.

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Last updated: 26 Jul 2000