Innovation of Business

and the
Business of Innovation™
Innovating in the Midst of Change

Thriving without a Stable Foundation

Change is not a choice.  Change happens, everywhere, all of the time.  The only way to manage change is with change.  In our advancing civilization, change accelerates.  To stay in control of our businesses (and our lives), we must continue to change.

Change is not a choice.  Every business is an ongoing source of change.  (New products, new processes, and new value for new markets of both new customers and old customers who are constantly changing.)

Every professional discipline is a process for change.  (Leadership, management, science, engineering, marketing, product development, project management, sales, human resources, financial management, and others)

Every desirable skill set is both toolkit and resource for change.  (Thinking, learning, questioning, deciding, creativity, invention, innovation, productization, communication, relating, and more)

Every fundamental business principle directs us to change.  For instance, to “Satisfy customers!” we must deal with ongoing change in customers, needs, ways to meet needs, competition, brand recognition and loyalty, modes of access, and a myriad of relationship issues.

Every business relationship is based on win-win exchanges of value, and each of those is a source of change.  Indeed, the health of relationships depends on ongoing renewal.

Change is not a choice.  The rate of change is accelerating.  Call it “acceleration by abundance”.  Change is accelerated by abundance of connectivity, bandwidth, information, access, robotics, globalization, population growth, new technical disciplines, new markets, new tools, competition, cooperation, and vastly more.  Ironically, every one of our own efforts to keep up with change also accelerates our change.

Change will never be a choice.  Get used to it.  Our job now is to learn how to thrive in a change-based environment whether innovating businesses, products, services, processes, or events that serve external or internal customers, investors, and/or other stakeholders.

Grounded in Gaps
Innovation is today’s preeminent survival tool.  Innovation is how we “manage change with change.”  To succeed, we need to carefully balance the fun of innovation with its fundamentals.

Change challenges businesses of every type.  In particular, change constantly and relentlessly creates gaps.  Every business action becomes an effort to close a lagging gap, create a leading gap, or both.  In particular, changes in market and competitive environments cause at least:

?    Knowledge gaps:  Between market reality and what we know
?    Focus gaps:  Between our market knowledge and our vision and goals
?    Strategy gaps:  Between what worked in the past and what will work in the future
?    Ability gaps:  Between what we can do and what we need to do
?    Satisfaction gaps:  Between what we offer and what stakeholders actually want
?    Perception gaps:  Between what stakeholders think now and what we want them to think
?    Profit gaps:  Between current and desired return on investment

Delays exacerbate gaps.  Everything takes time, so we are never completely in synch with our marketplaces.  Resistance to change adds delays.  Persuasion to act takes significant time and resources.  We must respect the effort it takes to gain support.
Even success creates gaps.  Every new product or service changes market expectations.  Making our numbers this year sets expectations for next year.  The Seven Gaps will always drive business.

Innovation can deliver temporary gap leadership.  Innovators see far enough into the future to define, design, develop, and deliver what markets will want just as soon as they know such a thing is possible.  For a brief period, our knowledge, focus, and strategy may actually be ahead of the customer curve, creating satisfaction, positive perceptions, and excellent profits.

Only the extraordinary can sustain Gap leadership.  Every standard of excellence refocuses competition.  Success in product innovation also forces innovation up at business level and down at process level.  Innovation isn’t complete unless designed to deal with all Seven Gaps at many levels of business.


Change-Driven Innovation

By definition, innovation is all about change.  It delivers new value via the sum of invention and commercialization.  It turns ideas turned into businesses, products, and processes that yield customer satisfaction at profit sufficient to reward investors and enable the next cycle… forever.

Innovation is also a toolkit:  A suite of skills, knowledge, and processes for turning ideas-plus-investment into profits.  From a toolkit perspective, innovation must be designed to operate within ongoing change.  Gaps define change out in our markets which drives change inside our business that is achieved by systems of innovation tools. 
A dynamic, productive change-leadership system of tools will be…

?    Empowering:  Supports and enhances all required professional disciplines
?    Effective:  Achieves substantial impact with high confidence
?    Efficient:  Achieves required results on time, in budget
?    Elegant:  Does the job in highly professional, highly desirable ways
?    Configurable:  Works in diverse change environments for a variety of innovation teams on change efforts of different sizes serving a range of unique stakeholders
?    Robust:  Handles even the most difficult situations quickly and reliably, and works well over time without need to relearn basic rules of operation
?    Multifaceted:  Is a complete system with powerful tools for each aspect of change

To close the Knowledge Gap at business and product levels, for instance, we need a market-research toolkit with the above characteristics.  For external markets, we need tools for learning about customers, marketplaces, recognized needs, unspoken frustrations, competitive offerings, technology trends, rates of change, and so on.  For internal markets, we need tools for gaining similar information about our colleague-customers for our strategies, processes, skills, and experience.

Again:  Gaps define required change in at least seven dimensions.  That is, Gaps drive change initiatives to manage change through innovation of businesses, products, processes, capabilities, strategies, brands, relationships, and more.

To better understand toolkit requirements, we can draft a simple outline of a change initiative.  In this context, the Gaps themselves define long-term goals and plan year objectives.  Change initiatives are then strategies for achieving objectives by managing gaps.

1.    Identify possible change initiatives and respective stakeholders
2.    Clarify potential value and impact on all stakeholders
3.    Prioritize possible initiatives
4.    Define and design chosen initiatives
5.    Build commitment among stakeholders
6.    Launch the initiative
7.    Manage the change process through to completion
8.    Persuade stakeholder adaptation to resulting change
9.    Sustain the change

Developing Change-Driven Tools for Innovation

Now is the logical time for disclosure of the magic tools.  Sorry.  Not today.  Instead, I’ll mention criteria for developing your own tools.  Note that steps 1 through 6 above might be seen as leadership tasks.  Steps 7 and 9 require many facets of management.  Steps 5 and 8 involve strategic, product, and tactical marketing.

The first four steps set the stage for action.  Business plans and other action plans, in turn, integrate wide ranges of decisions.  Rather than interrupt planning to make the various decisions, we can improve our vision with formal decision processes.  That is, we accelerate planning by creating, in advance, an integrated, multi-faceted vision made of the required decisions.  To develop your own tools, you’ll need to decide at least the following:

?    What decisions to make (relevant to particular aspects of change initiative)
?    What questions to ask (to enable decisions)
?    What decision processes to use (how to pose and answer questions)
?    When answers are sufficient (tests for completeness and validity)
?    How to achieve consensus (prioritizing and voting methods)
?    How to synthesize (integration of answers into a suite of mutually compatible decisions usable in planning)

To get you started, consider the following high level questions required for a business plan:  Who is the business?  Who does it want to be?  Where does it wants to go?  How does it intend to get there?  What does or will it value?  How does it intend to behave?  To answer the high level questions, break each one into clusters of smaller questions.  Work with the clusters to be sure you ask important questions and haven’t forgotten key issues.  Complete the process by synthesizing answers into a multi-faceted vision.

Because our world is complex and always changing, we need empowering, effective, efficient, elegant, configurable, robust, and multifaceted innovation toolkits that ask and answer questions that help address Seven Gaps that constantly drive change in our businesses.  That is, we need to develop a dynamic change-leadership system.


Thriving in Change

Business today faces three change problems:  Learning to thrive in a change-based society, managing change thrust upon us, and envisioning, initiating, and sustaining desired new changes.  Solutions include mindsets organized around change, new capabilities in people and organizations, tactical change management for implementing desired changes, and strategic change leadership:

Proactivity enables productivity. 
The time for change is now, and it always will be™.



9. Theory is knowledge that doesn't work. Practice is when everything works and you don't know why. (Hermann Hesse)

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