Innovation Ecosystems: A new way of seeing (Part 2)

In our previous blog post, Innovation Ecosystems:A new way of seeing (Part 1), we outlined a new way of seeing innovation and organizing to allow innovation space to grow and blossom.

This week, we’re diving in and seeing what it all means to you, your business, your industry, and your future as an innovative organization in an innovation ecosystem.

As we considered the idea of the innovation ecosystem, we recognized four main areas of implications for our clients and for you and your organization...

A high level overview of the more significant implications would include:

How You Approach Innovation

1. You must understand what innovation ecosystems you belong to (that’s right, you can be in more than one) and what role you are playing in each at any given time.
2. You must not think or act as if innovation is restricted or held isolated inside your organization; you must understand that innovation is happening all across your ecosystem, within the actors in the system, at the interstices/boundaries of the actors, and with varying degrees of impact across the system. As customers innovate, those changes flow back to you or skip directly to suppliers, some of which you might not even know.
   As suppliers innovate they can flow to you, or directly to your customers, or create new customers for the innovation you may not be aware of. As universities, research groups, government agencies innovate, those innovations can impact anywhere in the ecosystem.
   This is a non-linear flow of impacts across the ecosystem, and there will be varying degrees of uptake and level of impact depending on the innovation and what role any actor is playing at any given time within the ecosystem. And it may not be clear just what the results are or will be.
3. Since the ecosystem must be considered as a whole, you cannot just look one or two steps up or back as you would in a value chain, or first levels of a cluster, etc. You must be able to sense across and within the whole ecosystem, and you must do it actively, not as a passive “listener”. You must actively pursue learning about what is happening inside the ecosystem, which innovations can impact your ideas and innovations, which ecosystem innovations can be threats or opportunities, and how your innovations will play inside the ecosystem.
4. You have to decide if you will act as a Steward of the ecosystem(s), helping the system to remain stable for success and helping to regulate change.

This a much more intricate process of sensing and learning and acting but remember, an innovation ecosystem is not simple or even complicated: it is a complex system, and requires a different orientation than linear systems.

The Design of Your Innovation Program

1. Firstly, successful innovation programs inside the ecosystem are designed to take advantage of the innovations occurring across the system. An organization’s innovations, whether for the marketplace or internal process improvements, are informed by, sometimes guided by, and take advantage of or supplement other innovations occurring within the system. A “not invented here” attitude, a practice of isolationism or refusing to see the ecosystem for what it is, is the kiss of death in the ecosystem.
2. However, this does not mean that innovations within the system are always initially connected to other innovations or ideas within the ecosystem. Indeed, many innovations can be new to the ecosystem with no ecosystem precursors, or come from outside the ecosystem. These innovations can arguably have the most impacts across the ecosystem and can be game changers, system disruptors or system expanders.
3. So secondly, an organization should expand its sensing and learning - by design - beyond what it considers its “primary” ecosystem, and look into other ecosystems, e.g., a manufacturing company looking at what is happening in the telecom sector ecosystem.

 How You Manage the Innovation Process

1. Remember the rule about isolationism? The organization must actively allow for the sharing and development of ideas and innovation across the ecosystem. Identify those individuals in the organization that touch other actors in the system, and charge them with actively pursuing relationships and idea sharing across those boundaries - which are fluid and should be considered permeable and not as barriers.
2. Know when the time is right to invite other actors in the ecosystem “inside” to help develop ideas, prototype, and launch and implement innovations.
3. Understand the pros and cons of closely held intellectual property. Many times good ideas and innovations languish because an individual or organization can’t see their way to inviting others in, and thereby miss the very resources and enablers they need for success – we have seen this time and again. Remember that an idea is only valuable when it becomes something real and begins to create value for the system.

 Where Ideas and Innovation Come From

1. This is where the “not invented here” syndrome can cause an organization to start the death spiral to failure or irrelevancy. Within the innovation ecosystem, it’s not justwhat ideas you can come up to within the organization, but more importantly the ideas that feed and grow and are seeded and influenced across the system. As Steven Johnson notes in Where Good Ideas Come From, “Eureka!” moments do happen; when a number of seemingly unrelated ideas, from many different sources, suddenly coalesce in a group or in an individual’s mind, when many ideas held in the minds within the ecosystem suddenly are triggered and coalesce into something new, something unique, something greater than the sum of the parts.
2. Innovation does not come out of nowhere - it is the act of combining and recombining, compounding, transposing, augmenting/diminishing ideas into a concept that can be refined, adopted and used by the ecosystem, or create a new ecosystem around the concept (e.g., a new technology or systems solution)

Recognizing the distinctions of seeing your organization within an innovation ecosystem(s), and designing them into your approach to innovation, the design, management and source of ideas for your innovation program and process is the first step to a more successful and innovative organization.

For more great reading, check out Kevin Kelly and Steven Johnson on Where Good Ideas Come From, Wired, Web.

A version of this article is also published at GO Productivity’s Website Blog