A few months ago, we asked what democracy could teach us about innovation. We’ve more recently expanded the definition of innovation beyond proposition design.
That reframe sparked a series of conversations with dear subscribers like you, and colleagues across the inno-sphere.
On the surface it seems like innovation is everywhere if you know where to look.
The obvious take is that innovators are ego-driven and subsume every other profession into their own. A superiority complex supercharged with fancy frameworks.
The counterintuitive take is that innovators are a humble bunch, and see opportunities to make others the hero of their own stories, happy to play a supporting role.
The reality is somewhere in the middle. Surprise surprise, we end up at the junction between two competing forces. Building a bridge between the two - even establishing language with which to have a productive conversation - is the best first step.
Last week’s post was from the perspective of ‘the business’; someone working with or investing in innovation teams. The implication is that the business ‘needed’ innovation more than the other way around.
This week, we’ll flip the script and show how the business is already doing elements of innovation, bravely, smartly and effectively.
There absolutely is a role for innovation, if we can get out of our own way.
No one has a monopoly on innovation. Though it does need some keepers of the flame.
Some overlooked sources of innovation, and opportunities for collaboration:
Policy is innovation– Every policy is a prediction. “If we raise taxes, we’ll have more to spend on healthcare.” “If we reduce regulation, we’ll encourage more entrepreneurs.” All policymakers are forecasters. Every policy is a new idea that’s trying to add value. You have a customer in the form of a voter, a value prop in the form of a bill, and validation in the form of an election. To be good at setting policy, you need to have an innovators’ mindset. If each policy is a hypothesis, then good policymakers need testable, small-scale experiments to run and repeat. Likewise, good innovators need to understand policy. We need to understand the spirit and the letter of the law. You first need to play by the rules before you can play with the rules. Regulation, legislation and policy are one of the most powerful forms of innovation, as they are the hardest to get right, but the most durable competitive advantage when you do.
Risk is innovation – As innovators our job is to reduce risk and uncertainty - do experiments, talk to customers, fail cheaply, learn. Far from being rebels without a cause, innovation teams can be good stewards of risk; boring, even, in our prudence. Diligent risk management and innovation pipeline management are one and the same. Each of our value props weigh the risk and reward, and if there’s a less risky way to achieve 90% of the same goal, we’ll take that route 10 times out of 10. It’s why we’ve stopped using words like “radical” “disruptive” and “transformational.” We’re not in that game. We do, however provide “validation” “confidence” and “explanation”. Much more soothing to the auditor’s ear.
Finance is innovation – Finance plays the role of capital allocation. How do you direct limited resources to the highest and best uses, among competing priorities, with uncertain payoffs? Sounds quite like innovation to me. The innovator can bring “data from the future” to the table to complement historical market data, forming a more complete picture of the world as it is, and could be. Business model innovation and the design of business are how most of the world’s most successful companies have continued to thrive. Excel has as much a place in the pantheon of innovator’s tools as Miro.
Strategy is innovation – If good strategy is all about making great choices, then innovation is just good strategy by another name. Strategy and innovation both manage the balance between optimizing for today and building for tomorrow. The both set visions, inspire and clarify. In our field trip travels, we’ve seen several innovation functions started by former strategy folks. The ability to facilitate consensus among stakeholders is a superpower in both fields.
Operations is innovation– Application is the difference between invention and innovation. Operations are an organization’s “execution engine” that transforms potential value into realized value. Thinking of operations as applied innovation allows us, as innovators to better design stuff that works. And we can learn a lot from rigorous process, streamlined structure and a focus on metrics to repeatedly keep promises.
Evolution is innovation – Evolution is outcome agnostic. By running a series of blind experiments over millions of years, new properties emerge. This is the hardest type of innovation. It’s natural to have preferred outcomes and to subtly bias outcomes towards what we think should happen. But customers, like nature, have a mind of their own. There are also deep systems at play that shape our environments and react to the last experiment we did. The best we can do is to approach our experiments free from judgement. The more we can operate in service of the greater good, though it might look different that we think it should, the more successful we’ll be in the long run. Knowing that incredibly complex systems can emerge from simple sets of rules lets us focus on what matters. A concrete example: in designing financial tools, it’s better treat people as they are, rather than as you want to them to be. You understand them by understanding evolutionary psychology. Then we can design something that truly has staying power.
Capitalism is innovation – Capitalism requires a shared belief that tomorrow is going to be better than today. This principle underpins our entire market system. A bank makes a loan to a small business because it knows that small business will grow and be able to pay back the loan, plus interest, plus keep some profit. Capitalism innovates elegantly through prices. It’s probably the purest form of innovation out there. A price is a signal of what people are willing to pay, and a proxy of how much they value it. It can be adjusted until you find a sweet spot. Many successful innovations start with the price first – what are people willing to pay to solve a problem? – and work backwards to design product that fits the budget.
Life is innovation – Every decision we make is a bet, a prediction, or a hypothesis. You’re betting that putting money aside today will give you happiness in the future. You’re predicting that taking a new stretch role at work will be worth the stress and growth. You’re hypothesizing that you value parking, parks and space more than proximity to work when you move to the suburbs. Decisions big or small are all bets on the future. The tools we have at our disposal, to find, frame and solve challenges come in handy with life too. The best example of this is the book Designing Your Life. It’s a powerful tool to prototype new iterations of your life, relationships, career and personality. It’s about ruthlessly reducing risk and increasing confidence in your decisions. It’s about surfacing unmet needs of the self. Life and innovation are all about finding new ways to add value to those around you, making the best use of your unique gifts to the world. That’s worth cheering for.
Innovation is everywhere if you know where to look.
My hope is that you can find innovation in unexpected spaces, and find innovators in unexpected places. Widening our aperture to the world allows us to see connections where we previously didn’t.
We want to build bridges with our colleagues and work productively to better ends.
Now we can go even further and faster armed with the language of partnership.
Onward.
What we’re reading
If you’re so smart, why aren’t you rich? Turns out it’s just chance. - The most successful people are not the most talented, just the luckiest, a new computer model of wealth creation confirms. Taking that into account can maximize return on many kinds of investment.
'Being an archibiotect is like being an haute couture designer' - Vincent Callebaut on building through biomimicry, and a reminder how nature always wins in the end.
Adding is favoured over subtracting in problem solving - A series of problem-solving experiments reveal that people are more likely to consider solutions that add features than solutions that remove them, even when removing features is more efficient. (Bonus points for Lego.)
What would the ideal hospital look like? - MedicalFuturist sets design principles for the patient care centre of our dreams.
The Eight Rules of Foresight Club - Foresight students at University of Houston’s famed foresight program wrote a description of the foresight field for non-futurists suitable for publication in a mainstream newspaper or magazine. Here’s one student’s submission.
Last word
“Trends are particles that we accelerate and collide with one another.”
- Daria Krivonos, CEO Copenhagen Institute for Futures Studies