New Realities and New Survival Strategies

In today's tidal wave of global economic, technological, and social change, the name of the game for you and your organization is survival. You are not going to survive in this new economy through technology innovation alone.

The New Era of Systemic Innovation

Innovation used to be a linear trajectory from new knowledge to new product. Now innovation is neither singular nor linear, but systemic. It arises from complex interactions between many individuals, organizations and their operating environment. Firms which are successful in realizing the full returns from their technologies and innovations are able to match their technological developments with complementary expertise in other areas of their business, such as manufacturing, distribution, human resources, marketing, and customer service.

Innovation is not divisible – ‘good in parts’ is no good at all. Innovation systems are only as strong as their weakest links. "You can't do carpentry if you only have a saw, or only a hammer, or you never heard of a pair of pliers. It's when you put all those tools into one kit that you invent," advised Peter Drucker.

Holistic Approach

Innovation is the key driver of competitive advantage, growth, and profitability. There are many parts of the whole field of innovation: strategy innovation, new product development, creative approaches to problem solving, idea management, suggestion systems, etc. All of these components are important. "Yet approaching them piecemeal will bring piecemeal results... These seemingly disparate issues must be integrated into a single overarching strategy if they are to be mobilized in the quest for growth," says Robert Tucker. In this new era of systemic innovation, you must design your firm's innovation process holistically.

Technological Interdependence

Sophistication of new technologies and the increased reliance on the application of new technology by business has produced several different forms of interdependence for companies:

• between industry and R&D institutions and other sources of external research

• technology chain – supply chain, production, and customer relationship management - the application of a new technology in one of these requires changes in the operations of others

• products and processes – the focus of technological advance may shift interconnectedly between one and the other

• new product/service development jointly by several firms through collaborative R&D, and cooperative technology agreements

• outsourcing of some new product development phases, e.g. product design or rapid prototyping, to specialized firms

• different functions within the firm, e.g. manufacturing, distribution, human resources and marketing.

• overlapping and merging technologies that cause interdependence between previously separate industries, e.g. merging of information technology with communications or entertainment.

Systems Thinking

Systems thinking is your ability to things as a whole (or holistically) including the many different types of relationships between the many elements in a complex system. "Systems thinking is a sensibility – for the subtle interconnectedness that gives living systems their unique character," says Peter Senge.

Modern Systems Approach to Performance Measurement

You must master your systems thinking skills as measurement today must be neither and end nor an activity in itself but a part of an integrated system for enhancing business performance as a whole.

The Growing Role of the Business Architect

In today's knowledge- and innovation-driven complex economy, business architects are in growing demand.  They are cross-functionally excellent people who can tie several silos of business development expertise together, lead business innovation, create synergies, design winning business models and a balanced business system and then lead people who will put their plans into action... More

 Case in Point  25 Lessons from Jack Welch

At General Electric (GE), the sum is greater than its parts as both business and people diversity is utilized synergistically in a most effective way.

When asked if GE was going to become a more product-oriented or service-oriented company, Jack Welch, the former legendary CEO of GE, replied, "It's got to be a big combination... If we weren't doing the engine and the advanced diagnostics and all that, we couldn't do services. People shouldn't ask, "Are you going to be out of manufacturing and into services?" If you are, you're dead. If you are going to be all services and no manufacturing, you're dead. If Bill Gates didn't have cooperation with Intel, his system wouldn't work on their chips. It's an integrated game."

"Practice systems thinking and holistic approaches," advised Jack Welch. Seek to improve and optimize the totality of your business rather than the profits of its components. "Everything about this enterprise is doing more with less. It needs rejuvenation all the time. Quality is the next in the learning process. Getting rid of layer. Getting rid of fat. Involving everyone. All that was to get more ideas. The whole thing here is to create a learning organization."

Manage Systemic Innovation by Cross-Functional Teams

In strategic innovation road-mapping, the starting point for knowledge building and learning about the innovation concept is to establish a shared view of trends, disruptive technologies and other discontinuities, and related events that could shape the future. To move efforts forward, cross-functional teams, either formal or informal, need to be formed. For incremental innovation product or service development projects, a cross-functional team  typically includes a technical guru, engineer, designer, manufacturing expert, supply chain specialist, and marketing specialist. Your major suppliers and customers need also to be kept well informed of your new product/service development plans and allowed to work together to build these new solutions.

Radical Innovation by Cross-Functional Individuals

"Here is the paradox: You need a great team of people with diverse skills to perform a symphony well, but no team has ever written a great symphony!" – Ken Matejka

While cross-functional teams are key players in defining and implementing incremental innovation projects, cross-functional disruptive individuals tend to be key players in defining radical innovation projects. Individuals who are likely to excel in a radical innovation project, besides having superior technical capabilities, should be goal-oriented, broadly educated, creative, extremely bright, not afraid to be different, integrative, flexible, passionate, entrepreneurial, aggressive, eager to learn business, able to take risks, and inquisitive.

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