Somebody once asked a mystic of the networked world, "What is Innovation?". Laughing heartily, he quipped, “Innovation is like a joke! It is like a fish in the ocean searching for the ocean". He then narrated a story.
"Once upon a time, there was a congregation of fish, who got together to discuss who among them had seen the ocean. None of them could say they had actually seen the ocean. Then one fish said, “I think my great grandfather had seen the ocean!” A second fish said, “Yes, yes, I have also heard about this.” A third fish said, “Yes, certainly, his great grandfather had seen the ocean.” So they built a huge temple and made a statue of the great grandfather of that particular fish! They said, “He had seen the ocean. He had been connected with the ocean.” ****
When I look at innovation today, I often wonder, how could we talk about networked age and in the same breath, talk about innovation in the traditional way. Check out what people are talking about with #innovation. More often, you would come across these words: radical, disruptive, game-changing,challenging the status-quo.
Even while we are talking about Open Innovation, Crowd sourcing and other models gaining strong currency to foster innovation in the networked world, most of us, try and put some of our familiar vocabulary, old ways of description into the new world.
While there has been several definitions and interpretations and for this word, I define innovation, for the purpose of discussion, in broad terms, as "significant positive change"
Innovation in the previous Era
Thomas Kuhn in his seminal classic, The Structure of Scientific Revolutions, talks about "The Essential tension", which led to innovation through paradigm shifts. This further evolved into classifying Innovation broadly as Incremental Innovation and Disruptive innovation.
Everybody wanted to be at the top end, Disruptive Innovation, of the spectrum. Innovation gurus and consultants advocated Disruptive innovation to their clients, as they feared large companies might be fraught with risk of getting caught unaware by new entrants. Incremental Innovation was considered uncool as it involved tinkering with the old which gave limited competitive advantage. Disruptive innovation was considered game-changing, as it involved disrupting business as usual.
Central to this discussion about innovation in the previous era, is the importance of pre-requisites. Innovation was made possible only when companies had sufficient upfront access to capital and information.
This implied that businesses had to fully conceptualize, structure and make the product ready before they could make profit out of it. No wonder products had long life cycles.
So what has changed?
Innovation in the networked world
It is high time we jettison our old definitions and redefine business once again. Simon Wardley provides an excellent definition of business in his blog.
A business is a living thing, comprising a network of people, a mass of different activities, and reserves of capital including financial, physical, human and social. It consumes, it produces, it grows and it dies. Like all organisms, any business exists within a number of ecosystems in which it competes and co-operates with others; it's shaped by and shapes its environment, and hence needs to adapt constantly merely to survive.
Business is increasingly following the principles of biology and not physics (Newtonian mechanistic model, to be precise, while, it definitely teeters around Quantum Physics, but that's another post sometime).
As Greg Satell had pointed out recently, radical changes rarely works. Radical change works by changing the levers of business ecosystem. The hidden assumption here being, it is possible to shape the industry conditions in a static business environment.
As businesses get further networked, the ecosystems are becoming more complex every day. Incremental action alone can work, where business works around the edges, evolving continuously, in sync with the way the ecosystem evolves.
With every incremental innovation, infinite starting points open up, creating further exciting possibilities to extend the business. While each incremental innovation has the potential to become disruptive, the critical difference being, it manifests, not based on firm's decision, but only when the ecosystem necessitates them.
How do you start innovating incrementally? Simple. Start with what you have. What's intrinsic to your business? Develop relationships around it. As you become more, you offer more.
I was delighted to hear what Jeff Bezos had to say about Incremental Innovation recently, “Ninety-plus percent of the innovation at Amazon is incremental.”
Have you ever wondered how pollination happens in nature?
You have no clue where the bee will come from, which flower will it sit, out of that where the honey will go, which fruit will be created. Wait, Did I just share how innovation manifests in the networked world?