Home » Archive » The ‘in’ and ‘no’ of innovation management
In innovation management, there are two kinds of people. Those that drive business by innovation and those that drive innovation on behalf of business.
Driving business by innovation means tactical innovations, micro innovations, and need-driven innovations – innovations that create value which, in turn, create business. These are usually undertaken by small business, entrepreneurial corporations and the very rare business-savvy academic.
Driving innovation on behalf of business means economic development, economic diversification, and, regrettably, economic intervention. This is usually undertaken by governments, economic development agencies, and most universities.
For those on the business-side of innovation management, innovation grows from within and means saying “No” to everything but the few bits that create value. For those in economic development, innovation comes from the outside and means saying “Yes” to everything, including a few bits that create value.
This post is written to help those on the outside of business innovation understand what’s needed on the inside.
Leveraging our best
In recent work for Alberta Ingenuity Fund and the Alberta Department of Advanced Education and Technology, we created a 75-indicator set of metrics and indexes to measure Jurisdictional Advantage. It’s a tool that assesses the character of place – the strengths and weaknesses of business and the regions where they exist.
Jurisdictional Advantage assessment also provides a new tool for innovation management. It allows businesses and economic developers to identify gaps in a region’s ability to sustain and leverage innovation. It measures what is inside and what is outside a region’s best.
It’s an essential foundation for asking a higher-level question: Where do we look for innovation? It’s essential because it finally creates some fences in a previously unbounded conversation.
Without Jurisdictional Advantage assessment, anyone that looks for innovation looks everywhere. With this kind of assessment, the question can be highly tailored. Instead of myriad market opportunities, we limit the search to the relative few within a company’s or region’s Jurisdictional Advantage.
Best is on the inside
Schumpeter is famous for arguing that real innovations stem from recombining existing knowledge in new ways. This knowledge is, of course, held inside businesses and institutions. It’s the holders who reach out of and through that knowledge to create new combinations. In this sense innovation is an internally-driven activity.
This idea of internally-driven innovation derives from work by Asheim, Boschma, and Cooke and their use of ‘related variety‘. It’s a term used in evolutionary economics. It suggests that innovation is not driven by diversity or specialization but by related variety – shared and complementary knowledge bases and competencies (Ashiem et al., 2007: 4).
Ashiem et al. argue that innovations occur when knowledge spills from one industry to another (rather than within one industry). And that innovation’s probability of success is greatest when the two industries share common competences.
Tailoring innovation management
Balance is the trick. Though there is an “In” in innovation, it is immediately followed by “No”.
Shredded Wheat is running ads that say they “put the ‘no’ in innovation”. Criticizing ‘progress’ and elevating ‘simplicity’, CEO Frank Druffel writes,
“Progress plays no role at the Post Shredded Wheat Company.
Here, we put the ‘no’ in innovation.
Henry Perky created the Original Shredded Wheat in 1892. One man. (Him.) One ingredient. (Wheat.) One machine. (The machine.)
And although many back then thought the idea of pouring milk over food was foolish, today we see all sorts of chemically enhanced, artificial fiber-infused, carb-refused cereals – a far stretch from simple, honest nourishment.
Post Original Shredded Wheat, on the other hand, hasn’t changed. It is still just one simple, honest ingredient which naturally comes with fiber, vitamins and minerals.”
Post is clever. While scathing ‘progress’, they highlight their own path to innovation. The path of others is ‘yes’; the path for Post is ‘no’.
Where others add, Post tailors. This tailoring is cutting. It takes off more than it adds. It is a rigorous process of saying no.
The ‘in’ and ‘no’ of innovation management
Innovation is a wonderful intention. It’s the foremost ambition of every economic development organization. Governments, municipalities, universities and industry associations ache for it.
But innovation is a practice. It is an act. It is founded within organizations not outside them.
The work of most well-intending support institutions is principally a process of yes – a mad hunt to find something to approve. Innovation, on the other hand, is a process of rigorous decisions to say ‘no’. Or, put another way, to minimize ‘yes’.
Until economic development organizations adopt analytical tools like Jurisdictional Advantage, they will struggle at innovation management. The fences are otherwise too wide.
What would you cut?
Where is your company saying no?
What else, besides Jurisdictional Advantage is needed? What else would you use?
I’d love to hear from you. Comment below or feel free to email.
This conversation got started two weeks ago – we post an early draft for email subscribers. If you want in, subscribe to email notification from the blog.
Keywords: Jurisdictional-Advantage, business-innovation, innovation-management, economic-development
Tags: Innovation, Analytics, Decision-tools, Innovation, Alberta
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