At “SInX”, we are not alone but are one of the first in using “Disparate Innovation” for achieving “Rapid Creation and Expansion of self sustaining and self expanding revenue streams” across “Sectors that Matter” and across local, regional and international demarcations.

At “SInX”, we are not alone but are one of the first in using “Disparate Innovation” for achieving “Rapid Creation and Expansion of self sustaining and self expanding revenue streams” across “Sectors that Matter” and across local, regional and international demarcations.

Below is a Report from the field:

News Item from: http://www.businessinnovationfactory.com/weblog/archives/2008/04/report_from_the_field.htm

 

Designing Networks for Innovation… … …

A study last year conducted by the Center for Creative Leadership found that nearly 92 percent of the executives surveyed believe the challenges their organizations face are more complex than they were just five years ago. How do you innovate within such a dynamic, unstable and unpredictable environment? “Innovate together,” says BIF research advisor and UC-Davis professor Andrew Hargadon.

Hargadon, who is also the author of the bestselling How Breakthroughs Happen, was in the house last week for a half-day workshop called Leading with Vision: The Design of New Ventures.

It’s no surprise that a popular response to increasing complexity is to lean on innovation. And while companies look to create the next big product or service, Hargadon spent the morning talking about how the networks that support the business are just as important as the products themselves. In fact, says Hargadon, if you don’t spend as much time cultivating the network as you do creating the product or service, failure is your likely outcome. “We’re all designers,” he said.

Moving through historical and modern examples, Hargadon showed us that economic growth through innovation can be found when you carefully and creatively ferret out current capabilities within disparate systems and then bring them together to form new networks of innovation.

Networks of Networks: The Real Value of Innovation:

From the perspective of complexity theory, effective network leadership is about learning to capitalize on interactive dynamics among and within a variety of organizations. In layman’s terms, what does it take to prototype a business around a network?

Here are two big ideas Hargadon shared to help you design your next big venture:

1. Building a better mousetrap isn’t enough (and it never was)

At the U.S. Patent Office there are 4,400 patents for a mousetrap. Twenty-four of those patents made money. And only 2 made it to become dominant designs – the Victor Smart Trap from 1899 and the Sticky Trap from the 1980s. “Emerson had it wrong,” said Hargadon. “Build a better mousetrap and the world will not beat a path to your door.” (According to Hargadon, Emerson didn’t actually say those words – although many think he did – but you get the gist.)

Many of the impacts we see today are in reality, the result of a community or network that ran with the initial idea or invention. For instance the light bulb was 40 years old by the time Edison started marketing his version. The steam engine was over 100 years old before James Watt found the investors, distribution channels, and manufacturing partners to bring it to the mass market. For both, it wasn’t the product that made them successful, it was the networks they built around the product.

As Hargadon aptly points out in his book: “A better mousetrap, like anything else, will succeed only when those who envision the idea convince others to join in their new venture – as investors, suppliers, employees, retailers, customers and even competitors.”

2. Innovation is about connecting, not inventing.

Depending on your affinity, this can be a difficult pill to swallow. Hargadon offered a great Kurt Vonnegut quote that reflects the dichotomic nature of creating and selling:

“If it weren’t for the people, the god-damn people” said Finnerty, “always getting tangled up in the machinery. If it weren’t for them, the world would be an engineer’s paradise.” Kurt Vonnegut, Player Piano (1952:59)

Chances are, if you have an idea and have brought it to fruition; five other people have done the exact same thing. (Look no further than the U.S. Patent Office for proof of this theory.) So how do you differentiate yourself? Hargadon says the key is to build a better network around your idea than the next guy. Ask yourself, what is it about your network that’s so special?

At the turn of the 20th century, the automobile industry was just emerging. There were 57 firms focused on building cars in the United States. In 1907, Henry Ford had 1,599 Model T’s on the road. By 1914, that number rose to 264,972. This astounding growth can be attributed to only one thing: the marketing and distribution networks Ford designed around his automobile. In retrospect, it had nothing to do with the car (or mousetrap) itself.

Ford began by building a network based on what was already out in the marketplace; he combined proven systems from disparate industries for immediate gains. For instance, his assembly-line originated with the meat-packaging industry; the idea for interchangeable parts originated with a gentleman by the name of Walt Flanders who had worked with Singer Manufacturing, the maker of Singer sewing machines and an early pioneer of interchangeable parts. Even breweries lent a hand in developing Ford’s conveyor systems. And his distribution network? Ford tapped bike shops. By 1907, he had signed up 15,000 people to sell his car.

Henry Ford’s explanation for his success: “I invented nothing new. I simply assembled into a car the discoveries of other men behind whom were centuries of work…Had I worked fifty or ten or even five years before, I would have failed. So it is with every new thing. Progress happens when all the factors that make for it are ready, and then it is inevitable. To teach that a comparatively few men are responsible for the greatest forward steps of mankind is the worst sort of nonsense.”

Next Steps: What Can You Do to Build a Better Network?

Juggernauts of systems building like Ford or Watts had gumption to spare. It’s important when designing a network, that the value your gumption generates touches every other member of the network too. It’s critical that you define for each member how your new network will enhance (or disrupt!) their operating model. Network builders think empathetically – they understand the needs of each of their partners.

A modern example that epitomizes the value of network design is Apple. Through the iPod, Apple changed the way we buy, share and listen to music. They didn’t do it alone and in actuality, there was very little inventing going on within the walls of Apple. In order to create this new business model, the company collaborated with hardware and software vendors, record labels and artists to compete in a way that so far, no one has been able to touch.

Network innovations, according to Hargadon, connect rather than create value. Whether you offer a product or a service, you need to ask yourself what value you create within the value chain.

1. Get the right people on the bus and think outside your current knowledge base.

This means tapping into silos outside the organization and looking for skill sets beyond what you currently have. Look beyond functional skill sets like finance or engineering and move away from reductionist perspectives that hinder holistic systems thinking.

2. Think analogously.

It’s not easy to untangle existing capabilities from contexts other than your own and then put them together in new ways. To do that, you need to focus attention and energy on how things are the same. Which means don’t automatically dismiss an idea that works somewhere else because it’s a different industry or a different customer or a different material. “The best ideas won’t come looking like they’re just right,” says Hargadon.

3. Embrace the discomfort zone.

Sitting between worlds can be a disarming place especially when you find yourself consistently on a steep learning curve. Yet that’s precisely the place you want to live in. To be a coalition builder means accepting that you’re not going to be as smart in one network as you are in another. Yet Hargadon says “the benefit of this discomfort lies in freedom from the binding (and blinding) ties of any one small world.”

4. Design the venture as a network not a product.

This in turn will provide linkages to emergent systems and allow you turn complexity into a competitive advantage. At the end of the day, network innovation isn’t about moving into places you know little about. Instead says Hargadon, “it’s about finding worlds you know little about but where your own knowledge looks valuable too.”

Our thanks go out to Andrew Hargadon for a most enjoyable and thought-provoking workshop.