Entries in innovation (20)


Social innovation traps

A recent piece in the Stanford Social Innovation Review identifies eight so-called innovation traps that prevent an organization's best intentions of developing cutting edge solutions to social challenges from being fully realized. We found it interesting that while some of the traps are related to execution and implementation, others are more conceptual, meaning that culture is the barrier that forestalls change.

The SSIR lists the eight traps as the following:

  1. Underestimating what it takes: Funders miscalculate how long innovation takes and the scale of investment required to create real transformation, not realizing innovation is rarely a quick, short-term investment;
  2. Misaligned incentives: Despite a company's desire for innovation, staff are discouraged from taking the sorts of risk necessary for fear of failure;
  3. Coming to consensus: Another risk aversion trap whereby the need for consensus often leads to funding for only the clearest, safest, or lowest-common-denominator ideas, leaving truly radical projects untried;
  4. Who's responsible for innovation: Setting up teams of innovators is a double-edged sword as members with other duties may find new idea formulation difficult, while establishing dedicated innovators could lead to a balkanization of staff;
  5. Just around the curve: Not knowing the difference between a wrong turn and a dead end, which could lead to funding going to unproductive efforts rather than a project which should be nurtured;
  6. Everything is innovative: Funders need to define their goals based on characteristics such as how transformational, original, unconventional, or disruptive an idea may be and be ruthless in their assessment of whether something is truly innovative;
  7. We fund innovation, so we must be innovative: Traditional funding methods can be used to fund innovation, while more forward-thinking avenues like crowd funding can be employed to fund conventional activities. However it's done, funders have to determine if they're looking for innovation in the field or in their processes; and
  8. Innovation is the holy grail: Discovering an innovation doesn't end the search for solutions to complex issues, while the process looks beyond the breakthroughs themselves to new insights, and networks of problem solvers that develop new technologies or strategies unforeseen by the organization.

Understanding the pitfalls facing social innovators in the public, private, and nonprofit sectors should help foster better trials and greater progress.  What do you think?


Hybrid value chain and social impact in developed economies

Poverty and economic inequality are global challenges that have an impact on even the most developed economies, as we noted in a post earlier this year. I recently had the pleasure to participate on a panel with an experienced entrepreneur and value chain expert who is involved with i-propeller open innovation -- an initiative to create a platform to allow businesses to address some of the challenges of poverty in Belgium.

Just over 15% of Belgians live in poverty, which affects their material and social wellbeing as well as their health. The i-propeller Business & Poverty platform seeks to use structural and innovative power of business to develop meaningful and scalable solutions. Businesses will, at the same time, be able to gear up their organizations for the future, with innovative solutions and market approaches.

This is an example of a hybrid value chain approach: a process of collaborative entrepreneurship designed to combine the power of innovation and entrepreneurship of the business and citizen sectors. HVCs are partnerships that include social outcomes, but are rooted in a market-oriented for-profit approach. Businesses offer scale and expertise in operations & finance. Social entrepreneurs and their organizations offer lower costs, strong social networks, and a deeper understanding of customers and communities.

We have used this approach in some of our own efforts to test new business models, and look forward to learning of other cases where they have been deployed, or are in the process of being deployed.

Image source: i-propeller

-- Clara Shen


Africa's new relationship to innovation

I enjoyed this recent piece in the Economist that looks at technology in Africa.

Technology deployment and innovation in Africa was for a long time based on "hand me downs" from the Western developed world, but the paradigm for innovation across the continent is evolving. Today a host of technologies are being deployed, tested, and developed in Africa -- even before they are implemented elsewhere.

Examples of this include mobile payments, solutions for broader and more efficient wifi, and drone-based air cargo services. These initiatives are based on serving African requirements -- such as supplying food or medicine to remote communities or refugee populations -- but they have broader potential.

What is responsible for this changing relationship to innovation and technology? The authors point to a "peculiar confluence of economic and political circumstances." Lighter regulation and weak governance means that engineers can try things on the continent that are either prohibited or prohibitively bureaucratic elsewhere. The shortfall of traditional infrastructure such as roads or landlines means that new technologies or business models have a more open playing field.

Business investment is also growing, and the article ends with the hopeful prospect that Africa will become the source of new solutions for the challenges it's facing.

Image source: The Economist

-- Clara Shen



Less secrecy + more collaboration = the key to innovation?

Accenture's Global Electronics and High Tech Industry Lead, Sami Luukkonen, understands why businesses want to keep information about their products proprietary. However, in a recent HBR piece he argues that in an age of digitalization and the Internet of Things, intelligent products, by their very nature, require integration and collaboration. As well, the next "big thing" could come from any myriad of sources, so companies that volunteer some product data (pipeline products, features, functionality) and customer analytics to the ecosystem are more poised to be innovative.

Beyond the high tech industry, executives in other sectors need to understand that there remains only a few stand-alone technologies: products are ecosystem-based rather than individual devices, and Luukkonen cites the example of sensors and integrated software in oil pipelines that provides information about location of leaks, severity of leaks and possible environmental impacts.

Finally, he adds that a collaborative strategy, in which companies make strategic decisions about which of their partners they open up to completely and which they have to take a selective approach with, provides greater benefits through co-innovation.

What do you think?

Image source: Harvard Business Review


Inclusive business & managing unintended consequences

This month Tufts' Fletcher School hosted a two-day conference, Inclusion Inc., to test the idea that “the only competitive business is an inclusive business.” In this summary written by the senior associate dean of the school, Bhaskar Chakravorti, we learn that inclusive business models and strategies can have unintended consequences. According to Chakravorti, these include:

  • Pressures of public market expectations: The first unintended consequence of inclusive business has its origins in an organizational contradiction: key stakeholders – shareholders, market analysts, and even line managers whose compensation is tied to quarterly targets and stock performance – may not support a corporate decision to be inclusive.
  • Stresses along the supply chain: It is easy to imagine the pressures placed on suppliers as inclusive businesses push into market segments where the margins are thin and volumes are large. The challenge is particularly acute in the emerging markets where value chains are incomplete and the supporting infrastructure and institutions are under-developed.
  • Distortions in production: As an inclusive business creates incentives for local communities to join the value chain, resource are re-prioritized to align with commercial demands.
  • Distortions in consumption: Many of the original critiques of the movement to serve the “bottom of the pyramid” consumer made the observation that the poor will spend their limited budgets on the products that are most successful in reaching them. It begs the question at to whether more readily available products have displaced essentials from the consumption basket.
  • Challenges in scaling-up frugal innovation: Many inclusive businesses get a jumpstart through improvisation and assembling of locally available resources – often described as frugal, MacGyver – after the endlessly inventive 80s TV hero – or, in India, “jugaad” innovation. These innovations capture the imagination, attract media coverage, and, most importantly, attract resources. Unfortunately, the vast majority of such ideas have had difficulty deploying at a large scale.

We appreciate the concluding suggestion that before taking the "pill" of an inclusive business model, "it is advisable to read the label on the side-effects first and manage them before taking the pill and enjoying its many benefits." Certainly, any new ventures will bring some unexpected results and generate lessons to be learned -- but trying to understand the "side effects" in advance should improve the chances for success in the long term.

Image source: Fletcher School of Law and Diplomacy

-- Clara Shen