Sunday, 14 June 2009

Focus shift in Innovation: from Technology to Business Model towards Value Networks

For many of us, Innovation is still related to New Technology (Research and Development). From the global Laboratories the new technology race is heating up: Nano-thechnology, BIO-technology and several non existing technology combinations will bring huge future applications. Interesting surveys shows us that in past history economic crunch, large (global) wars will boost new technology. We can expect R&D spending will rise in the coming years looking for breakthrough innovation protected by Intellectual property (IP). New innovation methodologies like TRIZ will be used more. Only the large global companies will be able to raise significant R&D organizations and budget what is needed to sustain. In technology driven innovation, focus will be on R&D effectiveness: more innovation with spending less money and speeding up the time-to-market. That means hardness on non performing innovation projects, attract and retain top scientists and a rate race for start-up companies with state of the art technology.

But new technology is not enough in the world of successful breakthrough Innovation. Starting with new ideas like the Blue Ocean Strategy, Co-creation and Open Innovation companies are shifting focus from creating new technology to creating more money using different Business Models. Business Model Innovation is changing the way companies will earn money: different ways to create value than they are used to. It’s no longer true that breakthrough technology automatically means that the revenues will boost and the competition is beaded. Significant change in earning can be reached to shift your role and contribution in the value chain (for example low cost carriers in the airline industry and the new Apple concept). So know the focus will be on getting connected and innovate with the consumer (LEGO), co-create with partners and suppliers (P&G), intertwine existing value chains to new ones (Cirque du Soleil). It’s all about making more money with less investments and making the shareholders more happy. Therefore you need to integrate the ‘Golden Triangle’ of R&D, Operations and Marketing & Sales in the company and integrate Value Chains. New Innovation Strategy Implementation methods and Toolkits are needed. This way of Innovation is still a result of the last period of our Neo-Capitalism: create value for a happy few and outperform the enemies in the ‘free’-market.

A New Generation of people has started a much more sophisticated strategy for Innovation: creating new value with the crowd and accessible for everyone. The way they do it is building Value Networks. A Value Network is based on different core-values like: Authenticity, Experimentation, Mastery, and Connectedness. They are using new set of tools to get connected (like social networks), contribute on their own core competences (and getting status for) instead of what the boss is telling them to do, demanding a fair pricing and transparency of governance.

The success of innovation is based on much more variables than only money, it will be based on the volume of people and next generations who benefits from this innovation. The success will be visible in the term: Reputation. And reputation is a gift of members, connectors and users. Reputation is non-negotiable and will be endorse continuously. They will choose their own leaders and are flexible in the accept different role over time. The speed of creating , executing and the use of innovations will be incredible.

The great thing about a Value Network is that is exist and lives on a global level. Even currently closed global regions will be breaking open and joining up. National Governance and large and global companies will be bypassed in light-speed. This is what I will call a real breakthrough Innovation and it will benefits all who joins the Value Networks.