Sunday, June 9, 2013

What is Innovation?

In last week's article, we covered four major advances in how people perform changes. The first three have been around in various forms for thousands of years: the Making itself, Tested for quality and variance, Controlled to coordinate people and resources. Modern project management is only about a century old, and can in many ways be traced to the building of the Panama Canal. The latest advance in our approach to making changes is Business Analysis. This discipline has appeared in a myriad of forms, ranging from enterprise architectural disciplines, to design thinking, to the community-driven standards that International Institute of Business Analysis® (IIBA) manages and sustains.

Being part of the latest - and perhaps even the greatest - transformation of change brings me great pleasure. As a Business Analyst, it is also clear to me that "latest" is not the same as "last." Entirely new categories of industry are appearing at an accelerating rate; the complexity of change is increasing; technological advances are not slowing down. "Greatest" is a value judgement that depends on the context, and our context is arguably more dynamic than any time in history, excepting world-wide* catastrophes, such as war, famine, and pestilence.**

Image Source: I-BADD Keynote by Julian Sammy, Head of R&I, IIBA
Business Analysis works as long as the needs are understandable. There are things which we can not know and can not anticipate. What do we do about disruptive, unpredictable change?


In it's most basic form, innovation can be represented as a simple equation:

Innovation ≥ Invention + Delivery

It is not enough to create something new, nor is it enough to deliver something. The combination of invention and delivery is greater than the sum of the parts.

Lightbulbs are the iconic innovation story: Edison innovated, where others invented. He took an invention that had been proven as possible almost 100 years before, and made a practical product. It wasn't just the bulb that was the big deal, either: the whole supply chain for electrical power distribution was rather important too.
In Edison's time, there was time to operationalize an invention. Now new categories of technology appear every few years, as do new business models. These both disrupt older models. In this environment, it isn't enough to see an opportunity in the market, and solve the problem first. Innovation includes the capacity to adapt to environments that don't exist at all, and that may be unimaginable.

Business Analysis breaks when you reach the edges of the imagination; it is after all, an analytical discipline, and uses analytical tools. It is also slow. This is an asset to the profession: taking considered action is almost always more effective than instant reaction.

So what do we do about conditions that are inconceivable? What of reactions have to happen faster than considered thought to have any meaning at all? Can any organization develop the capacity for immediate reactions to unimaginable conditions?

One approach to this situation is found throughout nature: plant a huge set of seeds, each with different characteristics. Some will excel in local conditions; some will not. The seeds that are pre-adapted to the conditions that exist when they germinate are the ones that survive.

This is an important idea: the seeds that grow are adapted to conditions that do not exist when the seeds are planted, because they lie in the future. When the seed starts to grow, the conditions may match the seed's ideal conditions, or the conditions may kill it.

One characteristic of modern innovation is the capacity to plant seeds that can grow (and be profitable) in conditions that are unimaginable today. In business, this means a persistant, deep-seated corporate culture that demands many small changes be attempted. These small proofs of concept will have a high failure rate, but should be examined carefully (something that BAs can do, and do well). Figure out what conditions would have made that seed a success, and bank it just in case those conditions come to pass.

Another characteristic of modern innovation is the capacity to nurture the seeds that are growing, while avoiding the sunk cost fallacy. This is a very hard problem, particularly because it requires a culture that values the past while relentlessly discarding it. Google and Apple are at the forefront of this behaviour today.

Next Steps

In the next few weeks we'll look at several key ideas that play into this modern concept of innovation. This will include delving into the way that operational disciplines have developed over time: practices like specialized people, assembly lines, and just-in-time supply chains have changed the world. We will also explore some trends that are rooted deeply in fundamentals of human nature and span thousands of years: increasing complexity of change practices is one; automation is another. A propeller-head post on the nature of change will also be coming - though that one involves set theory and weird mathematical notation, so I may post it as a separate series.


* Historically relevant and broad uses of 'world-wide'.
** Often provoked by climate change or ecological collapse.
*** I suspect there is another set of disruptive transformations occuring in these practices as well.

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