How do we Disrupt, Transform and Innovate in 2017?
This article is my journey to find some of these answers, more importantly understanding the real question. In looking at these questions in respect to the how, I have been reviewing and reading any books I can find on these topics. I have been looking to get a better understanding and grasp of the words and what it is they mean. Next, I wanted to understand the how, so that I could apply them within the way I work. This whole exercise was all about looking for the right question, challenging the way I thought about the topic and finding some solid answers. This article is my journey and what I have discovered to date. I find in writing about what I have learnt, I can better internalise the lessons that I have learnt.
Please join me on this journey as I feel I have many books and conversations to travel. This article is the results that I have found to date. I find in writing about these lessons I am better able to internalise and apply this knowledge and practices within my job and role within the organisation.
A quick search across the Internet will find many different interpretations to this questions.
- Disruption is a disturbance or problems which interrupt an event, activity or process.
- Transformation is a process or profound and radial change that orients an organisation in a new direction, taking it to an entirely different level of effectiveness, and
- Innovation is deliberate application of information, imagination and initiative in deriving greater or different values by which new ideas are converted into useful products.
These three words have been used as the so called latest "buzzwords" for some time. It is something we all need to do, have done or be doing, be it digital, business or process. We are expected to understand exactly what these words mean within our organisations, having been added to our everyday lexicon of language. The problem, is there is no real explanation as to how or exactly what it means. We're supposed to understand, so to ask questions would just point out our lack of knowledge.
For someone who has been involved in the technology space since the 1970s, I have seen much in the way of transformation, disruption and innovation. In the future, I dare say we will all see far more growth, change, and innovation than ever before. Change is inevitable, so is transformation, disruption and innovation. So, what is disruption, transformation and innovation in context to what we do in our organisations? What is Disruption?
Two books that have had a large impact to my thinking about transformational change and disruption have been The Innovator's Dilemma, by Clayton Christensen, and Blue Ocean Strategy by W Chan Kim and Renee Mauborgne. Each of these books approach disruption and innovation together in different but similar ways. In many respects, Clayton Christensen coined the combination of "disruptive innovation" in The Innovator's Dilemma. I feel his description and the use has been distorted in many respects, but for me provided a real understanding of the topic of disruptive innovation. As Christensen mentioned in The Innovator's Dilemma, a disruptive innovation is an innovation that creates a new market and value network, eventually disrupting an existing market and value network. Displacing established market leading firms, products and alliances. Similarly, Kim and Mauborgne refer to a Blue Ocean Strategy as the creation by a company of a new, uncontested market space that makes competitors irrelevant. Creating new consumer value often while decreasing costs.
In Christensen's book, he uses the transformation of the steel industry, from processing ore to production of product in a single plant to mini mills. Taking the reader on a journey of how a long time established industry and process was completely disrupted through disruptive innovation. In the case of Kim and Mauborgne they use Cirque du Soleil as their example. Cirque du Soleil took the world by storm, by creating its blue ocean market space in less than twenty years. Since its creation as street performers, Cirque du Soleil has achieved a level of revenues that took Ringling Bros. and Barnum & Bailey more than one hundred years to attain. Both circuses were once global champions of the circus industry.
As per the Blue Ocean Strategy they addressed an uncontested market space that made their circus competitors irrelevant. Using the lens of disruptive innovation, you could say they created a new market and value network, eventually disrupting an existing market and value network. They displaced an established market leader, an as did the mini mills did to the steel industry changed it forever.
In both these studies and examples they transformed their environments and businesses, were disruptive to the current incumbents and were quite innovative in many ways. In disruptive innovation, it’s all about perceived value and what is important, meeting needs, learning and improving. Initially not being perceived as competition, exiting markets releasing unprofitable sections of their domain to be taken up by these up starts. Over time that increase is exponential, Uber being a perfect example. Uber commenced in 2010, but it wasn't until 2015/16 that it became an issue here in Australia. From a Blue Ocean Strategy perspective, they provided a service that was not being addressed by the taxi industry. These were people who did not use taxis, they were non-customers of the industry. But over time the standard and quality improved. Service and value increased and costs were reduced, bit by bit they were directly competing with the industry. But Uber does not compete with the taxi industry, Uber is a platform or gateway of services, bringing customers and suppliers together and taking a percentage of the cost of service or what is referred to as a clip of the ticket. The taxi industry is highly-regulated, it felt that Uber had suddenly appeared out of nowhere, when in fact they had been around for some four to five years. It caught both the taxi industry and government out, both struggled with trying to stop something that has completely changed the rule book.
Uber has a totally different business model; industry and government still using the old playbook of business. Their approach has been that of defensive and attacking, but who do they go for? Uber, itself is not a taxi service, but a service within its own right. It provided a platform connecting the customer to the supplier. Government and the industry needed to re-think their strategy and be innovative in their approach, but to date we have only seen traditional responses based on practices of the past. So how then do we create new disruptive, transformational and innovative ideas? How do we move forward?
These topics raise several questions as to what exactly can we do? More importantly, how can we accomplish results that reflect disruption, transformation and innovation that is required to deliver better value and services to our customers? Who is doing this and how are they doing it?
Over time I continually consider these and many other similar questions. Working to understand how I can apply them for myself, the work that I do as well as assisting others in their goals or aspirations.
Recently I have been working through several new books, and some older repeats. One of those books has been Change by Design, written by Tim Brown of IDEO. I was exposed to this thinking back in 2012 on my Churchill research scholarship. In my travels, I met with several companies and organisations around the world applying the practices of design thinking. They used these practices, to build better services and products to their customers. Recently in Boston at the end of 2016, I attended an Open Innovation Summit for two days. During that conference, I met and heard from several companies who were carrying out some innovative projects. More interestingly, was their application of design thinking in how they developed and delivered those projects. This journey has led me to read more literature on the topics of innovation, design thinking and the application of those practices.
One of the books that I read was The Big Switch: Rewiring the world, from Edison to Googleby Nicholas Carr.The recurring theme was nothing was new, it just took a different format. Nicholas started his book by telling the story about Burden’s Wheel in 1851. In a field in upstate New York, Henry Burden built a magnificent machine, it looked like a giant bicycle wheel except the spokes were of thick cast iron. Being fed by water diverted from a local river, it was the largest waterwheel anywhere. Weighing over 250 tons and just over 60 feet high, it produced 500 horsepower. The waterwheel was the powerhouse of industry in the 1850's.
The book continues through history, with the story of Thomas Edison in the 1870s and electricity. From water wheels, to generators to running their own electrical network to buying from the utility. It went far beyond cheaper kilowatts. As companies, if they did not need to purchase pricey equipment, they could reduce their fixed or capital costs, thus freeing that capital for more productive investments. Other corporate costs, staff and risk was reduced. As companies no longer needed to own the technology, obsolescence and malfunction were not a major distraction. Once unimaginable, broad adoption of utility power had become inevitable. Now come forward about 140+ years and the exact situation is happening with computer technology. Utilisation of electricity in the US in 1907 was 40 percent, in a matter of 20+ years that well exceeded 90 percent. That same model is repeating itself in the cloud computing space but I suspect that it will be faster than 20 years. Throughout his book, he provokes many questions and realisations in this constant changing digital world. Many of the books I have read have built on ideas, but until they become self-propagating things don't change. It's what Richard Dawkins, famously called a “meme”. That is the self-propagating idea that changes behaviour, perceptions, or attitudes. Centralised and top-down authorities are no longer sufficient to generate transformational or innovative ideas. In another age, say the industrial age, this worked as production relied on labour. Consistent and repeatable levels of work to deliver an outcome. The biggest problem today is many organisations either don't realise or have not truly understood that we are now well and truly in a knowledge economy. That is an economy in which growth is dependent on the quantity, quality and accessibility of the information available, rather than the means of production. That we have moved on from change to disruption, transformation and innovation. All these depend on the knowledge economy. But, in this age of the knowledge economy, ideas need to be diffused on their own, especially around business and technology. If we are unable to communicate these ideas to our employees or customers about what we are trying to do, they will not be able to help us to get there.
Tim Brown in Change by Design indicates that we need new choices. A purely technocentric view of innovation is less sustainable now than ever. The other trap we face is using management philosophies based only on existing strategies. This is likely to be overwhelmed by new developments at home and abroad. We need new choices and products that balance the needs of individuals and society.
We need an approach to innovation that is powerful, effective and accessible, that can be integrated into all aspects of business and society. It needs to enable both the individuals and teams to generate breakthrough ideas that can be implemented. Design thinking, I believe, offers such an approach. What is the Right Question?
When commencing my Churchill Fellowship research project in 2011, I had no idea where to start let alone the what or how. When I enquired as to how I should proceed with my research, a fellow of the Churchill Memorial Trust asked me a simple question, “What was the answer I was looking for?” At which point I responded by saying, “Was that not the reason for my research?” The answer I received both challenged and made me question my whole perspective of research. It wasn’t until several years later after reading A More Beautiful Question by Warren Berger that I fully appreciated the purpose of that question and the process of finding the right question. This came up in several areas of research while I have been reading. Especially in connection to innovation.
In the first section of Warren's book “Why Questioning?” he found that world leading inventors and creative minds used questioning to approach their challenges. It was their innate ability to ask questions, that was one of the key factors that led to their success. it was their ability to open a topic to scrutiny, focusing with the use of both open, and closed questions. They gained an understanding of the real issues, and nub of their problem. Warren has found that many business people are aware, on some level of the impact between questioning and innovation. He realised that many great products, companies and industries often begin with a question. On further investigation, he discovered that few companies encouraged questioning in any substantive way. There is a considerable lack of training, guidelines or best practices around the area of questioning. What he did find was that many organisations either consciously or not, discourage inquiry. What brought it home to me, was Google’s chairman Eric Schidt's description of its company was that it “runs on questions”. Many people I speak to think the opposite, that Google provides the answers. Importantly, without the right question all the answers in the world are worthless.
In his book, Warren takes the reader through several examples as well as explaining techniques in how to question, digging down to find the real issues to be addressed. How Does An Organisation Transform?
It has been referred to as the new change, but its more than that. I believe it is the realignment of people, processes and technology but at a more fundamental level. It’s the re-imagining of how we realign, and it is more than continually using our knowledge of the past. It’s about questioning and challenging those practices, realising things have changed. Maybe there is a better way forward, but until we check and confirm we will never know. Many organisations claim to have made a transformational change, but when you look closer nothing really has changed, other than the logo and colour scheme. Today that means, using new words that describe the old ways in a more upbeat tone. The other term for several years that got bandied around was that we are a learning organisation.
This was a phrase that Peter Senge used in his book The Fifth Discipline. The ideas and tools that he presents are for destroying the illusion that the world is created of separate and unrelated forces. From this position, we can build a learning organisation. This is an organisation that is made up of people who continually expand their capacity and knowledge. It is where new and expansive patterns of thinking are nurtured, aspirations are set free, and people continually learn together. These organisations can learn faster than their competitors said Arie De Geus, head of planning for Royal Dutch/Shell. It is no longer the realm of a person or section within a business. The only way any organisation, especially in 2017 can sustainably grow is for the entire organisation to take that journey.
In the industrial age, it was mandatory that people were thought of as pure labour. We still carry a lot of those thoughts and ideas. Our employees, at times referred to as the labour force are the foundation to our brain trust. Yet our education system is still largely based around the concepts derived from the industrial age. The product is to produce a standard model of employee who can read, write and carryout arithmetic, being certified by academic qualifications that defined a based standard and model. The idea being to produce a basic unit of labour that with limited training could become another wheel in the cog. This was designed to produce a resource to deliver an expected outcome, thinking was not a requirement and in many ways, was a liability for standardisation. In today’s businesses, this has changed in many ways, but our current mental models are still of the past. I believe it is one of our major challenges in embracing new ideas and becoming innovative.
Peter Senge discusses his ideas and tools that enable the “How” a business can achieve this, using what he refers to as the five disciplines, the fifth being system thinking. These disciplines have been developed over more than 50 years and Peter Senge’s work is an encapsulation of those ideas. They are:
- System Thinking is a conceptual framework, a body of knowledge and tools that has been developed over this time. Enabling people to make the full patterns clearer, helping us to see how to change them effectively.
- Personal Mastery, this is the discipline of continually clarifying and deepening our personal vision. Focusing our energies, developing patience to seeing reality objectively. It is essentially a cornerstone of the learning organisation. It is the connections between people, organisational learning and the commitments between individuals and the organisation.
- Mental Models, these are deeply ingrained assumptions, generalisations or images that influence how we understand the world and how we act. It is about turning the mirror inwards; learning to unearth our internal pictures of the world. Bringing them to the surface and hold them rigorously to scrutiny. It’s about balancing inquiry and advocacy, where people expose their own thinking effectively, making that thinking open to the influence of others.
- Building Share Vision - If anyone idea about leadership has inspired organisations, it’s the capacity to hold a shared vision of the future we seek to create. Who could ever forget or not know of John F. Kennedy’s vision he created for the United States, when he said those immortal words: “This nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth.” Or that of Martin Luther King’s words: “I have a dream…”. We may or may not be old enough to remember but we all would have heard these speeches, two of the most well-known shared visions.
- Team Learning is when teams are truly learning. Not only are they producing extraordinary results, but individual members are growing more rapidly than could have occurred otherwise.
This can only start with “dialogue,” the capacity of team members to suspend their assumptions and genuinely “thinking together”. It is different from “discussion”, its roots being around “percussion” and “concussion.” Discussion is literally a heaving of ideas, back and forth in a winner takes all competition. Dialogue is about learning how to recognise the patterns of interaction in teams that undermine learning. These patterns are often defensiveness in nature and deeply engrained in members. Team learning is the fundamental learning unit in our modern organisations. If teams don’t learn, then organisations will not learn. System thinking on its own will not succeed, it requires all disciplines of building shared vision, mental models, team learning and personal mastery. To truly get the value out of these five disciplines there needs to be a shift in mind or metanoia. To grasp the meaning of “metanoia” is to grasp the deeper meaning of “learning,” for learning involves a fundamental shift or movement of mind.
The problem when talking about “learning organisations” is that the “learning” has lost its central meaning in contemporary usage. Most people’s eyes glaze over if you talk to them about “learning” or “learning organisation.” Little wonder for in everyday use, learning has come to be synonymous with “taking in information.”
It would be crazy to say, “I just read a great book about driving a car; I’ve now learnt that.” We need to be doing adaptive learning, this must be joined by generative learning, that is learning that enhances our capacity to create. Peter Senge takes no credit for inventing the five major disciplines as they represent, experimentation, research, writing and invention of hundreds of people. In the 1970s when Peter Senge joined the graduate school at MIT (Massachusetts Institute of Technology), he realised the problem facing our ever-increasing and complex world was our ability to understand these complex systems. Working with a foundation of knowledge, experiments and research Peter developed his ideas around the five disciplines as described in his book. What is Innovation?
How have innovators found opportunities that others miss? How do they come up with these incredible ideas that fundamentally changed the way we do things? How do we enable people to have those brilliant flashes of inspiration leading us to our next great invention? Innovation is the lifeblood of our global economy, becoming the priority of every organisation. It is the number-one leadership competency of the future. How has it been done? Who is doing it, and how can we join in? And where do we start?
Jeff Dyer and Hal Gregersen in their book The Innovator’s DNA, emerged from an eight-year collaborative study. The the book sought to understand innovators, who they were and the companies they created. Their primary purpose was to uncover the origins of innovation and disruptive business ideas. After interviewing hundreds of inventors and creators of revolutionary products and services, as well as game-changing companies. They dug into the thinking of the innovators themselves, wanting to understand as much about the people, the when and how they came up with their creative ideas. They wanted to understand how these people generated their ideas. What they found was provocative and insightful as well as surprisingly similar.
In that time, they discovered five primary skills that composed what they called the innovator’s DNA. What they found was that innovators “Think Different,” a well-known Apple slogan. It was the ability to recombined ideas and things into new opportunities. One of their critical insights was generating innovative ideas is not merely a function of the mind, but also a function of behaviours. If we change our behaviours, then we can potentially improve our creative impact to our organisations.
One of the most famous innovators of our times is Steve Jobs. To him, innovators don’t just accept the world as it is. They are driven to reshape it into the way they believe it should be. They imagine, explore, create and inspire. They push the envelope, crack a few eggs. More importantly, they don’t accept the idea that it can’t be done, in fact when they are confronted by these statements and obstacles they push harder. As in Steve’s famous crazy speech, “because the people who are crazy enough to think they can change the world, are the ones who do.” Innovators actively desire to change the status quo.
What Jeff and Hal found was the ability of innovators was focused around five distinctive skills. These being:
- Associating, the ability to make surprising connections across areas of knowledge and industries. They build on ideas like blocks of Lego, building and taking apart until they find exactly what they are looking for.
- Questioning, is about asking the why and what if. Again, experimenting with ideas and alternatives.
- Observing, constantly looking and studying their environment and the people around them. Seeing how things work and don’t work, then finding alternatives through trial and error.
- Networking, the ability to network and explore ideas among a wide and varied association of people and ideas. Going out of their way to meet people with different backgrounds and perspectives to extend their own knowledge. and
- Experimenting, one of the best exponents of this, and has been quoted many times before is Thomas Edison. “I haven’t failed, I’ve just found 10,000 ways that do not work.” This is a constant in all the skill areas. Everything is tested and experimented on.
One of the latest books I have been working through is The Four Lenses of Innovation. Rowan Gibson has written a powerful book about and around innovation and how to practically go about creating such an environment. Rowen uses the concept of four lenses, that of Challenging Orthodoxies, Harnessing Trends, Leveraging Resources and Understanding Needs. The part I found most interesting was the first part of the book was that he used these four lenses to review our most innovative time in history, the Renaissance period.
We think of innovation being something of the later part of the 20th century, when in fact there were three periods. Medieval renaissance in the 12th Century, this was a period of many changes. It included social, political and economic transformation and an intellectual revitalisation of Western Europe with strong philosophical and scientific roots. Then came the Italian Renaissance or Middle Ages in the 15th Century followed by the scientific developments of the 17th Century. The Renaissance was a time where we were introduced to a completely new way of looking at the world around us. But these were dangerous times as expressing ideas that challenged the dogmas, authority or tradition of the papacy were threatened, punished or completely done away with as a heretic.
Using this period of our history, Rowan reviews the mind of the innovator showing how they utilised these four lenses of innovation. The four lenses are:
- Challenging Orthodoxies is about challenging deeply entrenched beliefs that have long been taken for granted,
- Harnessing Trends is building on some deep discontinuity, convergence of systemic cluster of trends that has the potential to create dramatic change or disruption,
- Leveraging Resources is the ability of innovators to see themselves and the world around them as a collection of skills and assets that can be recombined or stretched into new opportunities, and
- Understanding Needs is an insatiable curiosity for the world around them, and their unshakeable belief that they could make the world an increasingly better place, or as Steve Jobs would say "Put a dent in the universe".
Summary Throughout these and many other books I have been reading, similar themes and concepts have been presented. The most profound idea I have come across is based around one of the many quotes attributed to Einstein. That, “you cannot fix the problems of the past with the same thought processes that created them.” We need new choices that balance the needs of the individuals and society, strategies that result in different results for everyone. To do this, we need to accept a new approach. What worked in the past needs to stay there, in the past. As with each of these topics of disruption, transformation and innovation we need to re-assess how we approach them. We need to challenge, question but more importantly find the real question we are trying to answer. There must be true dialogue, we must enter conversations without any preconceived ideas. Everything must be laid in the open for scrutiny, it’s not about defending a position but delivering an outcome. As indicated by Peter Senge in his book The Fifth Discipline, if teams don’t learn then organisations will not learn.
The other point is that to fail is not failure, it only becomes failure when we don’t learn from the experience and move forward. The other point is that if we don’t fail now and again then we are not really trying hard enough. Of all the innovators over time we forget the amount of times they failed before they became successful, success is not done overnight, it is the culmination of many trials, errors and tribulations, it is the persistence that leads to success.
We all need to run to our own drum beat, all innovators, entrepreneurs and successful people and businesses usually got there by following their vision. What becomes very powerful is when that personal vision becomes a shared vision. It’s our ability to enable and allow the individuals to be creative, discovering their visions, to realise that we are not the only person in this universe and we don’t have all the answers, but collectively and working together we can be so much more. Our only limitation is ourselves and our imagination.