Establishing a culture of innovation: The ten types and faces of innovation

This post is inspired by Tom Kelley’s books: The Art of Innovation and The Ten Faces of Innovation, and then also by a seminar I attended a week ago at Digital Arabia in Dubai. Matt Locsin, from innovation consultancy firm Doblin, talked about the ten types of innovation and then run a workshop on the same topic. The framework presented is based on a discovery from the late nineties, when a large set of more than 2000 successful innovations were analysed to identify patterns for success. The resulting insights are described in the book from Larry Keeley, “Ten Types of Innovation:The Discipline of Building Breakthroughs“. In a nutshell, the resulting framework  provides a structured approach to innovation by taking learnings from largely successful companies and dividing these into ten types of innovations.

From ten types of innovation…

Often when people think of innovation, the first thing that comes to mind is product innovation. The ten types of innovations forces you to think about more than just product innovation, which is referred to as innovations in offerings, it also helps you to think about innovation in the approach and innovations in the experience. Most of us, especially working in high-tech companies, are familiar to the innovations in offering, which are these functionalities and features that make your product unique or platform stick out of the crowd.  So out of the ten innovations only two are focusing on the offering, the product innovation and the system innovation.  Just focusing on this type of innovation is usually not enough to stick out, you need to think about innovations in approach and user experience.

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The innovation in approach, referred to as innovation in configuration, addresses four innovations: innovations in the business model you select, innovations in the way you take the product to the market including ability to leverage on assets of a partner network, innovation in the processes and the innovations in the way you use your own assets, i.e. structural innovations. A good and well know example, that uses a couple of these configuration innovations, is that of Canadian Gold Corp. It is a mining company that a few years ago was struggling with prospecting for gold. The small team of in-house geologists was unable to estimate good enough gold prospects on the GoldCorp property. Rob McEwen, CEO of GoldCorp decided then to publish all of his geological data on the Web and challenged the world to do the prospecting, the challenge was rewarded with a total prize of $575,000.News of the contest spread quickly around the Internet and more than 1,000 virtual prospectors got busy crunching the data. The challenge lead to discovery of 8 million ounces of gold, worth well over $3 billion. The example also shows the power of crowdsourcing.

Similarly experience innovations can lead to great returns. There are four innovations on the user experience side: they relate to innovation in customer engagement, innovation in brand identity, innovations in services and channels.  Starbucks is a well know example of such experience innovation, for them the engagement with the customer is more than just coffee, it is personal. Starbucks has managed in many ways to fill in the role of a “third place”, which is the most important place you willingly go to in-between the other two places which are home and work. It has become “a comfortable social gathering spot, away from home and work, like an extension of the front porch”.

What is interesting is that many of the successful innovations are focusing on more than just offering innovation and are ticking of several innovations in the three categories mentioned above.

…to the ten faces of innovation

So now we understand what type of innovations are important and we have a framework that can help us to structure our thinking and approach to innovation. Still, in the workshop we run at the seminar, most of the ideas and outputs of the teams were around product and system innovations only! Why that? I believe this has to do with our background and experiences. In order to really leverage on from the framework, you need to be able to get yourself into different roles. This is when I thought about the books from Tom Kelley, in particular the ten faces of innovation, which describes different roles to take in the process of innovation.

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In the book the ten faces of innovation, the author introduces ten distinctive roles that are key to innovate. The roles are the following: Anthropologist, Experimenter, Cross-pollinator, Hurdler, Collaborator, Director, Experience Architect, Set designer, Caregiver and Story teller.  In essence each of the roles brings a unique point of view and helps create true value in the innovation process. Now, I will not go through the roles in details, but I will give a few examples on why these roles matter. Some of these roles , like the experimenter, collaborator or  director roles are probably not that new to us and you can find them in most organisations, some others are probably non-existant and will limit our abilities to innovate.

Take the role of an anthropologist, why does that role matter? For a start the anthropologist takes unbiased notes on how people interact, this is quite useful to identify where real problems arise. Following  a doctor for 24h during his shift in a hospital and writing down everything that happens will provide you very different insights on the needs of that doctor and the hospital than a pre-canned survey which normally contains targeted questions. You need to be able to take an anthropologist mindset if you want to understand how to create value in experience. Another interesting role is the cross-pollinator, this is a person that is good at gathering learnings from other industries and helps to apply them to your environment, telcos can for instance learn a lot about loyalty programs from Airlines or other companies in the services business. On a side note, when it comes to areas like innovation in environment and sustainability, there is a whole science developed around cross-pollination, it is called bio-mimicry and it focuses on reusing learnings from nature to solve complex environmental problems. Another role, the one of story teller is certainly key to create customer engagement.  If you get a chance to read the book “Start something that matters” by Blake  Mycoskie you will see what I mean. The author is the founder of TOMS, a social business, which promises to give away a pair of shoe to children in need for every pair of shoe it sells. The huge success of this company is certainly due to the story it conveys and how people relate to it.

So while individuals in a company can take on multiple roles, and while they can use the framework to get structure around the innovation process, their skills and background will often not allow them to take on all these roles and I think this is where the process generally fails. New skills and competencies have to be injected in the company, either channeled, crowd-sourced or otherwise added to projects to get to breakthrough innovations.

How to establishing a culture of innovation?

The challenge of establishing a culture of innovation is slightly different for start-ups than it is for larger companies. For smaller companies, where innovation is often at the heart of the business, I think the framework can quickly be used to validate the innovations and see where the value will be generated, while the roles defined in the ten faces of innovation could be used to validate whether you have the right mix of people that can take on some of the roles described earlier. The incubators and accelerators can also help you fill in the blanks during that process.

For larger companies, it is certainly a much bigger challenge. Changing a larger company’s culture is not an easy task. Larger companies are often optimized for cost and output. Projects that don’t have a clear business case from day one are usually not invested in, company’s HR departments might not allow you to hire people that do not fit into their existing career models, innovation investment boards are often lacking experienced entrepreneurs and are mostly composed of finance people that have never started a business, many hurdles to overcome. To overcome these hurdles requires top level commitment and different types objectives need to be deinfed. Many companies have actually managed to get around these challenges by creating an innovation culture which introduces new approaches, new KPI’s and by injecting new skills. In telecommunications,  AT&T is a good example of a such a company that has introduced an innovation culture. They introduced the Foundry concept, which works like an incubator/accelerator within the company, but then they have also invested in news skills, like for instance setting up a medical department with a Chief Medical Information Officer. When starting to grow in the digital health business they have addressed the different types of innovations, but they have also onboarded people that can the innovation roles of caregiver or cross-pollinator.

In any case I believe any change management program that aims to establish a culture of innovation should inspire itself from the 10 ten types and 10 faces of innovation.

M2M and a Blue Ocean of possibilities…for Startups

There is now little doubt that we are about to see an exponential growth in connected devices. This will lead to what is referred to as the Networked Society or the Internet of Things.  Ericsson predicts that there will be up to 50 Billion connected devices by 2020.  What is more difficult to predict is who will shape this industry as the value chain is fairly complex and the eco-system is fragmented.

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Operators are today providing connectivity services and want to move up the value chain, either by providing service enablement functionality or industry targeted business solutions. Consulting companies on the other hand might try to keep it a complex system integration business, while specialized service providers focus on providing value in specific verticals.

I believe now is the right time to disrupt this M2M/IoT industry.

Take an OTT approach and put all your efforts on innovation and value creation. Why? Because the cost of developing, integrating and deploying new solutions goes down close to zero. Entry barriers for new companies are vanishing really quickly. Here are four trends that support this thought.

1 – Super Affordable Sensors, Device Gateways and Controllers

Today almost anybody can start prototyping to create connected devices at low cost. Arduino, for instance, is an open-source electronic prototyping platform allowing to create interactive electronic objects. With arduino you can create and control simple objects, sensors, all of this for a handful of dollars. For less than a hundred dollars you can even connect to the internet over a mobile network.

Similarly, for more complex control, it can be enhanced with cheap processing power, the Rasberry Pi is a 25 USD, credit-card sized computer that plugs into any HDMI TV and USB keyboard/mouse. It includes an ARM chip that is powerful enough to run Linux and a full Java Virtual Machine. The possibilities are endless.

Standardization is also moving to make things easier. ZigBee protcol and Zigbee alliance is an example of such a simplification initiative. ZigBee is an open global wireless standard to address the needs of low-cost, low-power wireless M2M networks. ZigBee applications include wireless light switches, electrical meters with in-home-displays, traffic management systems, and other consumer and industrial equipment that requires short-range wireless transfer of data at relatively low rates.

Technology is also evolving and supporting move innovations. Bluetooth Low Energy (BLE) appears to have solved some of the energy consumption problems of sensors since these sensors can last 1-3 years with the same battery. iBeacon, a technology derivative of BLE, is now also getting widely adopted. Some companies like Estimote, WiMoto or Blesh have quickly understood the potential and are provide sensors and toolkits that allow you to collect more data and create value.

There is a big shift in the industry that is happening as we speak and you only have check the number of Crowfunded projects to see how big this trend is becoming.   Now is the time for the emerging maker generation.

2 – Opensource M2M Plaforms / Cloud Platforms

Appearance of opensource M2M platforms like DeviceHive provide now also the communication layer needed to control multiple devices and sensors that can be used to develop home automation solutions, energy management solutions and much more. These M2M platforms provide also the basic functionality to provision, manage and control multiple devices that are part of an M2M enterprise solution. The platforms also support simple API’s based on HTML to address a large developer community.

Deploying an opensource M2M platform on a public cloud provides a very attractive go-to-market approach for anybody that wants to become an M2M specialized service provider. Not much is required to get started.

With the cost drastically decreased, more innovation will come from the end-users within each vertical. I could easily imagine larger communities like cities develop their own M2M solutions and manage it in order to optimize urban development and public spending. Why not?

3 – Application Design through Mashup and Integrated Communication

With the development provided by HTML5 we can now also embed real time communication capabilities in web pages. This allows for rapid UI design, clever mash-up and a complete new type of interactivity. WebRTC is part of these new communication capabilities that can easily be embedded in Web Pages. Whether it is voice, video, messaging or document exchange it can now all very easily  be provided from a web page.

I have now doubt that these technologies could easily be used to develop home automation or energy management solutions that can be controlled from a tablet or mobile device from anywhere in the world.

4 – Low risk and quick market feedback through crowd-funding 

I believe the Internet of things provides huge opportunities for innovation, substantial growth opportunities and an entry barrier which is fairly small. Beside the availability of open source technology to reduce production cost, operational costs can be reduced thanks to cloud. And why not use social media to build-up your M2M tiger team and for the funding try to expose your project to crowfunding platforms like Kickstarter.

In Kickstarter project creators get funded by the community. They set a funding goal and deadline. If people like a project, they can pledge money to make it happen. Funding on Kickstarter is all-or-nothing — projects must reach their funding goals to receive any money. Kickstarter is very effective in creating momentum and rallying people around an idea. Backers are supporting projects to help them come to life, not to profit financially. Instead, project creators offer rewards to thank backers for their support. Kickstarter takes a marginal 5% fee to the funds collected.

What industries to target?

I believe that with the current technology development, fragmentation of current M2M value chains the opportunity is there for anybody to take a strong position with niche industry solutions. The entry barriers are pretty low.

For the consumer market, applications like home automation and energy management are probably good places to start, but I think there might be huge possibilities as well in sectors like e-health and quantified self.

Enterprise segment might be difficult to enter for startups, since it is ofte about optimizing current business processes and using M2M to reduce costs. From telemetry, to POS, Securtiy or Vending machines the industry specific requirements will usually make it more or less easy to enter that particular market.

When it comes to industries to target there are plenty and the shipment of connected devices per segment is going to surpass 100 Million per year in a couple of years only, according to an ABI research report, so plenty of choice.

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A call to innovate and disrupt the M2M/IoT space

I believe now is the right time to disrupt this M2M/IoT industry: Affordable devices and sensors, reduced costs through cloud and opensource, Application design requiring less coding and finally crowdfunding allowing you to quickly validate and fund your ideas. All the conditions are right, now is the time to Make it happen.