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The Discipline of Innovation

 

“How much of innovation is inspiration, and how much is hard work?” – simple yet deep wondering raised by Peter Drucker questions innovation mechanism. Given the extraordinary importance of innovation in both business and society, it is worth knowing factors that CREATE and SUSTAIN innovation. How to make your innovation progress and develop to its full potential? Can innovation be managed like other corporate functions? Is there any magic formula for innovation’s success? This article will help you better apprehend the concept of innovation, its characteristics, where to find it, and how to make innovation become INNOVATION.

Innovation and its fundamental definition:

Changes are imperative, and thus innovation inevitably becomes a hype among enterprises globally. However, without genuine comprehension of innovation and initiatives behind it, most companies fail to complete their innovation journey. Therefore, it is compulsory to know WHAT innovation really is, and Why innovation? 

Basically, innovation derives from original solutions that are developed to meet new requirements or unanticipated needs. Innovation is not invention, instead, it is the combination between invention and commercialization. Products or services are only considered as innovation when they show practical application in reality, and are welcomed by the market. Most people think of innovation as something massive, novel and spontaneous. Biologist Francesco Redi once said every living thing came from a living thing which applies quite well in the innovation context. “How can you think of this? It’s so simple!” – no glamor or fancy, innovation gives people the “WOW” moments in its normality. It can be new ways of business models and money streams, new systems of products and services, or even new customer engagement. Besides, the innovation must demonstrate high sustainability and ability to return its weighted cost of capital (Keeley et al. 2013).

Not only does innovation help companies maintain their growth in economic downturns, it also keeps companies relevant in the dynamic market. In other words, innovation is the key to survival and resilience of one company to attract better suppliers, ideal investors, and loyal customers as well as employees. The three most common metrics for innovation evaluation are:

  1. The number of patents and patent citations owned by a company.
  2. The number of distinct products offered by a company.
  3. The frequency of new product releases.

Sources of Innovation:

“In business,innovation rarely springs from a flash of inspiration. It arises from a cold-eyed analysis of seven kinds of opportunities”. – Peter F.Drucker (1985)

Genius and Luck are two designated labels for innovation. However, innovation, especially the successful ones, are the results of an empirical, intentional, and conscious search for innovation opportunities. In his article, Peter Drucker mentioned the seven sources of innovation worth noticing:

Within a company or Industry (Internal source):

  • Unexpected Occurrence is the  easiest, simplest, and productive source of innovation opportunities. It can arise from a surprising success of failure, but is commonly dismissed, disregarded and resentful. Particularly, it is the art of seeing potentially in the unexpected. Originally created by a pharmacist as a headache and anxiety treatment, Coca Cola has now positioned itself as the world’s most popular soda.
  • Incongruities is another source of innovations resulting from resolving inconsistencies within a system or situation. They happen within the logic or process’s rhythm, between economic realities, between expectations and results. The Scott Spreader, which allows homeowners to apply fertilizer evenly is an example of exploiting this incongruity. Or Edward Jones Company – a financial services business takes advantage of larger Wall Street corporations’ misperceptions about consumer values. Jones recognized a market sector, farmers and individuals about to retire, as having a desire for solid investment before retirement, as opposed to the frequent stock trader that Wall Street corporations concentrated on. 
  • Process needs is the type of process perfection or a procedure reworking via supply of a missing link which also creates innovationInnovations. It identifies the company/industry process’s weak spots to improvise and enhance productivity. The creation of the ATM (automated teller machine) and, more recently, web-based and Internet banking solutions allows customers to independently do their banking without reliance on tellers’ presence.
  • Industry and market changes can fuel innovation as well. The overnight changes offer tremendous opportunities for innovation, and require agility from businesses. Due to the extended lockdowns in COVID-19 pandemic, companies now move towards hybrid or fully-online working, which results in the rising users in Employee Management Software or online working tools. 

Social and Intellectual Environment (External source):

  • Demographic changes allow innovation stemming from trends in population’s composition. It is considered as the most reliable source among 3 external sources with known lead times. For instance, prepared meals and takeout food are developed  to meet the demands of busy two-income families and single-parent families.
  • Changes in perception opens another opportunity for innovation which results from change in customers’ perspective and opinion. The facts are not altered, but their meanings change very quickly. Concerning minimization of social interactions amidst COVID-19 pandemic, customers opt for online shopping and cashless payments thanks to their safety and convenience. E-wallets and digital banking together with booming e-commerce, unsurprisingly, have seen exponential jumps in popularity. The majority of online and physical retailers now accept digital payments using smartphone applications. VNPay, Momo, and ShopeePay are among the most prominent participants in this fast developing market of Vietnam.
  • New knowledge is among history-making innovations which are based on new knowledge whether scientific, technical, or social–rank high. As commented by Peter Drucker: “Knowledge-based innovation can be temperamental, capricious, and hard to direct”. Therefore, this kind of innovation requires combinations of different knowledge, not one only 

Disciplines of Innovation: 

“Innovation requires knowledge, ingenuity, and, above all else, focus.” – Peter Drucker

The winner is not the one with the brightest mind or exquisite skills; instead, people who know the rules are the game’s winner. Innovative, disruptive and gigantic as the ideas may be, they can only be truly successful with clear strategies and, most importantly, disciplines. These are the disciplines of innovation that should be borne in mind:

  • Purposeful and systematic innovation starts from considerate analysis of the new opportunities sources. Knowing WHERE to innovate is as important as knowing HOW to innovate. Being agile and responsive to changes, especially loopholes, can help innovators capture the right moment to develop their innovation.
  • Innovation requires activation of all senses due to its conceptuality and perceptuality. Hence, look, observe, ask and listen should be done by would-be innovators, along with using both the brain’s right and left sides. Innovators must conduct analytical research to figure out the needs  of innovation to satisfy an opportunity, then navigate potential users to study their expectations, their values, and their needs.
  • Simplicity is an essential element that contributes to innovation. Only with transparency and confusion-free will people be ready to receive your products/services. Inevitably, the greatest praise an innovation can receive is for people to say, “This is obvious! Why didn’t I think of it? It’s so simple!” Even innovation accounting for disruptions should be guided toward a definite, unambiguous, and well-planned application for the consumers and market.
  • Focus is the prerequisite of innovation success. Talent, Ingenuity and Knowledge can accelerate initial stages like ideation. However, in execution stages, hard, focused and goal-oriented work allows innovation to be alive and become reality. Therefore, without diligence, persistence and commitment, the genius factors would be in vain.

Culture first, then innovate

“In order to get sustainable innovations and make the organization better, you do need to focus on mindset and culture. Organizational culture is not something to be dealt with when everything else is done, but it is a foundation of everything. It is about how organization’s people interact and work,” says Emilia Saarelainen, Innovation Fellowship Program Manager (UNHCR 2016).

To set the foundation for innovation, an innovation space must be invented via:

  1. Create a culture of innovation.
  2. Create novel solutions in partnership with the company.
  3. Acquire, collaborate with, cross-partnership or invest in innovative technology.

All three actions are required, but they must be completed in order to be successful, where culture is the base of that success. Notwithstanding its desirability and leaders’ affirmation to full understanding, innovation culture is undeniably difficult to develop and sustain. How can practices that appear to be universally loved—even enjoyable—be so difficult to implement? (Pisano 2019). As stated by Jesse Nieminen (2020), a strong innovation culture is the engine that propels the organization to continually improve, progress, and innovate.

Since innovation culture is a “by-product of broader business decisions” (Quirk & Reinmuller n.d.), leadership plays an imperative role in igniting cultural change and encouraging long-term flourishment. Statistics show that leadership decisions, guidance, and modeled behaviors account for 70% of the effect on culture, with the other 30% driven by aspects such as training and engagement initiatives.  Moreover, reasons behind malfunctioned innovation culture mainly results from the lack of effort and support, especially top leadership as demonstrated by the graph below (Nieminen 2020).

What is the business now  – and what must the business be in the future in order to remain relevant? By explicitly answering these two questions, will the companies/organizations be able to align its actions with goal achievements, and thus the cultural changes move forward in sync. Changes are frightening, if not annoying at least. Revolutionary as it may sound, cultural changes start with individual rather than large-scale behavioral patterns. Small changes make a big difference where the employees’ hearts and minds are connected with the business transformation movement. To integrate innovation into the company’s DNA, leaders must:

Figure 1: Challenges to Innovation (Nieminen 2020)

  • Clear communication plans for goals and expectations: Make it clear that change is an opportunity, not a hindrance. Innovation provides chances for growth, alleviates pain points, and allows people to focus on the most essential aspects of their jobs.
  • Build capacity: employees must be sufficiently provided with tools and space for creativity both mentally and physically. Allocation of time and expense for training programs and creation of judgment-free space welcoming new ideas are essential for nurturing innovation capabilities. Based on companies’ conditions, innovation methods can exist in diverse forms, from innovation labs, special cross-functional teams working on innovation projects to internal competitions like hackathons, incubators, etc.
  • Allow failures and encouragement: Resistance to changes mostly comes from fear of failures. Remind employees that mistakes make improvements, which then leads to success. Therefore, it is compulsory to notice the direct message is directly from the CEO or top leaders, so that employees are eligible to be innovative. Pushes for innovation must also be included such as Innovation KPIs, rewarding processes, and the impacts of innovative thinking via empirical outcomes and accomplishments.
  • Build Credibility: Credibility and trust are the starting point for everything. Instead of tasks with deadlines, changes are a progress, and progress takes time. Slow or fast depends on the level of credibility earned from employees. People only believe what they see. Hence, all-level of company leadership must present themselves as the role models that visibly pioneer for changes and keep up with what they have communicated – “walk the talk”.

Innovation is commonly interchanged with riskiness, failure embracement, and collaboration, which are only one side of the story. These characteristics are often misunderstood in innovation culture according to Pisano, which must be “counterbalanced with some tougher and frankly less fun behaviors”:

  • A tolerance for failure, not an intolerance for incompetence: Failures can offer valuable lessons to move forward, and contributes significantly to final success. However, failures can be the consequences of ill-built designs, errorious analysis, suficit of transparency and bad management. The harsh truth is that useful failures demand extremely competent people as exemplified by Google’s encouragement towards riskiness given its highly qualified employees. Clear distinguishment between productive and unproductive failures are essential for leaders to articulate. Productive failures result in learning in relation to their expenses, while unproductive failures degrade time, efforts and money. Celebrate learnings extracted from failures, not failures.
  • A willingness to experiment accompanies rigorous discipline: Creativity is messy, thus it needs disciplines. Experiments only bring value if they are conducted consciously, not recklessly. Discipline-oriented cultures set clear standards for each decision involving continuing, modifying, or abolishing an idea, not to mention the dare to face with real facts and admittance. Thanks to those, companies improve their decision-making power, and move fast yet carefully in every step.
  • Psychological safety with comfort in brutal candor: Openness to ideas requires openness to feedback and harsh criticisms. Good and highly competent employees have the dare to point out loopholes in perfectness. Ideas need to be “beautified”, and the most optimal ways are to receive comments from others devoid of subjectiveness and biases. Organizations with candid debate is not considered as a comfortable working place, but it proves to be more effective than the nice ones. To develop constructive feedback and growth-mindset in employees, leaders must set their own behaviors via the willingness to constructively criticize others’ ideas without being abrasive or offensive. One method to promote this sort of culture is to require criticism of their own ideas and plans.
  • Collaboration along with individual accountability: Harmonious collaboration between teams accounts for a healthy working environment, where everyone grows together. Nevertheless, collaboration should not be confused with consensus since it harms rapid decision-making process and navigation of perplexing problems related to transformational innovation. Individuals must be accountable and responsible for their suggestions/opinions, instead of following the crowd. 
  • Flatness yet strong leadership: Flatten structure nurtures the ideas flow and respect among employees and top levels. Regardless of these open features, flat organizations means stronger leadership than hierarchical ones. For its autonomy, flat organizations can lead to chaos without clear strategic priorities and directions. Senior leaders must be able to convey appealing big-picture concerns while still being knowledgeable and competent with technical and operational challenges. Meanwhile, employees must have their leadership capabilities developed, being proactive to actions and accountable for them.

Besides capital, resources and strategies, spirit is the element keeping innovation alive. Only with readiness to changes from employees – the core assets without depreciation of companies, will larger changes like business model innovation, new markets and customer segments, or new customers propositions.are embraced and progressed. Most importantly, it is crucial to remember that innovative cultures are paradoxical, and attempts to truly establish an innovative culture are based considerably on the art of managing those paradoxes.

Reference List:

  1. Drucker, PF 2015, ‘The Discipline of Innovation’, Harvard Business Review, 16 July, viewed 1 March 2022, <https://hbr.org/2002/08/the-discipline-of-innovation>.
  2. Nieminen, J 2020, Innovation Culture – The Ultimate Guide, Viima, viewed 1 March 2022, <https://www.viima.com/blog/innovation-culture#why>.
  3. Pisano, G 2019, The Hard Truth about Innovative Cultures, Harvard Business Review, viewed 10 February 2022, <https://hbr.org/2019/01/the-hard-truth-about-innovative-cultures>.
  4. Quirk, S & Reinmuller, J 2018, Building an innovation culture – KPMG Global, KPMG, viewed 1 March 2022, <https://home.kpmg/xx/en/home/insights/2018/06/building-an-innovation-culture-fs.html>.
  5. UNHCR 2017, Why innovation starts with the right mindset, UNHCR Innovation, viewed 6 March 2022, <https://www.unhcr.org/innovation/beyond-the-fellowship-why-innovation-starts-with-the-right-mindset/>.
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DESIGN THINKING – PERFECT TOOL TO PUT YOUR PLAN INTO ACTIONS

Is your planning technique effective? 

 

Do you find yourself always exhausted, racing to meet your deadlines at the last minute? Do you plan your life carefully and keep track of time well, but still struggle to get your job done on time? Don’t be surprised if you are, because you are not the only person in this world who fell into the planning fallacy mindset without realizing it. 

 

The Planning Fallacy was first introduced by Daniel Kahneman and Amos Tversky in 1979. They proposed that human beings are not very good at estimating time, costs and risk to complete certain tasks, even if we have the right experience in doing such tasks. This results from only focusing on a prediction, based on specific elements of a plan, rather than the distributional data. This leads to tasks not being completed on time because the individual underestimates what is needed for the deadline to be met. Furthermore, we can be overly optimistic about ourselves, in that we believe that we have enough time to complete tasks. Consequently, this means that the individual makes excuses for poor time-keeping. 

Design thinking is one of the most effective ways in which a person can overcome this struggle in planning and executing what has been planned. Design thinking is a human-centric concept to help people design their own solution by digging into the root causes and solving them. It is time to spend your time tailoring your own plan for the new year. 

 

STAGE 1: EMPATHIZE – WHO ARE YOU?

Understanding yourself is easier said than done, but it is time to take a seat, to have a self-talk, to identify your strengths and weaknesses as well as to clarify your short-term and long-term goals. 

There are 4 questions you should ask yourself. Try to answer as honestly and clearly as possible:

  1. What strengths make you proud of yourself? 
  2. What weaknesses make you lose your opportunities? 
  3. Now, what do you want to change? 
  4. What is your dream for the future? 

 

Do not answer in general like “I want to improve my English level” instead, make it specific and measurable like “I want to achieve IELTS 6.5 in the next 6 months”. The more details you give, the deeper you will understand yourself. Such types of answers will make your plan more practical and more suitable to yourself, therefore making it easier for you to implement the plan. 

 

TIP: Consider asking your parents, your relatives, your co-workers or whoever in this world that you believe understands you, and ask for their opinions. This will help to avoid a subjective understanding about yourself or an illustration of yourself that you created. 

The goal for this stage is to dig into who you are, to learn and to explore more about yourself. 

 

STAGE 2: DEFINE – WHAT DID YOU DO? 

After learning about yourself, your next step is to reflect on what you did last year by answering the following 3 questions: 

 

  1. Which goals/tasks did you complete in the last year? 
  2. Which goals/tasks did you plan but fail? 
  3. Which goals/tasks did you reschedule ?

 

Next steps: List down all of the reasons both subjectively and objectively that you think led to the failure of task completions. This will enable you to find a method that avoids procrastination in implementing the plan in the new year. There are many methods to help solve your procrastination and to reschedule the task completion on time, which may come from internal or external factors. For example, you may feel that if  sharing your plan on social media or with close friends will motivate you to achieve your goals. Or you may challenge yourself with punishments and rewards. Whatever you choose to do, just make sure that it will boost your must-do attitude meaning that no delay or procrastination is allowed. 

STAGE 3: IDEATION – WHAT ARE YOUR GOALS?

In this stage, you should keep calm and relax, let your mind wander to write down your goals: what do you want to improve or what you want to change? Where do you want to travel? How many books or what kinds of books do you want to read this year? Do not forget to think about your dream. Just write them down in your journal or whatever place you feel safe. Don’t worry if it may look a little bit messy on your paper, I will help you arrange it later. 

One important note you should bear in mind is that your techniques should help you to overcome your procrastination, which you have listed in the ‘Stage Two: Define’. Ideation will be the foundation to enable you to implement the method successfully, thus try to make it as precise as possible. 

STAGE 4: PROTOTYPE – PUT YOUR GOALS INTO PLAN 

Design thinking is the solution-orientated and action-orientated step in which you must focus on finding actionable solutions. Thus this stage is the most important in the planning process. In this stage, you will put all your goals and activities into a detailed plan. 

  • Categorize your goals and actions:

The first step is to divide your goals into 3 smaller categories: 

  1. Personal Development: The goals or actions that will help you nurture your personal growth.
  2. Study/Work: The goals and actions that will lead you to your career path.
  3. Family/Friends: The goals and actions that will strengthen your relationships. 

The more correctly categorized and prioritized these goals are, the easier the next steps will be. 

 

  • Strategic plan 

 

These previous parts will be evaluated again in time length and importance in order to categorize them into short-term, medium-term and long-term goals. This step requires a lot of effort and careful thinking so as to avoid mistakes. The following is one technique that I find easy to apply. 

Firstly, start with the axis of abscissas, you put all the goals in this axis. Arrange these goals based on its level of importance and affection to yourself. 

After that, you will use the axis of ordinate to evaluate the difficulty level, time and effort in each goal. The more difficult the goal is, the more time you spend, thus you can move this goal to a higher position. 

For example, if your goal is to achieve IELTS 6.5 in 2020, to me it is a medium difficulty level and it is also important. Thus my graph will be like this:

As you see the strategic plan graph divides into 3 parts:

Part 1 – Short-term and easy goals that you can finish in 3-6 months 

Part 2 – Medium-term and average difficult goals that take longer time about 6-18 months to complete. 

Part 3 – Long-term and difficult goals but not urgent goals which you can finish in 2-3 years. 

Put your goals into these 3 sections and the goals, which are in the Part 1 area, are prioritized in your detailed plan. 

 

  • A Detailed Plan

The detailed plan includes 2 important numbers: deadline and key result.

  • Key results: A plan is nothing without clear and measurable outcomes because they help you estimate the desired results and avoid giving up in the middle. 
  • Deadline: Give yourself specific time of completion in the goals. There are many apps which can assist you as the reminder like: Evenote, Wunderlist, Calendar,… These apps will help you stick to your goals and complete them on time. 

In terms of the medium-term and long-term goals, you can break them into smaller activities and put them into your detailed plan. This action will make sure that you are following what you have planned and start doing it from now. 

STAGE 5: TEST – CONTINUOUS PLAN IMPROVEMENT

The plan is just what you write down on paper. That’s why to make this plan come true, you need to invest your time, money and effort. There is no perfect plan in the world and you should test, do, learn and test again, as to which method fits with your style. You might not be able to change your goals but you can change the way you take action in order to achieve your goals. Be flexible and be prepared because there will be uncontrollable factors coming from the external environment, as well as from yourself, that may cause failure in implementing your plan.

 

I hope that you can stay focused on what you are about to do, always believe in yourself and always try your best to be a better you. Remember that if you plan it on just paper, next year you will be in the same state as you are right now but you’ll be one year older. Be strong and brave, take action, and challenge yourself! 

I hope all your plans come true as you expected.

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OPEN INNOVATION IN VIETNAM – OPPORTUNITIES AND CHALLENGES

Open innovation is quite a new definition in Vietnam which provides both opportunities and challenges. While many Vietnamese companies have apparent views about open innovation to embrace competition, they are finding a way to involve it effectively.

Over 50 experts and startups in Vietnam as well as other countries had attended to “Open Innovation” workshop hosted by Innovation Lab on April 11th, 2019. As open innovation allows companies to look beyond their internal resources to have a wider network in which to co-create and leverage fresh expertise, the “Open Innovation” workshop provides them an apparent view about generating new ideas to embrace competition.

Mr. Pham Hong Quat – General Director, National Agency for Technology Entrepreneurship & Commercialization (NATEC) started the workshop by sharing about innovation in Vietnam. By his experience and observation, he added that many countries in Southeast Asia had angel networks supporting startups which Vietnam was currently lack of and needed to expand. Furthermore, the government played an important role in motivating startups through their supporting policies.

Mr.  Pham Hong Quat – General Director, National Agency for Technology Entrepreneurship & Commercialization (NATEC)

Last but not least, he emphasized that building innovation ecosystems was very potential and important not only in Vietnam but also in all over the world.

Following was “Open Innovation – Why and How” presentation of Mr. Laurent Levan – President of Universal Robina Corporation (URC) giving attendees much valuable knowledge about the importance of innovation and methods to apply it in companies with real examples.

Mr. Laurent Levan – President of Universal Robina Corporation (URC)

As his sharing, the common thread for the company from “ground zero to success” were building new ventures and partnership. Besides, “Do not be afraid to fail, test and learn” attitude was a crucial characteristic that he focused on to develop a new company.

Taking Vietnam as an example of a particular country with an unprecedented pace in developing innovation recent years, he shared industry 4.0 helped Vietnam to look at the supply chain, procurement from materials to distribution goods, and use technology to change management. For example, Vietnam develops Blockchain and IoT to make the distribution process easier and save money for companies in the next years.

To sum up, Mr. Laurent shared “tips” to be a (big) company with the agility and the mindset of an innovative startup. Innovation should be implemented every day, with one team – one goal, with products, with partners and with innovative attitude for industry 4.0.

After that, a final panel discussion on “Building the culture of innovation” created spaces for experts and executives talking about real innovation case study in their companies.

With the question from Mr. Thang Huynh – Co-Founder of Innovation Lab, Moderator of the panel, about involving in open innovation in companies, Mr. Hareesha Narayana Shirankallu- Head of Engineering at Bosch, Vietnam, shared that Bosch applied open innovation by contacting to universities via creating hackathon and innovation campaign such as last year tool events at Sihub supporting  students in universities to incubate.

Mr. Hareesha Narayana Shirankallu- Head of Engineering at Bosch, Vietnam

Meanwhile, Mr. Chris Elkin – InnoLab Design Thinker”/Doodle Brands provided solutions through design thinking to position brand and Ms. Nguyen Lan Yen – Marketing Senior Manager of Sparkling Brands, Coca-Cola Indochina admitted that Coca-Cola’s success was based on open innovation as they realized they could not do alone and look forward to innovating of products and industry like e-commerce.

Mr. Chris Elkin – InnoLab Design Thinker”/Doodle Brands

And of course, they had many challenges to face. In Bosch, they faced to customer insights problems and realized that customer interview was very important to get new ideas. On the other hand, Coca-Cola was willing to accept 95% failure of innovation, so they can adapt how to balance between long-term and short-term goals.

Mr. Thang Huynh – Co-Founder of Innovation Lab & Ms. Nguyen Lan Yen – Sparkling Marketing Manager CocaCola Indochina

Sharing about key factors that corporations need to foster innovation, Ms. Yen said Coca-Cola always focused on finding solutions in different issues like customer, packaging or digital platform; right strategies and infrastructure; and built innovation cultures to boost innovation mindset. Coca-Cola and many companies usually find solutions from startups which are sustainable and practical in every issue from these companies. Besides, Bosch was focusing on negotiation; encourage; and doing step by step.

Innovation Lab’s vision is to create an innovative collaboration platform where all stakeholders in the innovation ecosystem meet, collaborate and succeed together. The First Innovation Vietnam 2019 was co-hosted by Natec, Magic, Enterprise Singapore, Enterprise Ireland, La French Tech, MBAN, Bansea, Vietnam Angel Network, Saigon Innovation Hub.

This article was based on the first Open Innovation Vietnam 2019