The Elastic Innovation Model

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TL;DR 

A quick overview of everything – The Elastic Innovation Framework (EIF).

I know – its hard to see. Email me at Shahar@tinkermd.com and ill share the pdf with you.

1/ Know

Rationale & Purpose

The first step in Managing Disruption is to “be in the know”. Corporations and leaders must be aware of what is happening in the world (not only in their immediate business environment).
In order to be in the Know, the EIF describes an edge-organization  that is dedicated to gathering intelligence (not only competitive intelligence).
This organization – we call it “8200” – has to be insulated from your organization.

Function

Continues exploration and mapping of new sources of disruption potential:

  • Known, Industry-specific start-ups, researchers, competitors and value chain entities (partners, suppliers, customers, etc.)
  • Known, adjacent-Industry start-ups, researchers and companies
  • Un-known innovators: Individuals. Communities, researchers, students, customers and others

Implementation Models

The 8200 EO must be external. That mean it must be:

  • Autonomous (authority and means)
  • Physically removed from the corporation
  • With its own infrastructure (e.g., IT resources)

Two principal implementation models:

  1. “In-house” 8200 EO – the corporation selects a “covert” team (1-2 people at first) whether by recruiting them or selecting them from inside. This team is tasked with the setup and is supported by external resources for training and process design/adaptation. Once the EO is mature it is spun-out and starts working as a separate BU reporting directly to the organization’s senior leader (not leadership).
  2. 8200-as-a-Service – Same as above only provided as an external service. Reporting to the organization’s senior leader.

2/ Bet

Rationale

This stage is named “bet” for a reason. The normal process of project selection in companies is evaluation-based. As the word “evaluation” suggests its about value. It focuses on certainty – both in general and specifically in the value creation potential. It entails reduction of risk. This is the right approach when dealing with projects and even when dealing with sustaining innovation. In the case of Disruptive Innovation and Disruption Management that type of process is not helpful for several reasons:

  • Innovation explores the known-unknowns (attempting to expand on the known domain). Disruption happens in the unknown-unknowns and as such its essence is experimental, exploratory and uncertain. Attempting to increase certainty will result in either fooling ourselves or focusing on incremental innovation.
  • Traditional evaluation tools assume the organization’s existing value creation strategy as the base metric. In the case of disruption we intentionally want to explore avenues that are divorced from the existing strategy.

When managing disruption we, you, must assume a “betting” state-of-mind in which knowing and certainty are simply irrelevant.

The Small Short

This stage is essentially a short position on the organization’s strategy. It makes sense if you think about it. In a volatile market, the rationale thing for an investor to do is to “short” some of her portfolio in order to hedge the risk (this is not hedging that is based on knowledge or certainty – it is based on a statistical position). Much the same way, the organization that accepts the rapid changes in the market as volatility, should invest some resources in “shorting” the current strategy – simply as a hedging precaution.

Disruption Center

This is an EO that will evolve from the 8200 team and will be responsible for maintaining and managing the organization’s “short” position. It will nee to adapt existing evaluation metrics, adopt best practices and tailor organizations-specific heuristics for the selection of engagements with the potential disruptors. It is the heart of Managing Disruption.

3/ Grow

Rationale

This is where the “real” work is done and most of the resources are spent. The process has 4 stages to it (not linear – you can skip one or several):
Enabling nascent ideas – creating an environment that is conducive for innovators to develop potentially radical innovation in.
Nurturing – supporting early stage initiatives, ideas, projects and companies so they can demonstrate the viability (as value creator) of their project.
Maturing – Development into market-ready initiatives
Committing – significant resources (mostly money – other resources are already provided in earlier stages)

This process is governed by the DC (Disruption Center) and delivered by external EOs or service providers.

4/Realize

Rationale

In the case of disruption we must be pragmatic about the “value capture”. Put Simply, absorption or integrations are not the only options. Letting go and allowing for more independent and sometimes even competitive trajectories is critical. Small organizations tend to die when absorbed.

Below is a graphic model in its final stages of development…

I know – its hard to see. Email me at Shahar@tinkermd.com and ill share the pdf with you.

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By | 2017-10-26T13:04:08+00:00 October 18th, 2017|Uncategorized|0 Comments

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