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Introducing the Management Model Canvas© - Part 8: Innovation Capabilities

Having an innovation model (as discussed in part 7 of our series) is only the first step. Once you’ve conceptualised how you’re going to innovate, you also need to build the organisational capabilities to make innovation work in practice.

Rationale

Many organisations fail to innovate because they don’t invest in building the organisational capabilities needed to do so.


They might decide for themselves that business model and value proposition design (as proposed by Strategyzer) is their conceptual framework for thinking about innovation. They might send their people to some of the great training workshops Strategyzer offers around the world. They might think they are really serious about innovation.


But then they fail to follow-through with building the fertile breeding ground on which what people have learned at these workshops can start to bear fruit when they come back.


Organisational silos might make it next to impossible to work together in truly dedicated, cross-functional teams. Or resource allocation processes and budget rules might make it impossible to get funding without a business plan. And these are only some of the most obvious (yet surprisingly prevalent) examples of lacking in organisational capabilities.


That’s why in management model design we ask you to to carefully think through what capabilities you might still need to build in order to be truly successful at innovation.


As is the case with execution capabilities, at this level we only ask you to identify and name the capabilities required. But remember that in an actual design exercise you will have to go deeper and describe how these capabilities come into existence. Again, there are many different theories and frameworks to help you think about organisational capabilities. We won’t prescribe any (the MMD library will point you to different options), but one we particularly like is RPP theory. You’ll find more details on RPP theory in the execution capabilities post of this series as well as in the example section below.


What goes in

The capabilities we need to innovate as an organisation, as described in our innovation model and in particular to

  • generate ideas

  • test ideas

  • design products, services and business models

  • design better processes and even management tools

  • scale what works

  • abandon what does not


Questions to ask

Idea prioritisation and resources?

  • Where do ideas com from?

  • How do we select which ideas to pursue further?

  • What resources do we need (people, skills, investment, technology, partners, intangibles, customers, …) and how do we ensure sufficient access to them?


What might hold back our innovation efforts?

  • metrics influencing de facto vs. intended resource allocation?

  • insufficient exposure to customers and the market?

  • management decisions overruling market evidence?

  • internal hurdles (eg, budgets, business plan requirements) to get access to experimental capital?

  • lack of focus and link to strategy?

  • lack of ambition?

  • too narrow definition of what game we’re playing, which industry (or playing field) we’re in?

  • ongoing business crowding out resources (investment, attention, …)?


Integration with other parts of the organisation?

  • How do we embed these capabilities in our organisational architecture?

  • How do we build bridges to other parts of the organisation (for access to resources, learning and later scaling)?


Examples

Apple has some innovation capabilities which might not be obvious at first glance. One is the “no constraints” capability. It means product teams face no constraints and are completely free to re-magine their products.


Another is the ability to “bend reality” in product design. Apple over the years has learned how not to take “no” for an answer, unless the laws of physics literally say something cannot be done. In way too many organisations, when engineering says “no”, the response is to make compromises in product design to accommodate technical limitations. Not so at Apple. When, eg, engineering wanted to make Apple Watch’s heart rate sensor a part of the wrist band (because that made it easier to get accurate measures), the design team simply said “no”, knowing that this would have severely compromised Apple’s ability to turn watch bands into a fashion accessory. And engineering found a better solution.


A third capability is Apple’s ability to learn beyond the product and get better and better, eg, in production processes (which in turn eg, enables product designs the competition may find difficult to fully replicate, make production cheaper and more accurate or more environmentally friendly).


An organisation’s existing capabilities sometimes get in the way of better outcomes - so it is important we don’t develop a static view on capabilities. We have to constantly ask if our organisations need to learn new things - or maybe unlearn some old things.


A good example for this is the World Bank, as outlined in a recent article by Efosa Ojomo of the Christensen Institute. The bank is very good at funding and managing large, complex development projects. As good a thing as this is, there is good evidence that this actually causes the bank to miss out on many smaller opportunities that may actually be more impactful for its goal of eradicating poverty.


The short article is well worth a read, not the least because it makes its case through the lens of RPP theory and includes a very succinct description of how the theory works.

This concludes the innovation pillar of the Management Model Canvas©.


To conclude the series we will next look at the heart of the canvas, which holds everything together: first by having a look a the contribution component (which is about collaboration and organisation design) and then concluding with the dynamic, life-giving components (decision making, sharing, changing and last but not least: people & leadership).


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© 2019 Raymond Hofmann Management

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