Monday, February 17, 2014

Hybrid Innovation

Hybrid nature of innovation is a combination of something old with something new, with a mixed portfolio of incremental innovations and radical innovation.

Innovation is a management discipline, just like many key elements in businesses today, such as leadership, culture, process, or technology, etc, HYBRID is the digital fit style for managing innovation. From a portfolio management point of view, companies need both incremental product/service innovations to thrive but also desire large, disruptive innovations for a quantum leap. Managing innovation requires leaders, either formal or informal, to shepherd an idea through several phases of development, knowing when to move forward and when to return to an earlier phase. But more specifically, what is hybrid innovation and how to manage it effectively?

Incremental innovation vs. radical innovationIt may be easy to split the term "innovation" into two categories, "incremental innovation" and "radical innovation."Incremental innovation has an equal notion or concept with continuous improvement, focusing on improving part of the business process or capability. Radical innovation focuses to "replace" conventional value stream with the new one, supported or filled with noble knowledge and idea.

Hybrid nature of innovation: It is hard to think of any innovation as not a hybrid, a combination of something old with something new or a number of new things. Probably, the more hybrid, the more familiar things are combined, the less likely is any disruption, although all innovations are disruptive of something or some behavior to some degree. You could consider all innovation by hybridized in that sense. Precisely that’s why it is an orthogonal concept to disruption.

Disruptive innovation with Creative Destruction: Innovation is progressive because it represents a new way of doing things and it could be destructive because it makes previously valued skills or competitive advantage less demanded, with the potential of becoming obsolete. Disruptive innovation is the most important concept in innovation because it can be demonstrated that virtually all real economic growth or societal progress is driven by disruption. Disruptive Innovation brings something new to the party - something that couldn't have been possible.

Incremental-Radical Innovation Continuum: The incremental innovation always starts with a small objective/aim to achieve, incremental innovation generally brings short-term value additions or competitive advantage. Radical innovation starts with a problem, having no solution in the current situation. You know what do you want but do not know how. Second, Radical innovation is out of the box thinking where incremental innovation is still inside the box thinking. Incremental innovation is what is used after the radical innovation to "touch" things up a bit. It is much more predictable, often the result of optimization efforts on the product or process.

Innovation Portfolio Management. Innovations in the digital age are coming at seemingly a much faster pace, more change, more potential disruption, but the patterns and rules of communication are pretty much the same. The broader the scope, scale, and impact of the change, the more one leans towards calling such change an innovation. Some additional variables that might merit consideration are the scope, scale, and impact of the change. Significant innovations can catalyze organizational change. Innovation management does require not just interdisciplinary understanding to connect the dots and see what's possible, but also technical expertise to create the disruption unless it is so simple that anyone could do it.

Radical innovators with ‘Hybrid’ (cross-disciplinary) Knowledge: The radical innovators are adept at seeing ways to transfer knowledge from one field to solve a problem in another. They may or may not have a great volume of knowledge as some authorities (an industry insider, vested in the status quo., etc) in a field. But they perceive a key error or gap in the conventional wisdom and a way to resolve it. A corollary to this view of expertise is something like the old 80/20 rule: Only 20% of the knowledge in some subject usually suffices to solve 80% of the problems. So a radical innovator does not need to master all or most of a subject. Rather he/she is skilled at gleaning only the essential knowledge which is relevant to the problem that the authorities have either bungled or overlooked. So the innovation ability lies with those who can see the gap between what is currently available and what is possible. This is of course facilitated by interdisciplinary knowledge.

Hence, in order to manage innovation portfolio effectively, you do need certain form of framework and processes to ensure that you can qualify ideas and direct the right amount of resources/investment to the most promising idea based on its incremental or radical nature, but innovation management process needs to be anti-fragile, but not too rigid.


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