Why You Need an Innovation System

I was originally going to title this post:


This is because while we were in Italy, I went into several bookstores, just to check out what was there. A couple had superb business sections, but all of them had enormous vampire sections too. Some of them were translations of vampire books originally written in English, and quite a few appeared to be written in Italian. Whatever the language, vampire novels appear to be pretty hot right now. So are books that use the suffix -onomics, – nomics, and -ology. So I figure that a book called Vampirenomics has to be as close to a guaranteed best-seller as you could find right now.

Unfortunately, I don’t really know how to write Vampirenomics. Like I keep saying, the value in a great idea is in the execution of it, not in having it. So if you can figure out how to write Vampirenomics, be my guest. Maybe just mention me in the acknowledgements…

But you better act fast, because I think that both vampire novels and -nomics books are a fad, and their lifespans (hopefully) won’t last too much longer.

Some people say the same thing about innovation. It’s a fad, it has too many different meanings, there are many different excuses people use to discount the importance of innovation. The one that is probably most valid is that their firm has tried to be innovative, but it hasn’t worked.

One reason that innovation initiatives often fail is that people try to take “best practice” solutions from elsewhere and cram them into a particular context where they may or may not be appropriate. What you need to make innovation work is not brainstorming, or an innovation team, or idea-tracking software, or innovation consultants, or any of the other innovation ideas that are put foreward as generic cures. What you need is an innovation system – one that manages innovation as a process.

Bill Easterly wrote a great post today called “The Answer is 42! Why Development is not about solutions, it’s about problem-solving systems” which looks at a similar problem in development economics. After making a similar list of things that are supposed to create economic development, but which don’t always work, Easterly says:

Development happens thanks to problem-solving systems.

The problem-solving systems could very well use some of the same solutions that were discussed above (a transparency law, microcredit, malaria bed nets, conditional cash transfers, web-based clever thing, eliminating business red tape). This leads to much confusion, as people then try to directly imitate particular solutions in the absence of a problem-solving system, which as stated above, leads to disappointing results.

The problem-solving system is adapting solutions to local circumstances. And even more importantly, a problem-solving system coordinates the efforts of many different problem-solvers with nobody in charge (for example, in the market, prices serve as signals to coordinate the actions of many different suppliers to solve the problems of demanders).

Direct solutions to problems (say, using aid programs) still may be worthwhile as benefiting a lot of people. But a long list of many such solutions is not development; development is the gradual emergence of a problem-solving system.

Innovation systems work the same way. Organisations slowly build up capabilities in generating ideas, in selecting new ideas, in testing whether the ideas will actually work, and in getting the ideas to spread. You need to have all of these sub-systems working well to have a functional innovation system.

Don’t look for the silver bullet, one-size-fits-all solution to create innovation within your organisation. There isn’t one. Instead, work on building the multiple capabilities that are needed to make innovation work. Some of the things like brainstorming, etc. may indeed be part of the solution that works best in your particular context. But finding this out is an evolutionary process. You need to try a bunch of stuff, see what works, and do more of that.

If you do that, you will build an innovation system that can be managed, and that will work in the long run. Then innovation will be a capability, and a source of competitive advantage – not a fad.

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

4 thoughts on “Why You Need an Innovation System

  1. Hi Tim,

    Nice fresh post – good read.

    I would argue that Vampirenomics is the antithesis of innovation – a sort of self serving operation that sucks and feeds on others innovation and spits them out as living dead. Umair Haque describes this as the zombieconomy.

    Instead I would like to find a mythical self sacrificing creature that gives and develops others.

    I like the ideas from the answer is 42 – now lets find teh question!

  2. Interesting point Martin – Umair has talked about the zombie economy, and so has John Quiggin – so maybe the idea isn’t as frivolous as I first thought!

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