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Innovation Betterness | The Discipline of Innovation

Innovation Betterness

Why does your firm exist?

To maximize shareholder value? No – that’s the dumbest idea in the world.

To reduce transaction costs? No – that’s another economic model that doesn’t have much grounding in reality.

In fact, if you ask this of most firms, they don’t have a very good answer. There have been a few compelling contributions to this discussion recently. In the post linked to above, Steven Denning suggests that delighting customers is a much better goal than maximizing shareholder value.

And in his new book Betterness: Economics for Humans,Umair Haque says that firms should exist to make us and the world a better place. That might sound a bit utopian, but think about the opposite of that idea – do you really want to spend your life working for an organisation that makes the world worse?

Betterness

Here is the problem that Haque is trying to address:

Big Question: what does it mean to live meaningfully well? If you accept the less-than-heretical proposition that our way of life, work, and play, while materially rich, might be leaving us emotionally, relationally, socially, physically, and spiritually if not empty, than perhaps just a little bit unhealthy; that it might be optimized for more, bigger, faster, cheaper, nastier over wiser, fitter, smarter, closer, tougher — how would we redesign economies, markets, and organizations to help us live better?

He suggests that we start by redefining what we are trying to achieve with our organisations.

Looking up at Mount Ossa and Cathedral Mountain

To do this, Haque says that “Going from business to betterness means going from vision, mission, strategy, and objectives to ambition, intention, constraints, and imperatives. To give you an idea of what this means, I’ve been using the book to think about what I’m trying to accomplish in my work. So I’ll walk you through what I’ve been thinking, which I hope will give you some ideas about how you and your organisation might change as well.

Ambition

Ambition replaces vision – and it answers the question “why are we here?” More specifically, ambition is meant to outline the kinds of returns you will provide, and to whom you will provide them. It’s based on delivering genuine value to people.

My Ambition: I will help make work better through encouraging innovation that matters – innovation that makes customers’ lives better, and which encourages strong, sustainable and interesting organisations.

Intention

Intention looks at how you will make the people you interact with better. How will you achieve your ambition? Which day-to-day activities will drive this forward?

My Intention: My work will help build innovation skills and strong networks to make firms more fun, resilient, adaptable, and sustainable. I’ll do by doing research that contributes to developing a genuine understanding of how organisations create value; and by communicating the results of this work in a way that will have an actual impact on the way people work – through teaching, through books and articles, through this blog, through speaking and through working directly with organisations.

Constraints

This is the trickiest one to get my head around. Constraints are the things that must not be done. Instead of trying to carve out a competitive advantage through executing a strategy, the betterness approach looks to build value by enabling customers. Constraints are about avoiding things that do damage.

My constraints: I will not: encourage innovation just for the sake of novelty; try to elevate my ideas by taking shots at others; get caught up in publishing for the sake of publishing instead of communicating to effect change.

Imperatives

Imperatives are simply the things that must be done daily.

My imperatives: I will: make evidence-based recommendations; share knowledge daily; have a positive impact on the people with whom I work.

Innovation Betterness

If you take these ideas seriously, you end up with what Haque calls behavioural innovation. In summarizing the research behind the book, he describes the organizations that were more successful:

Those who were able to create wealth were a new kind of innovator: behavioral innovators. Innovation is often conceptualized at the level of products and services, business models, or competencies. Behavioral innovators pushed the boundaries at a higher level. They made novel, different, innovative sets of decisions compared to current rivals and historical peers. These decisions weren’t one-offs, but consistent, repeated, and predictable: novel habits about products and services offered, investments seeded, people employed and goals sought, more sharply focused on elevating human potential.

This gets at another question that Steve Denning asked recently: Why Are There No Successful Innovation Initiatives?

In part, it’s because change is hard. As Gregg Fraley says in a comment on yesterday’s post – if innovation were easy, everyone would be doing it.

But it goes deeper than that: to have a successful innovation initiative, it’s not enough to just talk about the importance of innovating. It’s not enough to get some tools. To innovate successfully, you actually have to change how you do business.

This is one of the key points that Jeffrey Phillips makes in Relentless Innovation. He says that to embed innovation, you have to make it part of Business As Usual. That’s why we keep talking about the importance of linking innovation to strategy.

But if you do that, you are changing your whole business model. If you are genuinely committed to making a change, you end up changing your value proposition. Once you do that, everything else has to change as well.

I think that Haque’s Betterness principles can help with this. If you are going to become genuinely committed to innovation, you might as well start with your value proposition. If you work through defining clearly your ambition, intention, constraints and imperatives, you will have to embed innovation into your new Business As Usual scheme.

It took me longer than usual to write this post. I’m a bit nervous about stating my intentions as clearly as I have, and this is still a work in progress. But I hope that you will tell me if my ambitions are failing you, since the people here are a big part of who I am trying to have an impact on. If you have any feedback on how I’m doing, or suggestions on how to do it better, please let me know.

Here’s one last thought from Umair:

A life well lived is a consequence of human choice: the decision to pursue the significant over the trivial, the enduring over the evanescent, and the meaningful over the useless. So here’s my challenge – live one.

About Tim Kastelle

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

14 Responses to Innovation Betterness

  1. Matt Perez 12 January 2012 at 1:25 pm #

    Tim,

    Funny you should write on this subject. I also read Umair’s ebook and was thinking about when I ran into this site: http://www.ingenesist.com/

    Their aim seems to be to define/implement an economy based on social value, not just money. Interesting at first blush.

    I’d be interested in what you think of it.

  2. Tim 12 January 2012 at 8:01 pm #

    Thanks for the link Matt. There’s a few different projects like this on the go. That’s an interesting-looking one, though I’ll definitely need to spend some more time with it. I kind of don’t like that punch line in each blog post appears to be stuck in the videos. But I’ll watch a few to figure out where he’s coming from.

    The think I liked about Betterness is that it is pretty actionable, I think. And I pretty consistently find Umair to provoke useful thoughts.

  3. Ralph-Christian Ohr 12 January 2012 at 10:04 pm #

    That’s a meaningful and honest post, Tim!

    And another great example of how individual and organizational orientation may be linked, I think.

    My impression is – even without having met you personally so far – that you consistently act upon your ambitions.
    Thank you for sharing your valuable thoughts!

  4. Tim 13 January 2012 at 3:21 am #

    Thanks Ralph! A big part of doing this is that by laying out my ambitions a bit more explicitly, that I can use this to be more effective in choosing which work I do and which I don’t. We’ll see how it goes…

  5. Brian Driggs 13 January 2012 at 9:16 am #

    I’ve not read this one yet, but I am a BIG fan of Haque and what he stands for. I believe business should exist to make a difference. Profit should be a function of authentic, sustainable value – not clever accounting.

    Good on you, sharing your thoughts on this level. I can see the difficulty in constraints, but I’m also reminded of the importance of intention – if WHY isn’t powerful enough to inspire intent, it’s not very ambitious, is it?

    Looking forward to following along, Tim. Cheers.

  6. Tim 13 January 2012 at 10:08 am #

    Thanks Brian! It was an interesting post to write – I’m more used to keeping my ambitions to myself, so it was a bit strange to write this one!

  7. Bob Marshall 14 January 2012 at 9:05 pm #

    Nice post. Not too sure about re-inventing labels, but what the heck. All very congruent with The Marshall Model, of course. :)

    HTH

    - Bob @FlowchainSensei

  8. @nominee_artemis 15 January 2012 at 2:20 am #

    Enjoyed reading another perspective on Umair’s Betterness. I like the way you laid out your ambitions and how you are going to make a difference.
    I was first introduced to Umair’s way of thinking in his book The New Capitalist Manifesto – worth reading if you have not.
    My take away from both is the importance of sustainable value and believing that I can make a difference as one person.
    Rgds,
    Diana

  9. Phillip Long 15 January 2012 at 12:03 pm #

    Tim: terrific post and timely. We need to “reinevnt” the university, while we’re at this. I was just reading the Tom Peters announcement of the ‘Cliff Notes’ seies he’s putting out in 2012 of the past 30 years since Excelence, which he leads off with “Business has to give people enriching, rewarding lives …  or it’s simply not worth doing.” (Richard Branson). Seems rather closely aligned with the underlying thesis Haque is making. Odd source I grant you but ideas that converge from disparate origins tend to suggest something meaningful there lies.

    I realy like your personalisation of “going from vision, mission, strategy, and objectives to ambition, intention, constraints, and imperatives.” I’ll have to pick up a copy of Haque’s book but at first blush I’m not enomoured of the “constraints” category, & reading your interpretation makes me think this might be simply recognising “context”.

    To help me with making Ambition and Intention become daily considerations in terms of actionable behaviours I started using iDoneThis, which surprisingly helps. It’s rather like a personal implementation of Atul Gwande’s Checkist Manifesto (did you see he’s one of the selected TED ’18 min’ speakers this yea?).

    Thanks for writing this – one of the blogs I know I can count on make me really think.

     

  10. Tim 15 January 2012 at 4:33 pm #

    @ Bob – I am also hesitant to re-label, but it makes more sense in the context of the book where he makes a pretty good case for the contrast between the two sets of items. Glad to hear that it’s consistent with the Marshall Model!

  11. Tim 15 January 2012 at 4:35 pm #

    @Diana – thanks for stopping by, and thanks for the comment. I have read The New Capitalist Manifesto, and posted about it when it came out. I actually like Betterness more – I think Umair does a great job of building his case in it.

  12. Tim 15 January 2012 at 4:36 pm #

    @Phil – Constraints makes more sense in the examples he has from business, but it’s still the fuzziest of the four by far. I’ll check out iDoneThis, that sounds useful. I did see that Gawande is on the list for TED – looking forward to seeing that talk whenever it goes up!

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