Erik Micheelsen on Simple Systems Innovation

In a recent conversation with someone I know, a remark fell regarding a Danish medico company (OMX C20) who for years and years have done very well.

That medico has during the past five years seen their market lead deminish. The executives of that company have so far cut back and Leaned out.

Today, leaders and employees who are not 100% allocated “core business” are no longer with the company. That means that the whole of the out-of-the-box creative layer has been sliced away.

This spring, the same medico asked their customers (as they always do) how they compare with competetor products. The answer was “we can’t see any difference between you”.

Now they are faced to bring themselves ahead. To set the agenda in the market. To find their edge and seize winning strategies. You’ve heard it before.

Except for this one! An executive at this company said just a couple days ago “we will reach our vision through incremental innovation”.

Now, I happen to know the vision, and it’s truely a radical innovation. It’s right there next to implementing the flying car as the standard transport vehicle.

The question on the table is “can that be done?!”

The answer in short is absolutly no way!!

I’ll tell you why. Incremental innovation by definition means “small transformation”; you keep the design, the function and the form.

Change any one of those (function, design or form) and you got radical innovation. Radical innovations don’t have to be huge folks! They simply introduce a new degree of freedom. That’s all. But that is also different than simply improving.

For instance;  if we are looking at, say, “Buying shoes”, well, we’re all used to going to the store. Buying them on the internet is a transformative innovation because it not only introduces a new degree of freedom. It acutally defines a new degree of freedom: That degree of freedom didn’t exist “just a moment ago”. The downside is that when you both define and introduce a new degree of freedom, your customers wont have a default practice for working with that degree of freedom. For the same reason only about 10% buy through the internet.

Obviously, you gotta make a half-way-point before or at the same time as introducing you’re transformative innovation. Who doesn’t get that? Take the introduction of the computer. Now how the heck do you work them?? Nobody knew at the time. So why didn’t that introduction become a HUGE failure? Because people could be entertained with the computer in a way they had never been entertained before. But to get there, people had to figure out how to work with this new degree of freedom.

Another way to introduce how to work with a new degree of freedom is to introduce things in small chunks instead of the whole package at once. For this program to work your company must design the whole of the package. That means that you know what the WHOLE of the transformative innovation is!!

If you instead take an existing product and alter this or that (from a customer need perspective or by technology introduction), what you’re really doing is keeping to the product you have. That is true until either the design, form or function is changed: A new degree of freedom is introduced).

Philips Europe got this point when they looked at TIVO. TIVO introduced an all hardisk recording unite to replace the ol’ VHS. But the jump was huge (transformative innovation).

Philips Europe introduced first a VHS/DVD and then DVD + DVD/harddisk. BUT the transformative innovation was actually well known by Philips.

The products and services your business has now follow a rule. Incremental innovation will keep you WELL within those rules. Radical innovation and transformative innovations will break those rules and introduce new ones.

Now either you break them or you don’t. Did I say “can’t”?

Here’s my final point. You can’t play it safe.

CK Prahalad has made a brilliant point about the bottom the pyramid, which is that the 4 billion poorest people of the world who live for less that 2$ a day should not be seen as victims. Look instead at them as tomorrows middleclass.

This argues for business in the developed world to work on innovation from the point of view of aiming at third world needs. Obviously, looking to new and emerging global markets is attractive. But where is the gateway? And what are the steps to adressing these kind of markets? Today, the best answer is still CSR or CSI, using for instance UN’s Global Compact program.

The CareCubicle program looks at the whole of this topic pragmatically from a very different point of view. The CareCubicle team is really looking forward to show you how it works, which should be sometime next year.

What we want to show is how you can make a web based program that asks the people with the need to state the needs. Most likely through NGO’s or other help organizations.

Then have ordinary people and specialists called upon to build amazing social innovations right there on the internet! This has not been seen before.

And through a whole new micro-investment model; have the design of the innovations listed in such a way that businesses can pitch in with tangible resources to bring those innovations into reality.

Now, when the local population is involved in implementing those innovations, we have a bottom of the pyramid strategy. But why stop there with something good when we can something that can be astonishing.

The thing is that this kind of thinking is of a world that is evaporating before our very eyes. It is the idea of capitalism 1.0 and the idea of “us” versus “them. Today, things are different. I’ll save that discription for a later post. Here, I’ll just note that they have knowledge and knowhow that so far has been just as inaccessible as ours has been to them.

Business wise, the question from the developed question has always been how to argue bottom line for such a strategy. I wont say that it has been left unanswered because that is simply not true. The consequence for business venture is a “fend and figure it out for yourself” situation.

This is where CareCubicle is really interesting. We argue that once a social innovation has been delivered by a combined effort of businesses, organisations and network of individuals – the same innovations can be re-designed to address premium markets. And the network that helped innovate the social innovation is still there to co-design and turn that social innovation into products and services.

A quick example. Let’s say someone comes up with a whole new tent/habitat for refugees. Energy producing, water preserving etc. Now let’s re-design it; We could aim at traditional campers. We could also aim at wilderness campers and certainly extreme exploreres (mountain climbers or trips to the north pole etc).

This is just the beginning. We have many many many very practicle ideas we think will make heads spin. What we would like to say now is that Bottom of the Pyramid strategies are no longer about THEM buying our stuff. They are about all of us combining efforts to create a whole new level of social innovations.

What is peace? What does “getting the job done” mean when it comes to achieving peace? And one more question – do you need to be a saint to get the Nobel peace prize?

I write mainly about innovation and there is one specific topic where Obama’s prize is a great case. The topic is pattern-breaking.

Tradition has it that the Nobel peace prize is given as recognition for achieving peace where it was thought impossible. Obviously, this means a situation that has demanded a lot of work and struggle. A situation with suffering, pain and loss.

But what if you just happen to stroll in and people align and head in a commen and highly constructive direction. So no struggle, pain or suffering. This has to be the better option by far.

However, recognizing the individual with this kind of impact is difficult because you as the observer have nothing to compare with. All you see is peace. You will not have witnessed a situation with turmoil and then see that situation rectified. Nor will you have seen anyone who – like a saint – has “sacrificed” him or herself to alleviate pain and suffering.

The Nobel prize commity in Oslo must believe that they saw Obama strole in and instantly made this kind of difference to the benefit of all of us.

I think most of you know that I’m working on the CareCubicle program. A crew of people are working their b…s off to design the webbased platform. It’s really looking good!

But what is it? What is the CareCubicle program? Very simply put, it’s about a bunch of people co-creating infrastructure based on a need as dictated by the people with the need.

Here’s someone who really gets it! Enjoy

Cameron Sinclair on open-source architecture