Innovation: You Need to Eat Your Children

Another great guest post by John Maloney … thank you!

My old boss at HP, Lew Platt, like to say, concerning innovation, you need to eat-your-children. HP is famous for consistently having 80% of profits originate from products two years old or less. That requires the courage to kill (eat) products (your children) to allow innovation to flourish. As in nature, this optimizes the ecosystems. It drives profitability, growth and well-being.

Incredibly, in almost 2009, enterprise KM people are still talking about the obsolete notions of sharing, best practices and continuous improvement. (?) Ridiculous. Shameful.

Continuous improvement was important in the 80s as a temporal artifact of the quality revolution. It originated the notion of ‘best practices.’ Both are now 100% obsolete.

BTW, know who is a recognized master of both best practices and continuous improvement? Yep, General Motors, GM.  Today, right now, turn on the news and watch the GM CEO grovel and plead for tax money to fix the mess of US auto manufacturing caused specifically by excellence in sharing, best practice and continuous improvement. It’d be funny if it wasn’t so pathetic. If you hear these terms in your organization, run, don’t walk, for the exits to escape (and to save your life/career).

Today organizations must achieve perpetual innovation (PI). The new Big Three, Toyota, Nissan and Honda get it (and 54% of the US auto market to boot).

Perpetual innovation inhabits value networks. To achieve mastery, do not focus on information distribution (?) and incremental improvements like KM & quality circa 1990. That is a waste of time and resources. You MUST focus knowledge efforts on value network structures and patterns: roles, links, exchanges and OUTCOMES. Information, practices and improvements take care of themselves in well-configured value networks. See:

http://valuenetworks.com/public/item/219361

Also, please forget about sharing. It too is 100% obsolete. There is NO time to share anymore. Rather, focus on collective intelligence. Accept and lead knowledge-based organizations as markets; as the complex adaptive systems all organizations are. Embrace collective intelligence networks and markets to achieve perpetual innovation. See:

http://www.pmcluster.com/SFO09.htm

Sadly, KM people and orgs are nostalgic. They struggle badly to let go and to focus on the future. They are on the same slippery slope as corporate IT – preserve the past at all cost. (Fully 80% of today’s IT budget goes to supporting legacy apps. Disgraceful.)

KM, IT and organizations fight hard to keep the past and sabotage innovation. Newsflash: They are very good at it! However, sooner-or-later they always lose, to be subsumed by the natural order of value networks and collective intelligence. (It is happening in Detroit as you read this post…)

To move forward, KM and their kissing-cousin, corporate IT, need to heed Lew’s advice, and kill their sacred children of sharing, best practices and continuous improvement.

Post Script from Michael:

In an era where inputs (including financial capital), technology, IP and brand become commodities in very short cycles, I think the problem must be addressed in very practical terms and it is concerning far beyond GM.

In this context, human resources become the source of competitive advantage more than ever.  So is it a race to the bottom or the top?  Ultimately comparative advantage from cheaper labour is a no win, so we can probably agree that innovation is the key.  John is bang on.

Is there anyone reading this that does not recognize that the new consideration is that broadband connectivity is scaling up and making visible the value networks in corporations that Verna Allee & Valdis Krebs have been drawing attention to for years?

Here are a couple of blog posts with additional thoughts:
http://socialcapitalvalueadd.com/2008/11/20/iam-or-social-media-man
http://memeticbrand.com/2008/12/01/memetic-brand-social-capital-value-add-start-socializing

SCVA, unlike brand valuation, is not linked to particular lines of revenue.  This is a model that attributes value to the sources of innovation and growth in a corporation rather than, for example, a commodity like tobacco or cars.

I think a model like this give the corporation the incentive to “eat its children” or switch revenue lines.

It is a happy economic coincidence that optimizing social networks requires hope & empowerment over fear & ignorance because in a hopeful environment informed individuals take risks. Publishing distinguishes emitters.  When they discover better ways, their peers emulate across the network. If fear & ignorance reins, productivity suffers.

7 Responses to “Innovation: You Need to Eat Your Children”

  1. Michael Plishka Says:

    Planned obsolescence really does need to be planned. This also means there needs to be a ripe pipeline of innovative new products. That’s where too many companies do poorly in sufficiently stocking up the pipeline so that they aren’t hanging all their hopes on one product to carry them for the next 5-7 years.

  2. homeBiscuitsAndGravy Says:

    this is the kind of blog post that gives me the worst case of gas…”eat your children”, or rather, “eat your young”, is phrase coined by Brian Tracy back in the nineties, possibly earlier…nothing worse than people who rip off others ideas…pass the Beano.

  3. Michael G. Cayley Says:

    biscuit&gravy – how about a summary of how Tracy’s work relates to this post a link to be constructive??

  4. Michael G. Cayley Says:

    Michael,

    I think there is a difference between planned obsolescence and what we are talking about. You arrive at a similar conclusion. Perhaps a company that “planned” well as you describe would need to have culture & practice as we have described.

    I suppose Apple is practicing planned obsolescence at the moment. Is this a sustainable strategy? A possible line of attack against them?

  5. Simon T Small Says:

    I am an advocate of innovation and am constantly trying to keep innovating… however, this strategy is not right for everyone necessarily.

    This is something everyone should be doing, in their career, family, department or project… Sun Tzu is possible the best strategists ever. Read Sun Tzu’s Art of War, and you’ll understand, but one small snippet relating to this post is to first consider your position (A) and goal (B), then you can developer a plan to get from A to B…

    Your position comprises of the following attributes across your organisation and your competitors or partners:
    1. Leadership – strengths and weaknesses
    2. Skills – things the organisation is good or bad at
    3. Territory – things the organisation owns/controls (clients, money, staff, IP etc)
    4. The environment – Opportunities and threats

    Once you’ve evaulated your position, you’ll have a pretty clear understanding of the best way forward, and that may be innovation.

  6. Michael G. Cayley Says:

    Simon,

    I read & wrote about Sun Tzu’s Art of War before heading out for five years of living in China. It is a great work.

    Positioning was also a key take away for me, but we need to be careful about the “War” metaphor and about imposing Western notions of “Leadership” on martial philosophy.

    I believe that if Sun Tzu were to consider the “position” of the modern diverse, multinational corporation – he would want to consider first and foremost its positioning within broader social networks and how value is derived and/or defended through these networks.

    “an era where inputs (including financial capital), technology, IP and brand become commodities in very short cycles” is a generalized assessment of position as you have described it. Each individual or corp will make their specific assessment within this context.

    The question is how do you herd cats? I.e. equipped, empowered, self-determined individuals. How do you make an organization that is full of and surrounded by empowered people more productive?

  7. The Wizard of Oz is a Carny: the Macworld or Jobs question? | Social Capital Value Add Says:

    […] survived long enough to eat it’s children, i.e. switch from being primarily a computer company to become a consumer electronics giant, […]

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