Wednesday, March 07, 2007

When will they learn?
Innovation without value creation is just wheel-spinning...

Forrester Research recently announced a new survey that looked at innovation from a macro level - this is an excerpt from InformationWeek :

"Investing in knowledge -- a term that in this context encompasses funding for research and development, higher education, and software -- is seen as a way to create national wealth, enhance geopolitical power, solve social problems, and bolster national pride.

Developed nations spend an average of $1,270 per capita yearly to improve knowledge yet fail to achieve the desired benefits, according to Forrester's study.

The U.S. spent almost $300 billion in public and private money on R&D in 2003, about half of all R&D spending by the 30 member countries of the Organisation for Economic Co-operation and Development (OECD). America can claim 35% of all patents filed in Europe, Japan, and at home. But such spending doesn't create jobs or boost the number of goods and services produced by a country -- also known as the gross domestic product (GDP)"

Why is it taking countries so long to realize the best practices of innovation learned long ago -- often through hard failures -- at top companies worldwide? Unless there are goals or a clear focus on creating value, there's no reason to start innovating. Have we learned nothing from the failures of the Knowledge Management era?

Knowledge intensive initiatives that don't focus on targeted and directed creation of actual benefits and value will waste the time, money and goodwill of workers, partners, customers or taxpayers. This applies equally for companies seeking bottom line dollar value or governments seeking socio-economic benefits.

From a corporate standpoint, companies too often set out fluffy so-called "innovation" projects purely to check a box on the next annual report. These 'keep up with the Joneses' attempts have no aims, no metrics, no focus on solving a particular issue, and worst of all, no plan to impact the bottom line.

These "lazy innovators" are shocking only in that the executives leading the charge must have (again) fallen victim to unscrupulous consultants, vendors, and yes-men who are too scared or inexperienced to point out obvious flaws. Too often, the only objective is increasing employee participation, or hunt through a tub of random ideas that might contain one tiny golden nugget.

"Innovation" has tons of definitions but I have yet to see one from any credible source that doesn't involve "creating value" as a key factor. Leading innovators -- Whirlpool, Coca-Cola, Pfizer, and Google -- recognize this vital point. Without a clear value objective, what follows is failure, finger-pointing and a laundry list of other problems including:

-Loss of respect from senior staff who only see a frivolous cost center to be cut at the next downturn.
-Indifference and scorn from employees, suppliers, customers, and participants whose time and good intentions got wasted. Plus the frustration and disappointment when no action results from their intellectual input.
-Anger from shareholders who see money wasted on initiatives that could deliver great value -- and often do create benefits at other organizations -- but are child's play for a team that knows how the game is played.

For governments, the message is the same - just replace the word "taxpayer" for various stakeholders. The wrong-headed belief that more money will solve the woes at universities and other research facilities has meant years of throwing money at problems that don't respond. Maybe there's a golden nugget there in an overlooked patent application . . . .More likely, it's another expensive misadventure from people who haven't learned their lessons.

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