Software is Eating the Innovation World

“In short, software is eating the world”, said Marc Andreessen back in 2011. Marc, a savvy entrepreneur and investor, was quick to note how software companies were not only some of the most valuable ventures on the planet but also transforming just about every known industry from manufacturing, agriculture, transportation, banking, medical devices, entertainment, etc. – even high-tech hardware is being differentiated by software.   Software is eating the world because it is GOOD, i.e. an equalizer, a connector and a plus-sum value creator.

Service businesses have perhaps been the last bastions of resistance against the inevitable invasion of software, but that’s also changing (We’ll eventually have widespread EMR’s, legal documents scanned by robots, you see what’s happening w/ hotels and taxis, etc.).   Next on the list for software domination is innovation management!

Innovation management couldn’t be disrupted by software before it could even be defined as a ‘thing’, much less a useful tool.   But we’re finally there in a couple of areas of innovation management where common definitions and belief, if not proof, in value have been mostly realized.

Most corporate innovation supporters and practitioners now believe in three fundamental engines of innovation:

  • Employees
  • Customers
  • Other Innovators

Employees

Perhaps it wasn’t blatantly obvious before but companies don’t innovate, their employees do.   Ideas come from people, but most importantly (cause I suppose they can come from a robot at some point in time), ideas can’t fight for themselves for attention, funding and support – they need champions (call these champions entrepreneurs if you will, although that’s a restrictive term if you equate it simply with founders vs. all the other people needed to develop and idea and realize its value.

Another crucial insight was to wake up to the fact that although we know employees innovative, we don’t necessary know which ones a priori – all have the potential as far as we could tell with any certainty (we certainly can’t prove that they don’t have that potential).

So the next step is to systemically allow for ANY SELF SELECTED employee-innovator to thrive, under a fair, competitive environment, of course (no reason corporations should be any different from nature). When it comes to the innovation game, we’re finally agreeing upon useful and proven risk-management methods and tools to help employees generate ideas, test ideas, pitch ideas, prioritize ideas and implement ideas.   We haven’t learned to get rid of parasitic ‘corporate politics’, but nevertheless, we’ve made progress in allowing and recognizing the value of an innovation culture vs. a ‘not my problem’, let the company continue it’s path of obsolescence culture.

Those basic premises of employee driven innovation, openness and risk-management methods and tools have allowed the forward-thinking innovation practitioners to facilitate and partially automate the process through software.   That part of the innovation software world is called Idea Management, but might as well be called the no-brainer management software tool that all corporations, government agencies and NGO’s should adopt – If your company doesn’t have one of these, run for the doors!

To engage employees in innovation, in a non-elitist fashion, companies need some form of crowdsourcing, collaborative software solution.   There is a lot of behavioral-intelligence that can be built into the software so as to inspire and sustain engagement – hint: borrow from contests/gaming, but of course, the software needs to operate within a total system of support for innovation – namely the desire to bring additional sources of happiness to humanity AND to take risks in doing so, aka, all-in commitment to innovation, not commitment to patronizing employees.

Leading players in this part of the innovation software world include Spigit/MindJet, Venture Spirit, Nosco, Bright Idea, Hype, Idea Scale, Brain Bank, Challenge Post, Soapbox, Skiild, and others I’m not yet familiar with that certainly deserve as much attention.   Some companies have decided to ‘adapt’ collaborative platforms for employee ideation/innovation management…hum!??… I don’t know about that.. Seems like you should get the right tool for the job – a purpose made product which includes thoughtful features on increasing participation, vetting ideas, enlisting help/collaborators, and gaining traction/support for implementation – talk alone is cheap (and lies are expensive!) – the tool has to lead to truth seeking, requiring some walking, post talking.

innovationmanagement

Customers

Most innovation methods put customers in the center (human centered innovation).   This certainly applies to the ‘Search’ (Design & Agile Development) phase of the innovation process, but also to the preceding ‘Insights’ or Ideation phase and also to the proceeding ‘Scaling’ or execution phase (some controversy as to whether you need to ‘formally’ collect customer insights to be inspired and generate an idea – I personally don’t think that’s a necessity, although it is one of the useful idea generation techniques, along with trends/foresight, technology lifecycle analysis, personal experiences, connected thinking, effectuation, brainstorming, etc.).

Most would agree with the notion that innovators innovate, but customers validate – therein lies the primal opportunity for software tools – to make the process of validation more effective and efficient.   Before you validate – and you must first believe that novel ideas are nothing but a set of untested assumptions that need some form of in-market validation – you need to talk to customers!   To talk to customers, you need to find those customers!   Software can greatly improve the process of finding customers AND keeping a customer community group engaged in rich-dialogue for prolonged time period (aka, co-creation).

Software can also be critical in setting up and measuring the impact of customer validation experiments throughout the three critical steps of ‘Search’: Searching for the right Problem worth solving, searching for the right Product/Market Fit and searching for the right Scalable Business Model. An example of what a software package could do is help to quickly set up the proverbial ‘landing page’ to test one’s raw idea for interest (Problem Worth Solving), but also more elaborate prototypes to test for preferences/features (Product/Market Fit) and eventually testing the intent to purchase (Scalable Business Model).   Customer innovation management software should also be connected to the everyday software worlds where customers hang out, namely social media (and should also tie-in to the employee idea management tools mentioned above).

Leading players in customer-innovation software world include Lithium, Think Passenger, Sterling Brands, LiquidGrids, Strategyzer and Javelin. There are certainly many others, with various industry or phase of innovation specialization.   Again, the good ones understand how their software helps innovators with three critical tasks – Uncovering and distilling Insights from customers that help innovators generate high-opportunity ideas, Searching for the true potential of the ideas (through extensive testing), thus de-risking the ‘build it, but no one will come’ outcome, and finally high-growth Scaling (getting in front of target customers as fast and as cost-efficiently as possible (and thus testing Customer Life Time Value vs. Customer Acquisition Costs)).

Other Innovators

The other externally fueled innovation engine is Other Innovators, aka Open Innovation. Companies have begun to realize that the world is their lab, that they can connect with others to gain more efficiency out of their internal innovation engines as well as more efficiency out of their customer engagement efforts detailed above.   Other innovators include independent inventors, university and research labs, large established companies, and ever more often, startups (the trending starlets in this group for sure).

Connecting to Other Innovators essentially began as a scouting job, a transactional type of activity, but it’s quickly becoming a strategic, long-term relationship building activity. This effort can easily become very labor intensive unless software comes to the rescue – software helps to add scale, breath, depth and especially speed to the process of collaboration and multi-entity co-creation.

This software world began with the Open Innovation Platform intermediary pioneers, namely Innocentive and NineSigma, and since evolved to include other players such as Inno360, yet2, InnoGet, etc.   Valuable players in this space will move beyond the transactional value-add and deliver on the promise of helping to build lasting strategic relationships with outside entities, growing and securing their respective networks into a lasting competitive advantage.   Helping to match-make is certainly an important part of the job but so is helping to streamline common agreements (from NDA, to co-development, to investments, etc.), tracking value of collaborations, tracking value of expanded network effects, etc.

The huge, unconquered holy-grail opportunity here would be to help clients co-create NEW, highly impactful new growth platforms (bold innovation), not simply productivity improvements to R&D within the existing core business.   The place to start is to understand how large companies need startups and vice-versa – to facilitate the process of strategic partnering, not simply corporate venture capital or physical space incubation – but how to ensure large companies and startups can co-create new businesses together, better than they could on their own. It is a numbers game, if one is playing the bold high-risk game – the numbers game can be made more efficient through software.

Takeaways

  • Innovation Management will be eaten by software – it’s a matter of time
  • Three areas of innovation management poised to benefit from software are employee driven innovation, customer driven innovation and partner driven innovation – If you believe in any of those engines, you should make them better through software
  • Great software companies are already out there ready to help corporate innovators, and there’s plenty of opportunity to start more
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