Business Intelligence Processes

Innovation and ‘learning organisation’ (1)

The emergence of innovation is linked to the action of two engines:Forecast

°         Responding to needs identified in the market. This is often called ‘Pull’ mode. That’s to say, market forces or customers are pushing the innovation, based on two techniques:

  • Market analysis techniques, segmentation and detection of needs. Using the information and signals provided by the market or market segment and the global environment.
  • Techniques to hear and interpret the “voice of the customer” or directly address their demands. May be initiating a joint innovation project with a client, or use the information obtained listening and interpreting the client and deciding to respond to the identified needs, with the required functionality.

°         The other motor is imposed by the application of new technologies to market. This is often called “Push” mode. That is, innovation in this case is brought, somehow “imposed” on the market by the progress of technology. You can also distinguish two ways:

  • New concepts or designs presented to market as a new product or service which are emerging from a scientific or technological leap. We start from an “invention” or change in “paradigm” to seek a place in the market and create a market demand.
  • The “natural” development of existing technology leads to try and design new products and / or services, one of which is decided to launch.

In a purely “Push” case and in the first way, we can speak of a break with what exists in the market. On the other extreme, in the case of a purely “Pull” innovation, we can speak of an adaptation for a client or segment to which we have applied techniques of “voice of the customer”.

In fact, most successful innovations arise from the combined action of the two engines, a mixture of “pull” and “push”. To adequately feed the flow of innovation, it is necessary to expose the people, internal actors of innovation, to the continuous contact with external stimulation. The concept of open innovation (Open Innovation), created by Henry Chesbrough[1] in 2003, became a new innovation strategy under which companies are going beyond the limits of its internal organization and where cooperation with external professionals and alliances happens to have a role. That means combining internal knowledge with external one to take forward the strategy and R & D projects.

Nothing new really, just finding an structure to something that has been done ever. In this context, universities and research centres offer new perspectives and solutions to companies using this model. Such innovation responds to the possibility of cooperation in what is known as collective intelligence. However in practice, companies have faced two difficulties:

°         First, many companies have not yet resolved the issue about how to capitalize on their own, internal knowledge. A very explanatory example would be the difficulty that many companies face when people of highly technical, key experience and knowledge is leaving the company or retiring. In many cases, there are not even organized a process of transferring its expertise to other members of his team or the organisation.

°         The second difficulty is the level of knowledge shared. Sbeiby[2] already noted that “shared knowledge double knowledge“, but this does not seem to be common practice. Quite the contrary, it looks like that “information and knowledge is power” and therefore better to keep to oneself. In this culture, companies do not have an integrated system or process to capitalize and share knowledge. The success of these processes obviously depends on the people and especially the management practices which are observed by all. Many internal awareness campaigns or presentations can not counteract the effect of a real and practical example of the behaviour of a member of management. The culture of open innovation, builds in a day to day basis and result in habits creation. This process helps to create and consolidate a true “collaborative intelligence” in the organisation, which is the basis for the “Intelligent organisation”

The learning organization

Intelligence organisations en A ‘learning organisation’ has been defined as one that is capable of learning. Since knowledge and experience are both internal in the employees, and external, it is logical that the organization is prepared to learn from their own employees and from the relations and environment. Another characteristic of the ‘learning organisation’ is that takes care and facilitates the learning of all its members. According to Senge[3], the ‘learning organisation’ shows five characteristics that define itself:

°         Engagement in learning by individuals and teams inside the organization to develop their expertise. People only get the dominion of his profession devoting to continuous learning. Organization encourages and supports the ability and motivation to learn.

°         Learning in teams. Team learning is vital because in modern organizations the fundamental learning unit is the team, no longer the individual.

°         Shared vision. The development of a shared vision is important because it creates a common identity that provides focus and energy for learning. This vision can be hindered by traditional structures where the vision of the company is usually imposed from top.

°         Mental models. The ‘mental models’ are assumptions, deeply rooted paradigms, generalizations and images, often unconscious, but influencing the way of understanding the world and acting. Working with mental models starts with turning the mirror from the inside to outside: learning internal images of the world, to bring them to the surface and subjected to a rigorous analysis . It also includes the ability to engage in open discussions where the search is balanced with confrontation and influence of others.

°         The organization is seen as a system. The human organizations and therefore firms are systems. Actions in them are interrelated and take time to fully exhibit their mutual effects. As people are part of the system, it’s doubly hard to see the whole pattern of change. ‘Systems thinking’ is a conceptual framework, a body of knowledge and tools that has been developed in the last fifty years, to clarify the overall patterns, and to help change them. P. Senge calls ‘system thinking’ “the fifth discipline.” It is the discipline that integrates the others, fusing them into a coherent body. In this 1st post we discuss the capture and organization of information and knowledge as the first step in learning.

This is the so-called intelligence, in the sense of finding valuable information and is what is called surveillance. Surveillance has the sense of being aware of the changes that occur in a particular field of knowledge. The most common and well known is “technological surveillance“. First, it means opening up to the outside, manage information and promote continuous relation between inside and outside. Being a learning organization, is placing sensors at the right place and that they emit the right signals to those responsible, at the right time, to take good decisions. The learning organization is one that captures the information and knowledge, internal and external and is able to fix it on their systems, their know-how and processes, one that is continually reconfigured and offers individuals and teams a place of motivating and harmonious work.

Challenges of economic intelligence

Executives are used to look sensors of information to understand the external environment and distinguish between opportunities and threats: It is called surveillance or intelligence. The most common are of two types: economic and technological. The two types of intelligence are essential and need to be structured, but few companies do it effectively, not due to lack of resources but often to not effectively manage information and knowledge. Inside matrix of knowledge generated is often forgotten or not known within the organization, therefore capitalization of know-how, which should be integrated into the management process with a global approach. The control of information should allow the company to understand, from the analysis of external weak signals and internally generated by their own experience, where it stands and how it will be possible to generate and sustain competitive advantage.

How to organize the activities of ‘intelligence’

Intelligence activities or surveillance start with the opening of the company to the outside world, understood globally, and facilitate knowledge sharing within and between inside and outside. It is necessary but not enough. We can list five functions of surveillance:

  • Opening to the outside.
  • Adapt to changes in the environment
  • Anticipating the evolution with a better understanding of the forces driving this change in the environment.
  • Reducing risks in estimates and decisions
  • Encouraging creativity and imagination of the future.
  • It’s necessary to understand to act. Or according to K.E. Sveiby[4], knowledge is capacity to act. Therefore raising knowledge we increase the capacity to act.Inteligencia económica y vigilia en To drive the innovation nimbly, the company should focus the surveillance activities in four main directions:
  • The market. And especially the sector and segment in which we operate. The trends, structure, development, history, identifying opportunities, knowledge of the actors, the extended supply chain, influences, regulations … etc.
  • Strategy. Analysis of power relations in the different segments in which the company operates. °         Supply of products and services. Value propositions. Analysis of existing offerings, their values, as they are perceived by the market… etc.
  • Technology. Often is seen as the primarily surveillance. Analysis of evolution and potential progress of technologies used or that we can use, prospective study of the impact of emerging technologies, new paradigms… etc. The first three generally fall into what we call economic intelligence and consists of a number of components closely related. In the next post we will advance in the topic.

[1] Henry W. Chesbrough: (2003): Open Innovation. The New Imperative for Creating and Profiting from Technology, Boston: HarvardBusinessSchool Press
[2] Karl Erik Sbeiby. A knowledge-based theory of the firm.
[3] Peter Senge. MIT. (Massachusets The fifth discipline.1992.
[4] Karl Erik Sveiby.

Author

Francesc Guell is the owner of this site. He was CEO and director of international companies in specialty chemicals and pharmaceuticals. The last 12 years was associated with international consulting groups, providing advice and support to businesses on topics such as innovation and agile innovation processes, operational excellence, knowledge management, change management, strategy and integrated business management. Currently creates and presents courses and workshops on these topics. He graduated as a chemical engineer, postgraduate from ESADE Business School in Business Administration and Master in Knowledge Management. He participated in numerous programs, seminars and ESADE, IESE, EADA, APD and MCE (Management Centre Europe). He is author of articles, presentations and courses on innovation in strategic management, integrated business models, knowledge management, performance measurement, change management and excellence in business processes. See more in: Professional Profile