{"id":1429,"date":"2016-12-07T00:01:17","date_gmt":"2016-12-06T23:01:17","guid":{"rendered":"https:\/\/www.druckerforum.org\/blog\/?p=1429"},"modified":"2016-12-05T09:25:54","modified_gmt":"2016-12-05T08:25:54","slug":"do-you-have-a-value-creation-playbook-no-by-curtis-r-carlson","status":"publish","type":"post","link":"https:\/\/www.druckerforum.org\/blog\/do-you-have-a-value-creation-playbook-no-by-curtis-r-carlson\/","title":{"rendered":"“Do you have a value-creation playbook?” “No.”
by Curtis R. Carlson"},"content":{"rendered":"

The\u00a0Drucker Forum<\/a>, led by Richard Straub, is one of the world\u2019s most important conferences on innovation and entrepreneurship.\u00a0It honours Peter Drucker, the genius who laid the foundations for modern management. \u00a0Each November it is held in Vienna, Austria where Peter Drucker was born in 1909.\u00a0 Many of the world\u2019s thought leaders and practitioners are there to share progress on these increasingly important topics.<\/p>\n

During my talk, \u201cCreating an Innovative Enterprise<\/a>,\u201d I asked the 500 participants if their staff were given a value-creation playbook along with innovation training so they could be effective value creators.\u00a0 Only 5 people raised their hands. \u00a0(My presentation is here: \u00a0drucker-forum<\/a>.)<\/p>\n

This is a striking result given the quality of the group, but it is typical of what we have discovered around the world.\u00a0 Companies train their staff on project management, design-for-six-sigma, teamwork, leadership, negotiation, and many other topics.\u00a0 But still not innovation.<\/p>\n

As Peter Drucker said, \u201cBecause the purpose of business is to create a customer, the business enterprise has two \u2013 and only two\u2013basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.\u201d\u00a0 To do this, we need to move from the \u201cwhat\u201d of innovation to the \u201chow.\u201d\u00a0\u00a0How<\/em>\u00a0to liberate creativity,\u00a0how<\/em>\u00a0to create a transparent organization, and\u00a0how<\/em>\u00a0to make high-value innovative results inevitable.<\/p>\n

We are in the global innovation economy.\u00a0 Technology improves exponentially fast, the world is hyper-competitive, and it has an abundance of major new opportunities.\u00a0 Almost every area of business has endless opportunities for major innovations. Consider the financial industry and emerging technologies such as block-chain.\u00a0 The waste in the financial industry is estimated to be trillions of dollars per year. \u00a0Eliminating this waste represents hundreds of opportunities for major new innovative companies.<\/p>\n

But to develop these opportunities we must know how to innovate.\u00a0 Today, relatively few professionals have those skills.\u00a0 Big companies are going away at record rates, more U.S. companies are dying than being born, and almost all measures of innovative output are grim.<\/p>\n

Typically, experience shows that 80% of the so-called \u201cimportant\u201d company initiatives create\u00a0no value<\/em>\u00a0for the company.\u00a0 Most university \u201ctech transfer\u201d programs lose money. Even the name is wrong.\u00a0 Tech push does not work.\u00a0 National laboratory directors around the world will admit in private that, despite their huge budgets, they are frustrated at the lack of useful results produced.\u00a0 The waste of money and people\u2019s potential is enormous.<\/p>\n

Remarkably, as noted above, most companies do not use effective innovation practices.\u00a0 Almost every CEO will say they do, but if you ask mid-level managers to describe their system, they can\u2019t. \u00a0If they can\u2019t, there is none.\u00a0 That is what we find around the world \u2013 it is almost\u00a0an iron rule.<\/p>\n

That has started to change but only at the margin. \u00a0Agile and its derivatives are being increasingly adopted, but mostly for developing\u00a0incremental innovations. NSF created I-Corps to teach students about value creation. Start-up incubators are promoting more rigorous practices. \u00a0And the US NSF and Singapore NRF are working toward use of\u00a0better value creation practices. \u00a0 But these efforts have still not broadly taken hold.<\/p>\n

As we make progress we must also drive out bad ideas. \u00a0For example, I constantly hear, \u201cTo succeed at innovation you need to fail fast.\u201d\u00a0 That is a terrible idea. It is meant to be clever, but it gives no guidance about what to actually\u00a0do. \u00a0The goal of successful innovation is to learn, search, and create fast; not fail fast.\u00a0 That learning perspective defines the concepts and practices required for innovative success. \u00a0Every concept and methodology should be judged on whether it increases effective learning.<\/p>\n

The innovative enterprise embraces a number of essential principles:<\/p>\n