Innovation Cycles: Open and Closed
By Michael S. Slocum
Uroboros is the Latin word for “tail devourer.” The image is that of a mighty dragon swallowing its own tail. It is typically used to represent cyclicality or the concept of infinity. This image connects to the fact that innovation happens cyclically – from the perspectives of preservation and evolution. One innovation sparks the creation of a family of derivative products and services. Certain innovations may generate entire industries and sometime even a revolution. Innovation in the current product/service portfolio helps to extend the period of profitability for each portfolio item. This generates stability and economic resources for the company. These resources fuel the continued preservation of the economic and service missions of the company. This places the company in a position where it can also afford to target new markets and other expansion opportunities that will allow the company to evolve. Innovation begets innovation. Preservation drives evolution. Both are required for the long-term survival of a company. The needs of the customer are met and profitability from that exercise is maximized. The needs of society may be met as well as innovation drives development if products/services intended to meet the evolving needs of society. These become the next group of clients.
Enthalpy: Endothermic and Exothermic
Enthalpy is the thermodynamic potential of a system. Some systems absorb energy during reaction and those are endothermic. Others produce energy and they are exothermic.
The endothermic reaction is descriptive of a system where Gibbs free energy (useful work) is greater than zero. In our innovation model, the endothermic system is equivalent to the closed innovation model. In the closed innovation model the company aligns its innovation resources to search internally to find an innovative solution to a problem. At this point the challenge becomes one of adaptation. This method is effective for preservation work. Using the existing body of knowledge and expanding the points of application is energy conservative. This is the main method of problem solving in the innovation cycle.
The exothermic reaction describes a system where Gibbs free energy is less than zero. In our innovation model, the exothermic system is equivalent to the open innovation model. In the open innovation model the company is utilizing its resources to leverage the best idea possible disregarding the origin of that idea. This model requires a divergent foray into a much larger potential solution space. Finding a solution here may create a significant burst of smaller innovations that are still important. This type of innovation also creates many opportunities for preservation innovation using the closed model. In this situation, the closed and open models are used to drive growth and leverage existing intellectual property. Using these two systems cyclically is similar to a closed thermodynamics system. This maximizes efficiency and minimizes waste. It also drives the preservation and evolution of the business. This creates an ambidextrous response to the innovation problem and prepares a company for long-term survivability.
Innovation causes a rebirth in an organization across many levels. New product/service innovations create new needs for DMAIC. These opportunities create new scenarios for structured innovation to be applied at the tactical level. And the cycle continues. Also, new portfolio items can create the need for revisions to the strategic plan. This develops a ripple of energy throughout the system and can energize the company to an excited state where mediocrity can be avoided and change can be sought after in a focused and organized manner. A system in equilibrium is leveraging innovation to optimize the existing and create the new. This presents the opportunity to leverage Six Sigma to the fullest extent. It also insures a place for those mavericks in the company who need the entrepreneurial environment to truly thrive and be of maximum benefit to the organization. The renewal experienced with the innovation uroboros is a key driving factor in the dynamic prosperity of a company. Especially in today’s environment where customer needs are evolving faster than ever, societal needs are more difficult to target, and competitive response is quicker than ever.
The fact that innovation must be practiced continuously again puts it on par with quality. As improvement (quality) must be continuous so must innovation. The systematization of innovation will reduce its practice to a set of algorithms that can be learned and repeatable. This will promote the ability of an organization to practice innovation cyclically and perennially– thus achieving the ambidextrous balance of preservation and evolution innovation.
About the Author:
Michael S. Slocum, Ph.D., is the principal and chief executive officer of The Inventioneering Company. Contact Michael S. Slocum at michael (at) inventioneeringco.com or visit http://www.inventioneeringco.com.