Annette Mason, partner at Blue Mine Group, will be among an insightful group of panelists and speakers addressing the following key questions:
1. What are the basic building blocks to foster and/or improve innovation within our companies and organizations? What about business models and innovative partnering? Innovation is not just about technology – owned by the Chief Technology Officer.)
2. What role does (or should) the government play? How can the government itself be more innovative (i.e. acquisitions approaches)?
3. Where does Human Capital Strategy come into play?
4. What strategies exist to advance our competitiveness, especially in this global economy where China – a rival, militarily speaking – is a partner for commercial aerospace?

By invitation only, September 27, 2012; San Francisco, CA. Please contact Annette Mason at amason@blueminegroup.com if you have questions or are interested in exhibiting/sponsoring.

The first step is to take an ecological perspective of the business and the environment that it operates in. Then make sense of the speed, impact and significance of the changes impacting business.

Core to these efforts is an understanding of the business model and the ability to innovate. While “business model” and “innovation” are two phrases frequently used as buzzwords, when developed properly, they create collaborative enterprises. Both people and the enterprise realize immediate value when intentional effort is directed at a development program that addresses Business Model Understanding and/or Innovation Skills Building (developing skills at the individual level that collectively contribute to an innovative ecosystem).

Having a workforce that understands its business model benefits the organization by:
• creating a common vocabulary and framework for communication and understanding across various functions and the entire organization
• seeding an environment for collaborative engagement
• providing a holistic understanding of the business
• opening opportunities to innovate across the entire business and business model
• allowing the individual to clearly see “my role and my contribution” to the organization

Equally important is the ability to find and develop innovative people for the organization. While it’s true, there are those born with creative DNA, there is also comprehensive research that identifies five discovery skills that can be developed: Association, Questioning, Observing, Experimenting and Networking. When employed, these skills allow all of us to develop our innovation capabilities and competencies.

By adopting these behaviors and modeling them for your organization, you can engage in active education that improves business while developing people as well. The ultimate result is impactful value creation, derived when business model and innovation learning takes place in the context of solving real-world business opportunities and issues.

These points are discussed in four recommended sources:

Dr. Andrew Day and Kevin Porter, “Developing leaders for a world of uncertainty, complexity and ambiguity,” The Ashridge Journal, Winter 2009-2010

Jeffrey H. Dyer, Hal B. Gregersen, and Clayton M. Christensen, “The Innovator’s DNA,” Harvard Business Review, December 2009, pages 61-67

Alexandra Michel and Stanton Wortham, Bullish on Uncertainty: How Organizational Cultures Transform Participants, (Cambridge: Cambridge Press, 2009). Also discussed in Wharton University of Pennsylvania’s newsletter article, “The Story of Two Banks: The Role of Uncertainty in Ensuring Survival”

Mark Butje, “Get Engaged Already! You Will Save a Ton of Money,” The Employer’s Solution Blog, May 2011

– Annette Mason

What is Value?
To put it simply, something is of value when it meets a need. Everything we need or desire can ultimately be traced back to one or more of our core human physical, intellectual, social and spiritual needs. Value is created either through satisfying these needs now or through acquiring the means to satisfy these needs in the future.

To satisfy our needs, we require resources, from physical resources like food and clothing to intellectual, social and spiritual resources that meet our other needs. Some resources we consume to satisfy immediate needs. Others we can store to satisfy needs later on. The more resources we have to satisfy needs, the more value (or wealth) we possess.

How is Value Created?
Value is created when we acquire resources that meet our current or future needs. There are three ways to do this:

1. Aggregate existing resources. For example, pick a bunch of apples.

2. Transform an existing resource into a more useful or desirable resource: bake an apple pie.

3. Exchange an existing resource for a more desirable resource: sell the apple pie for more than the cost of its ingredients.

Each of these requires us to take action – the resources we require to satisfy our needs don’t just appear. So value is created through the actions we take to aggregate, transform and exchange resources to get our needs met. All economic activity, all the work each of us does every day, can be so described.

How Can We Best Facilitate Value Creation?
Though theoretically two of these (aggregation and transformation) can be done by each of us alone, in practice we are each far better off when we collaborate and work together. And as economics has long pointed out, it’s even better when we each specialize in what we do best and then trade with each other.

With some exceptions, the best way to determine how people should specialize and trade is by enabling each person to freely pursue his/her own interests in a collaborative free market system. Through the market forces of supply and demand, such a system strikes the optimal balance between maximizing individual skills and motivation, meeting everyone’s collective needs, and doing so as efficiently as possible.

What are the implications for business?
These simple principles suggest some very important conclusions for companies. To create more value, you have available to you a limited number of very powerful levers:

• Deeply understand and ensure you are meeting the needs of your customers, shareholders, employees, partners and other stakeholders.

• Explore ways to aggregate and leverage more and better “input” resources such as intellectual property, relationships and tools.

• Transform these “input” resources into more useful and desirable “output” resources, ranging from better synthesizing data into useful information to providing products and services that better meet customer needs.

• Seek ways to facilitate better collaboration both internally amongst all employees as well as externally with customers, partners and others.

• Identify ways to reduce or eliminate the amount of activity and “input” resources needed to aggregate, transform and exchange resources internally and externally.

• Implement market-like mechanisms within your organization that unleash individual creativity and passion, better meet collective needs, and improve efficiencies.

An important goal for the company is to build a portfolio that is balanced between the businesses generating cash and those consuming cash – this is simply the balance between today and tomorrow. The long life cycles of the industrial economy allowed companies to focus on the growth and maturity phases of the business lifecycle. In today’s open markets, however, getting wrapped up in today’s businesses while ignoring those of tomorrow results in rapid and severe penalties. This is exemplified by the many companies in recent years that have been disrupted by new markets and business models they never saw coming.

In the 21st century, the primary focus is shifting toward innovation, and the objective is to continually create and grow new businesses. It is critical to continually monitor your portfolio to ensure a balance of businesses at each stage of the lifecycle, and to be ready to enter or exit businesses in order to maximize overall portfolio value.

These points are discussed in three recommended sources:

Baghai, Mehrdad, Stephen Coley and David White. The Alchemy of Growth: Practical Insights for Building the Enduring Enterprise. New York: Perseus Books, 1999. Based on extensive research, the authors (consultants with McKinsey) provide a comprehensive overview of evolving a portfolio of businesses.

Drucker, Peter F. Managing for Results. New York: Harper & Row, 1986. One of the management master’s lesser known classics, this work made an important contribution to the strategy field. Though Drucker focuses his portfolio discussion on products rather than businesses, the principles are the same.

Moore, Geoffrey A. To Succeed in the Long Term, Focus on the Middle Term. Harvard Business Review, July-August 2007. In this article, Moore provides a highly readable summary of these principles, building on Baghai, Coley and White’s book.

At the same time, companies must ensure there are common threads across the portfolio, so that the businesses can share capabilities and other resources. Quoting GKN’s CEO, The Economist points out that both its aerospace and car parts businesses share “soft synergies. Both make high-precision kit for a few global firms: it takes the same set of skills to serve and sustain the trust of such demanding customers. GKN has built up its aerospace business by capturing outsourcing contracts, just as it did in its driveline business. And some firms have begun to explore the use of carbon fibre in cars.” GKN illustrates how even very long established, heavily industrialized companies can apply the principles of business innovation to sustain success in the 21st century.

AARP’s desire to develop a relationship with Generation Y required an innovative process including ethnographic research and lifestyle trends analysis, concept visualization, development, and prototyping. Through engagement with customers, the cross-functional team was able to learn quickly. They won buy-in from the board by presenting ethnographic research, and ultimately designed a youthful financial planning website and online community. The project also achieved the gold award for design strategy by the Industrial Design Society of America. It’s one of various enlightening case studies in Jeanne Liedtka and Tim Ogilvie’s book, Designing for Growth – A Design Thinking Toolkit for Managers.