Designing Innovation: Building Impact

This is Chapter 3 of my upcoming book on Social Impact and Innovation. Read Chapter 1 here and Chapter 2 here.

Let’s talk Innovation.

When we are talking about Impact and Innovation, we mean having a positive impact on society while building a financially sustainable organization and doing so through innovative means.

There are many ways to be innovative, and I’ll now walk you through some of the theory behind it, and what makes some innovation more likely to succeed. Take this with a caveat: there’s no guarantee of success. Having a certain amount of creative passion and personal drive will help you tremendously, but there are some innovation processes that will give you a structural way to look at getting a leg up in driving impact.

Bring on the Eggheads!

Austrian economist Joseph Schumpeter pioneered the idea that the market is always undergoing an evolutionary process set. He called this “creative destruction,” a constant series of waves that allows a community (meaning any grouping of individual units- people, enterprises, ideas) to move from simple to more complex structures. Creative disrupters are able to find gaps in the current system and fill them in, thereby allowing for the germination of the next generation, if you will. [Note: this doesn’t come without some pain, as people in the path of innovation are sometimes cast aside. But this, in its own way, much like life overall, makes a new gap that a new innovation will fill. That’s why innovation never stops.]

Connectivity is essential for this work, of course. Anybody can disrupt something- think of your uncle’s tipsy and not altogether appropriate speech last year at your sister’s wedding- but creative destruction needs a like-minded approach to going about something in an innovative way.

We’re talking about working together here to make a difference. If you’re a solo rock star, I’m not necessarily addressing this to you right now. If you’re a rock star member of a supergroup, welcome to the chat.

In ecology, this is a beautiful process known as emergent behavior, and to make it incredibly easy to relate to, it’s what a grassroots movement is: a gathering of creative disruptors finding gaps and moving into them to create a new model for the future.

So who is in a position to succeed as a grouping of creative disrupters? There are several answers to that, as is always the case with a theory. There’s an incremental approach (typically characterized as conservative and appropriately cautious), and a radical breakthrough approach- throwing caution to the wind and jumping off a cliff.

Incremental innovation builds on existing knowledge and resources, building essential competence. It focuses on modest change based on what already exists and encourages competition in a somewhat stable market.

Radical innovation builds entirely new knowledge that destroys existing competence. It focuses on large scale technological advancements (can someone say car?) that renders the existing market (horses and buggies) obsolete.

One of these is not better than the other, nor does taking one approach guarantee a success in engineering impact. Of course, in the real world, there’s room for both. We can make space in our hearts for unicorns AND pack mules.

What we need to do is look deeper into this simple either/or equation. Innovators can examine their own knowledge of their own competences, and their knowledge of the relationship between them and what someone else offers. This is called architectural knowledge. When you can identify bottlenecks in your process, by understanding the basic architecture of how things are affected by each other, and redesign the key processes to simplify them (paradoxically using simpler elements to increase the overall complex outcome of your process), then you have architectural innovation.

For example, let’s say you are a manufacturer of Impact Widgets. You have a process with many proprietary parts and inputs. When something goes wrong with your assembly line, you must stop operations and fix it. In the meantime, your Impact Widgets are no longer being put on the market. So what do you do?

How about this? Simplify the parts and inputs. Standardize them. Make them modular. This allows any number of suppliers to fill the gap in your current system in their drive to provide you with the parts and inputs you need. And you are back in business in a heartbeat, creating Impact Widgets. This is known as a “win-win” situation, where the innovation of one agent drives the innovation of another and fosters collaboration.

Et voila: Impact, nurtured by interconnectivity and a systematic, architectural understanding of how things are affected by each other.

In the next chapters, we will move into using this framework to identify the unique problem that is going to fuel your own innovation.