Exovation – the flip side of innovation

"It is unlikely that you have ever met the concept of exovation before; I invented it in April 2008. Invented? Yes, indeed – even if a Google search obtains a couple hundred hits; but they have nothing to do with the concept as I have defined it. You will see, presently." Read more in this weeks´ column by Bengt-Arne Vedin, PhD and Professor emeritus in innovation management.

What are the obstacles to innovation? Numerous, to be sure. A company credited with profound concern for innovation and thus featuring important features is 3M, the corporation of Scotch Tape and Post-It Notes fame. Academics and journalists alike have fallen for their charms, though criticism has also been voiced.

One of their innovation mechanisms is found in the establishment of precise criteria for renewal. Each and every business unit has to get a certain share of their revenue, thus a quotient, from products that are younger than a certain amount of time. So X per cent of revenue must be generated from products that are no older than Y years. (The reason for not mentioning X and Y is that they have been adjusted at least once to reflect a need form higher speed, and I am not certain what the current levels are.) – The criticism I mentioned takes issue with a quantification that may be subject to manipulation, a risk when applying rules blindly and rigidly. So wisdom and common sense must prevail.

The obvious route to achieve the required share is to get new products going, to innovate. But do recall that I talked about a quotient: new products enter in the dividend, but to get the ratio, there is the divisor too. In this case, we have seen it consist of revenue generated by the ‘old’ products, aged more than Y years. So a complementary way of achieving the demanded quotient would be to reduce the divisor.

… exovation, the power of GETTING RID OF (some of) prevailing products…

It is here that we find exovation, the power of GETTING RID OF (some of) prevailing products… Behind the 3M dictum we find the profound insight that there are older mainstay products that are just about marginally profitable, if even that and not just forgotten living dead, all the while requiring attention, engagement, involvement, management resources, routine but not-for-free upkeep such as storing, catalog updates, inventorying, information in data bases and bookkeeping. All activities taking focus away from the creation of novelty, all ties to the past, all routines that create lock-ins – taking time, attention, interest, engagement, thinking.

Another large American corporation showcases another type of exovation: the organization in its future. They have recognized that the organization of today reflects and thus tends to permeate the past; while the only thing that is entirely certain is that the future will be different. Therefore they have created a skeleton alternative organization for the future as anticipated, an organization with its own resources for creating novelties, for innovation.

Since the guesses about the future are certain to be wrong, or not entirely right, there are free resources for projects that do not fit either the current or the skeleton future organization but that still merit being treated as lottery tickets.

When Jimmy Carter was elected president in 1976, his program was much about better management. One particular management practice, fashionable then, that he had practiced as governor in Georgia, was zero-base budgeting, and this was highlighted in his campaign. The underlying philosophy is, in my term, about organizational exovation: in each and every organization, there is an inertia that makes it continue doing just as during the previous year – with 4 per cent more in the budget or maybe a 3 per cent reduction on the margin.

The zero-base budgeting recipe demands starting all over from the very beginning, relying on first principles to really understand what is worth paying for, what merits resources, what the trade-offs really are. As with so many radical recipes, this would be just too demanding to be followed to the letter, overall and every year, but there is at the bottom an important exovation proposition.

An obvious route would be to design several more practical means to translate ‘more for the future, less to the past’ in practice.

What might a program to develop methods for furthering exovation look like? An obvious route would be to design several more practical means to translate ‘more for the future, less to the past’ in practice. Another would be to have society at large, or government, being an exemplary forerunner rather than contributing to detrimental friction, utopian perhaps, but I have seen an example of how the soft infrastructure in society if not got on to furthering exovation, at least a novel rule to have R&D investments compulsory in annual reports for public companies made for more focus on R&D, and, as a subsidiary, on innovation.

A natural approach for a researcher is to suggest that we collect, organize, and promote what we already know about how existing projects get in the way of new ones – like Thomas J Allen has demonstrated how dangerous it is to decide on one single development trajectory too early into a project. Above, I listed a number of ways in which existing products contribute to inertia; that list might be enlarged, systematized, and its various components given weights.

About Bengt-Arne Vedin

Bengt-Arne Vedin, PhD, is Professor emeritus in innovation management, now affiliated with the Department of Industrial economics and management at the Royal Institute of Technology, Stockholm. After practicing innovation and entrepreneurship, resulting in a handful patents, he has been into innovation studies since the mid-1970′ with professorships at the Royal Institute of Technology and Mälardalen University, also serving as a guest professor at Kasetsart University in Thailand and Universitat de Girona in Spain.Bengt-Arne has consulted for large and small firms as well as organizations such as the US National Academy of Engineering and the OECD, and has served on some fifteen corporate boards of directors. His research is geared at innovation, IT, and futurology in various combinations, most recently at design-inspired innovation. He is now working on his book no 71 on that theme.