We need to know how to unlock the real value of innovation both personally and within the organization, we work for. If we do not fully understand where the innovation capital comes from, how new capital and stock can be provided, innovation will remain tentative, always stuttering along. It will lack that essential organization innovation rhythm, stay disconnected for many and will be frustrating your own evolution in understanding.
Then we have the opportunity to build Innovation Capital.
Key elements of innovation capital also, equally consist of mostly non-technological intangibles embodied in the organizational routines and employees’ mindset. So, it is important also to understand the make-up of innovation capital, in its “stock” and these, can be clarified in the following ways:
- Innovation capital as renewal capabilities of our organizations in the form of producing intellectual properties that offer value and are increasingly being extracted from our intangible assets.
- Innovation capital possesses attributes that make it a “strategic” asset. The key to success lies in specifying the nature and application of these assets in relation to the new knowledge flowing into the organization. This generates and commercializes concepts and ideas into new forms of innovation value.
- Innovation capital is made up of the ongoing “dynamic interactions” between intangibles and tangibles. Built up from experience over time, they develop into mostly intangible assets, and eventually into valuable outcomes.
- It is the effective use of different kinds of intangibles that contribute to innovation capital. Only a few of them can be formally captured as they are built on interactions, relationships, applied experience, generally accepted understanding and based on pattern recognition and meaningfulness.
- As we grow our networks and relationships, we increase knowledge sharing. This promotes our understanding and provides increased intangibles inside the organization. As we deepen our knowledge, we gain experience and achieve higher “pattern recognition” and insight.
When we look around we are able to spot the enablers for innovation stock to grow, as they contribute into your experiences and exposure to general principles of understanding. See how you can learn from these:
These elements can be described as follows:
- Innovation strategy relates to strategic choices a firm makes regarding its innovation
- The selection of the type of innovation that fits best to the firm’s objectives and the allocation of resources to different types of innovations
- Innovation culture is a mixture of employees’ innovation-related attitudes, experiences, beliefs, and values
- The integrating function of environment, culture, and climates that stimulate innovation activities
- Innovation structures that are formed to make up the innovation process
- The approach to organization and the way employees engage in innovation are grouped
- The employees’ knowledge (technological and non-technological) engaged in the innovation process
- The stock of knowledge can be increased by an organization’s internal and external learning
“Internal learning” refers to the creation of new knowledge within the enterprise, while “external learning” pertains to the integration of knowledge from outside. We can model innovation capital and apply different capital needs to different innovation challenges to leverage them in more dynamic ways.
The more we strengthen our knowledge and appreciate the value within our people, the more we can generate new knowledge, build greater narratives, deepen discussions, and establish better connections and interactions across growing communities. In this way, we can turn innovation capital into a highly dynamic and valuable asset, just as we treat financial capital today.
The more we discover, the more knowledge we gain.
This enables better decision-making and fosters our value-creating potential. This will, in theory, give us greater confidence, both internally and externally, that today, our invested financial capital is in good hands. We are effectively applying innovation capital to value creation.
Our learning capital needs to emerge and dominate future discussions in improving its quality and value contribution. We need to increase incentives for organizations and their people to learn or update their existing knowledge.
The power lies in the linkages we can forge, in the acquisition, in assimilation, and eventually in a transformation that allows known and new knowledge to fuel our wealth-generating innovation pipeline.