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Monthly Archives: March 2008

Innovation Value Chain

Along the lines of Michael Porter’s value chain in strategy analysis, it is possible to conceptualize an innovation value chain. Often companies get stuck in a rut by confusing innovation with ideation and not moving beyond idea generation.Recently, researchers at INSEAD have pointed out that “The [innovation value] chain starts with idea generation, but then moves to prioritising and funding ideas, to converting those ideas to products and finally to diffusing those products and business practices across the company.”It is interesting how this maps into the leadership intelligences framework.

Stage in Innovation Value Chain

Leadership Intelligence

Idea Generation

Inventive intelligence

Prioritizing and funding ideas

Analytical intelligence

Converting ideas to products

Operational intelligence

Diffusing products and business practices

Communicative intelligence

The problem with an innovation value chain is that it can mislead us into visualizing the innovation process as linear, proceeding in sequential stages, whereas in reality, the stages messily tumble into each other–back and forth. (The innovation value chain reminds me of the woefully inadequate “waterfall model” in software development.) Further, another danger is that such stepwise conceptions of innovation make it easy to compartmentalize the organization into hermetic silos by assigning ideation to one department, budgeting to another, and so on. In the leadership intelligences framework, a focus on the abilities needed for innovation rather than on processes and stages, allows us to break free of sequential mindsets and compartmentalized organizations. In this sense, the leadership intelligences framework helps to structure chaos, to provide the “disciplined disorganization” necessary for innovation.