Innovation Excellence Weekly - Issue 32

Issue 32 – May 10, 2013
1. Announcing IX Research for Innovation Practitioners............................... Doug Williams
2. modelH – Health Model Co-Creation Forum (part 1) ……………..………….... Kevin Riley
3. modelH – Health Model Co-Creation Forum (part 2) ……...……………..…… Kevin Riley
4. How to Suck at Leadership……………………………………..………...…...... Holly G Green
5. How Cooking Lunch Can Be a Business Model Innovation .………..……… Tim Kastelle
6. Cultivate Mental Confusion ………………………………...…………..…. Jerome Provensal
7. Innovation’s 4 Business Outcomes …………………………………………..…. Seth Kahan
8. Innovators Get Better with Age ………………………………………..…….. Gijs van Wulfen
9. Building Up Innovation Capital …………………….……………………...….. Rowan Gibson
10. Do You Really Know What Business You’re In? …………………..…..…..…. Tim Kastelle
Your hosts, Braden Kelley, Julie Anixter and Rowan Gibson, are innovation writers, speakers and
strategic advisors to many of the world’s leading companies.
“Our mission is to help you achieve innovation excellence inside your own organization by making
innovation resources, answers, and best practices accessible for the greater good.”
Cover Image credit: Doug Listening from Bigstock

Announcing IX Research for Innovation Practitioners
Posted on May 5, 2013 by Doug Williams
I am excited to announce the launch of IX Research, the research arm of Innovation Excellence. We believe innovation is fast
becoming a business discipline alongside established roles such as marketing, market research, IT, and human resources. But
innovation is also unique in that it is driven by employees not just in one department but across the entire organization, from the C-suite
right down to entry-level positions – as well as in organizations of all sizes.
Our goal is to provide Innovation Executives, Innovation Practitioners, and Innovation Vendors with the data, insights, and
analysis needed to succeed in this new world order of innovation. We’ll do this in three ways:
1. IX Research Reports – We offer an annual subscription to syndicated research reports that are laser-focused on innovation –
something no other research firm offers. Our reports provide primary and secondary research, analysis, and guidance to help drive
innovation as a business discipline. Our research is:
 Independent: Authors are respected innovation thought leaders.
 Relevant: We will offer market landscapes, strategies, frameworks, case studies, and best practices on innovation, open
innovation, and co-creation.
 Accessible: Our single-user license is just $300 per year, which makes our research accessible to all innovation-centric
employees at companies large and small. (An enterprise license is also available.)
2. IX Research Panel – We are also launching the opt-in IX Research Panel for innovation practitioners who are interested in
participating in the research process with us. From time to time, panelists will be invited to participate in online surveys, telephone

interviews, online community discussions, or other types of engagements to share their experiences relating to innovation. We envision
the IX Research Panel to be a source of primary research for IX Research reports, Innovation Excellence blog content, and research
conducted by IX Research on behalf of third parties (but don’t worry, under no circumstances will panelists’ contact information or
personal information be shared with third parties). Incentives to participate in the research process may include one or more of the
following: a copy of the research report in which the data was used; a summary of the aggregate results of the research; inclusion in a
random drawing for specified prizes; or a clearly defined monetary incentive (e.g., gift card).
3. IX Custom Research - IX Custom Research offers a host of professional services for innovation vendors, innovation consultants,
and innovation practitioners. We help companies achieve success by providing custom quantitative or qualitative research via the IX
Research Panel or external audiences (e.g., consumers, business professionals), coupled with analysis and recommendations to help
you achieve your business objectives. We prepare thought leadership papers that offer an objective, independent perspective grounded
in research on trends, markets, or business challenges to help you start conversations with clients and prospects. We also offer
traditional consulting services, advisory sessions, speeches, webinars, and workshops to help you devise strategies, implement
frameworks, select tools and vendors, and overcome innovation challenges.
Interested in learning more? Please contact us, or visit the IX Research page to learn more about IX Research. There you’ll be able to
subscribe to IX Research Reports, opt-in to the IX Research Panel, or explore how IX Custom Research can help you.
image credit: modern business image from bigstock
Doug Williams, Chief Research Officer and Principal Analyst, leads the development of IX Research. Doug is the
primary author of IX Research’s syndicated research reports, and is responsible for the development of the IX Research
Panel and IX Custom Research lines of business. A former analyst at both Forrester Research and JupiterResearch, he
launched and led Forrester’s innovation and co-creation practice for product strategy professionals. He authored 36
highly rated Forrester Research reports on innovation, open innovation, and co-creation, and was the primary author and developer of
Forrester’s Open Innovation playbook. You can follow Doug @DougWilliamsMHD.

modelH – Health Model Co-Creation Forum (part 1)
Posted on May 2, 2013 by Kevin Riley
Hello to all. I am working on a new project I am calling modelH. modelH is a dynamic collaboration between me, Innovation Excellence,
Batterii, and a bunch of great healthcare thinkers.
Batterii’s CoCreation® Platform powers this project, and my Business Model Method for Collaborative Healthcare Innovation guides
it. Innovation Excellence’s worldwide Community of disruptive innovators fuels it.
Our goal is to create a business model canvas specifically designed to generate and evaluate healthcare business models that can
create positive consumption experiences, improve care delivery, and align and control costs. We then want to use our framework to co-
create and test some innovative healthcare business models. The results will be compiled in a book to be released in 2014.

modelH – Health Model Co-Creation Forum
What is the problem we are trying to solve?
The American healthcare “ecosystem” in its basic form operates along 3 themes: care consumption, care delivery, and care financing.
These domains are actually interdependent points of interaction along a value chain of healthcare. To impact one point, you really
impact them all. Make no mistake – healthcare is a business! The problem is that very few people create business models that are
considerate of all three points of view – and certainly no one has come up with a framework to make this easier.
In addition, across the value chain of healthcare, there are four key stakeholders: patients, providers, payers, and purveyors. To put it in
simple terms, the party who consumes the product of healthcare (the “patient”) is usually not the one who pays for it, or at least not
most of it. The party that pays for it (the “payer”) is best served when it is not used, and is therefore motivated to push for less of it.
Furthermore, the parties that deliver it (the “provider”), and the parties that support its delivery (the “purveyor”), are not aligned to place
realistic boundaries on its cost, thus forcing the system into bankruptcy. Due to its divided nature, the ecosystem is overrun with
inefficiencies and creates dis-incentives across themes and between stakeholders so that each maximizes their own value, often at the
expense of the others.
But the system is not so much broken as made up of working parts not working together. Our diagnosis of the problem is misalignment
of the ecosystem’s building blocks. Our prescription is to reset these building blocks into a better working order. The outcome will be a
healthy and aligned ecosystem that is both market-driven and cost conscious.

There is no better time to try and fix the healthcare system than amidst the current environment of reform. The team behind the modelH
CoCreation Forum feels that a collaborative and systematic approach is the only means to overcome the interconnectivity barriers that
exist to get past where others have failed. We have the means to accomplish this collaboration though Batterii’s CoCreation® Platform.
We have the right approach for how to systemically validate a healthcare-specific business model through Kevin Riley’s Business
Model Method for Collaborative Healthcare Innovation. And through Innovation Excellence and our own networks, we have access to a
community of radical innovators with representation across all key stakeholders, as well as business model experts, ready to engage
with us in this year-long project.
This is where you come in! But before we ask you to get involved, let’s talk more about how we can solve this problem – together.
So, step up to the plate an get involved. Click here to join the Forum (the big red button on the side)!
to your health!
image credit: tipshealthinsurance.com
Kevin Riley is an entrepreneur, healthcare executive, and business model innovator who works with start-ups and
legacy companies alike, across the healthcare industry. Kevin founded and was CEO of a national health care retail
company, has played leadership roles for national retail health start-ups, and served as the first Chief Innovation Officer
of a major insurance plan. In 2006 he started Kevin Riley & Associates Health Model Innovation to help companies with
the convergence of health care and the consumer.

modelH – Health Model Co-Creation Forum (part 2)
Posted on May 6, 2013 by Kevin Riley
Hello again. I wanted to give you all another update on the big project I am calling
modelH. modelH is a dynamic collaboration between me, Innovation Excellence,
Batterii, and a bunch of great healthcare thinkers.
Last week I told you about what we were trying to solve. This week I aim to tell you
how.
I need your help to make this work. But before we ask you to get involved, let’s talk
more about how we can solve this problem – together.
How do we solve the problem?
The American healthcare system is not so much broken as made up of working parts not working together.
The modelH team believes the ecosystem can be fixed! The answer lies in aligning the business model so all stakeholders share an
understanding of “value” across the themes of consumption, delivery, and financing. Our definition of value is based on that of Michael
Porter, put forth in his paper entitled What is Value in Health Care?. Value in healthcare is measured as the patient health outcome
achieved per healthcare dollar spent. A better healthcare business model must then result in:

1. Improved consumer experience yielding an informed decision maker aligned to their risk and reward,
2. Increased access to necessary care through an engaged delivery system, and
3. Reduced aggregate cost of care, with a market-driven, balanced incentive and reward model.
Our goal of Health Model Innovation is lofty, but achievable. We believe modelH will result in a practical guide to fixing the healthcare
system that all stakeholders can use to create better aligned and market-sustaining business models.
But our goal is too big and too important to try and solve alone. This cannot be done without the actual stakeholders co-creating the
solution together, outside of an over-focus on any particular theme, or an over-influence from any stakeholder group.
1. Phase 1 is to agree on the framework and tenants of a healthcare business model canvas. This will create a structured means for
business model generation, similar to the one developed by Alexander Osterwalder and team, but designed to work in the American
healthcare system.
2. Phase 2 will use the healthcare business model generator to develop and evaluate innovative market models and business ideas with
the hope that some party within the ecosystem, or even outside of it, takes them to market.
3. Phase 3 will take our findings and publish them in a visual playbook for all healthcare innovators to use.
Stay tuned – next week we will discuss how to build a business model canvas for the American healthcare system.
So, step up to the plate an get involved.
 Click here to join (the big red button on the side!): http://bit.ly/modelHForum
 Follow us online at: https://twitter.com/ModelHForum
 And you can read more about this project in my linked posts: modelH (part 2)| modelH (part 3) | to your health,
image credit: learnvest.com
Kevin Riley is an entrepreneur, healthcare executive, and business model innovator who works with start-ups and
legacy companies alike, across the healthcare industry. Kevin founded and was CEO of a national health care retail
company, has played leadership roles for national retail health start-ups, and served as the first Chief Innovation Officer
of a major insurance plan. In 2006 he started Kevin Riley & Associates Health Model Innovation to help companies with
the convergence of health care and the consumer.

How to Suck at Leadership
Posted on May 7, 2013 by Holly G Green
Have you ever woken up in the morning and said to yourself, “I’m tired of
being a good leader. Today, I want to suck at it.”?
Well, today’s your lucky day! As someone who strives to keep up with the
latest in leadership, it recently occurred to me we have tons of books,
videos, blogs, and articles on how to be a great leader. But I have yet to
come across any that talk about how to be a bad one.
Given the performance of our political leaders and the lack of integrity
exhibited by many in the private sector, it’s obvious that the desire to be a lousy leader runs deep these days. So if you’re looking to
take your leadership abilities to a new low, here are some useful tips. For those who don’t want to stop at merely bad leadership, but
want to become the Michael Jordan of awful leaders, I’ve broken each tip into two categories that define progressively worse levels of
leadership.
Leadership skill: Managing employees.
Suck: Don’t conduct regular one-on-ones with your direct reports.
Really suck: Go ahead and schedule the one-to-ones. Then cancel them at the last minute, using some lame excuse that both you and
the employee know is bogus.
Leadership skill: Being open to diverse data sources.
Suck: Don’t allow others to disagree with you or have a dissimilar view of things. After all, you’re the boss, right?
Really suck: Encourage people to bring up new ideas by saying things like, “That’s the stupidest idea I’ve ever heard!” Be sure to do it
publicly, so everyone can see how much you love innovative thinking. When you’re done berating the employee, ask (with all sincerity),
“Anyone else have any ideas they would like to bring up?”
Leadership skill: Giving ongoing performance feedback.
Suck: Don’t give employees candid or direct feedback. None. Nada. Zippo. Instead, assume they will just “get it.”
Really suck: Hold them accountable at annual review/merit increased time for things you never told them about.
Leadership skill: Updating your thinking/ways of working.
Suck: Don’t change the way you do things because they always worked in the past.
Really suck: Ignore and/or suppress obvious data that shows the way you always do things is no longer working and is actually putting
your business in jeopardy. Then punish those who had the audacity to present the data in the first place.

Leadership skill: Engaging employees.
Suck: Don’t solicit or answer questions from employees.
Really suck: Make a big deal about having an open door and “open ear” policy. Then act really annoyed when employees come to you
with questions, feedback and input.
Leadership skill: Leading effective meetings.
Suck: Don’t prep for meetings. Just run in (late) and hope you’re effective.
Really suck: Schedule last-minute meetings (very important ones, of course) that force people to rearrange their schedules. Then don’t
show up because something else came up. Bonus suck: Don’t apologize because everyone knows your time is more important than
theirs.
Leadership skill: Defining winning for your organization or team.
Suck: Define what winning looks like and tell people once. Then never mention it again, expecting everyone to remember it with great
clarity and passion.
Really suck: Don’t define it, so that no one (including yourself) has a clue as to the destination. Then punish people for not taking you
and the organization to the Promised Land.
I could go on and on, but I think you get the point. All humor aside, the vast majority of us really do want to be effective leaders. And we
all know that we need to practice effective leadership skills on a consistent basis in order to achieve the results we want.
The problem is that we’re all running so fast to keep up that we don’t pause for a moment to do what effective leaders do. Or, we don’t
pause to even consider what effective leaders do. Or, we get so caught up in all the daily interruptions that seem important that we lose
track of what really is.
My suggestion: if you really want to be an effective leader, start every day by thinking about it. Take a few moments each morning to
focus on what will make a difference a year from now, and then don’t let the deluge of distractions get in the way. I know…easier said
than done. But the alternative is to suck as a leader, whether we want to or not.
Call to action: Take 5 minutes each morning to focus on what you need to do that day to be an effective leader.
Holly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed
speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go
fast, will change your thinking.

How Cooking Lunch Can Be a Business Model Innovation
Posted on May 6, 2013 by Tim Kastelle
When firms are trying to become more innovative, they often don’t know where to
start. Here’s one idea, start by making your people lunch.
Drake Baer wrote a terrific profile of a startup called Thumbtack discussing how
their decision to hire a full-time chef has transformed their business.
Cofounder Sander Daniels lists the reasons they made this decision:
 Meals build community: Everyone on the team eats together every day
 Meals build networks: On Wednesdays they have an open dinner where
recruits can hang with the company
 The team is more productive: People aren’t leaving the office to wait in lines or scrounging around for food
 Everyone is eating awesome food, so everyone is healthy
And they say this in their Food Rules for Startups manifesto:
“Often startups try to attract talented teammates by offering benefits like ping-pong tables, video games, or gym memberships. While
those things are valuable, a culture of good food is an order of magnitude more important. Sharing meals around quality food builds an
environment that encourages collaboration and celebrates excellence. The team is excited to come to work because they value and
respect the full work environment. We believe every company can benefit from a food-centric culture.”
Baer outlines why this is a broadly good idea, but I want to talk about why this is a great innovation idea.
If you do something like this, you are actually changing your business model. I’ll use the Business Model Canvas version of the
business model to illustrate the discussion:

When you start cooking people lunch (and changing all the other food-related processes in your workplace) you are changing a key
activity. The first consequence that a lot of people will think of is that you are adding cost. This is true, you are a cost. But if your people
are healthier, you are also reducing the costs that accrue from poor health. And your productivity goes up, etc.
More importantly, this will attract a different, probably better, pool of people that want to work for you. So your key resources change.
Idea generation will improve as people problem-solve together at meals – so another key activity changes. Your key partnerships will
change as more people learn about and interact through the company at the open dinners. This may in fact lead to new channels to
customers.
As all of these back-end activities change, you will be coming up with great new ideas that can lead to new value propositions, different
customers, and so on. One change to one activity has a domino effect throughout your entire business model. After that
happens, you are running a firm that is substantially different from all the other ones in your market.

Here are some of the important lessons in this:
 You can innovate anything. Not everyone can afford to invest millions in R&D. Not everyone can start entirely new product
categories from nothing. But everyone can think about their business model and find ways to change it. Find the things that
everyone else takes for granted – like “we get our own lunch” – and change it. It can transform the way you do business.
 Face to face is still critically important. Here is what Valeria Maltoni says:
Emails, phone calls, or in person meetings are the best conversion tools for individual connections. In a post that has helped
me research the question of influence more thoughtfully over the years, Stephen Downes said that rather than being a
question of linkage, influence originates from [diversity, autonomy, openness and connectivity.]
 Yes this probably will work for you. When I talk to people about ideas like this, they will often say something like “That’s fine
for a startup, but that would never work here in the real world.” Why not? If you’re running a big company, isn’t it important to
have healthy and productive people? Every single CEO that has ever said “our people are our most important asset” should be
doing something like this. If they’re not, then maybe it’s their real estate that is their most important asset, or their fleet of
vehicles, or….. something. But if your firm is built on people, you need to take care of people.
The idea that changing one activity can change your entire business model is powerful. It takes time to reorganize the other
components of the business model to adjust to this, and that can be hard. But it can also be an important source of competitive
advantage, because innovative business models are harder to copy than innovative products.
Give it some thought – what are the activities that everyone in your firm or industry take for granted? If you can innovate lunch, you can
innovate anything.
image credit: thumbtack chef Thea Baumann by Anastasia Tumanova
Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about innovation
at the Innovation Leadership Network.

Cultivate Mental Confusion
Posted on May 3, 2013 by Jerome Provensal
Muscle Confusion -> Mental Confusion
If you have been to the gym or involved in any fitness for the past few years, you certainly
run into the concept of “muscle confusion“.
The idea behind the concept is that muscles accommodate to a specific type of
stress/exercise when the same stress is continually applied to the muscles over time. We
become very proficient at doing that same exercise but we eventually reach a plateau,
where we get stuck.
The solution: mix up your exercise routines. You are a jogger? Try some strength training.
Yoga is your passion? Give swimming a chance, every so often. A mix of different exercises was the novel ingredient to the incredibly
successful P90X
When it comes to our daily job, we also become very proficient at it over time. Our brains develop routines and we stick to them
because they work. That said, by not challenging the way we do things we invariably plateau and reach a state of pleasant comfort,
sometime without even realizing it. However, there is nothing more dangerous in life than comfort because it can quietly kill your
creativity, desire to innovate and aspiration for a better tomorrow.
If you have reached that dangerous level of comfort or don’t want to get even near it, let me offer a solution: Mental Confusion.
I do realize that “train your brain as if it was a muscle” metaphor has been overused but in this case it seems very apropos.
2 Ways to Stimulate Mental Confusion
How do you go about creating “mental confusion”? My suggestions are simple:
 do something unrelated to your day job
 do whatever makes you (somewhat) uncomfortable
Say, you are a software engineer, programming all day. Why not pick up a book about doing simple sketching. Check out Mark
Kistler‘s books. That new skill will help you express your software design to non-engineers.
You are a finance guy, and although no one can rock a spreadsheet like you do, writing has never been your forte. Why not start a blog
on a topic you cherish? It can be finance related or not.

You are a math teacher and you nailed your lesson plan… 10 years ago and you can now do it with your eyes closed. How about
looking into the ways Khan Academy has successfully harnessed the elements of gamification into their own lessons plans? How?
Take this excellent Coursera course on the topic.
You are a magazine editor with a successful personal blog on the side about fashion and have always wanted to customize the look-
and-feel of your WordPress blog. Why not take a class on HTML5/PHP/CSS? They are so many good resources (videos, classes,
etc…) on those topics that it’s a shame not to take advantage of them.
I could go on but I’m sure you get the idea.
Benefits of Mental Confusion
Outside the obvious advantages of broadening your mental horizon. The new skills will make you more creative overall, more able to be
innovative and find better ways of excelling at your trade.

It is no surprise that successful entrepreneurs these days no longer look for talents in a narrow field. Instead they seek well-rounded,
dual (T-shaped) or even multidisciplinarity individuals who can contribute at many levels and bring both left and right brains at the table.
Companies like IDEO have long preached the gospels of having employees being skillful in more than one field. Practicing “mental
confusion” will lead you to become one of those creative innovators.
Universities have also noticed the trend with schools like the Stanford D-school offering a degree in design, combining traditional
design teaching with finance/entrepreneurship acumen. Even, bastion of technical/scientific knowledge like Caltech now offers the very
popular class PA 16… on Cooking Basics and other typically right-brain topics.
Innovation often emerges at the intersection of 2 disciplines or when 2 experts in their respective domains have a chance encounter.
Imagine what you will be able to achieve once various areas of your brain have been sufficiently cultivated .
Ready to get “mentally confused”? Don’t wait, get out of your comfort zone.
If you still need some extra motivation, check out Seth Godin‘s excellent blog post “the simple power of one a day”.
image credit: lightwise / 123rf stock photo
This blog post is a repost http://provensal.com/lbb/
Jérôme Provensal is a Software Engineer by training and passion, with a MS in Computer Science and IT Systems from Université
Pierre et Marie Curie. Born, raised and educated in France, he’s resided in the US (Los Angeles) for 20+ years where he is Director
of Software Development for a leading FinTech company and blogs from LightBulbBites.

Innovation’s 4 Business Outcomes
Posted on May 7, 2013 by Seth Kahan
Innovation for innovation’s sake is worthless. It’s not about being creative or
experimenting. It’s about succeeding in the market. You innovate to
achieve one or all of these four business objectives:
1. Grow your base
2. Get a bigger buy
3. Improve loyalty
4. Increase market prominence
I have had a front row seat with HRCI over the last 3+ years as they are one of my best clients. Here’s the story:
The Society of Human Resource Professionals created HRCI as a separate organization in 1973. It is solely and independently
responsible for developing and administering certification exams in the field of human resources.
Initially growth was slow. By 1981, under the name of the Personnel Accreditation Institute, they had certified around 2,500 human
resources (HR) professionals. In 1988 they established their two mainstay certifications, the Professional in HR (PHR®) and the Senior
Professional in HR (SPHR®). Growth was incremental. But all that changed in the last few years as the group introduced a sequence of
game-changing products and services.
The time seemed ripe. Although companies had for years been giving lip service to the idea that people are their biggest assets, the
age of the knowledge economy made that a reality. People had become the primary competitive advantage for knowledge
organizations.
HRCI determined it would be at the forefront of this inflection point, establishing itself as the midwife of professional standards required
to succeed in a global marketplace. Innovation would be their tool of choice. Then-CEO, Mary Power, hired Bennie Johnson to be Chief
of Global Marketing to address the issue. Through a system of parallel initiatives Johnson engineered a masterful growth strategy that
is in motion to this day.
Here is a high-level timeline:
2010
* HRCI website redesign
* My article on Fast Co’s website, Strategic HR: the Time is Now.

* Kicked off a retention program to increase engagement and raise the numbers on recertification.
2011
* Hosted a webinar that targeted certificate holders from Fast Co’s Top 50 Innovative companies (Facebook, Amazon, Apple, Google,
PG&E, Walmart, HP, Netflix, Nike, Intel, etc) PPT deck can be downloaded here. My Fast Company coverage here, HR Strategy and
Innovation.
* Held the ﬁrst exclusive symposium on strategic HR and innovation, filling every seat with local business leaders and HRCI certificates.
It was held on the top floor of Newseum overlooking the US Capitol and featured three movers and shakers, VPs of HR who are in the
driver’s seat at well-known organizations.
* Initiated campaign to embed in professional communities around the world

2012
* Launched the in-house publication, a high-quality magazine,Certified, focusing on the intersection of HR, strategy, and innovation
* 2nd annual exclusive symposium is held in Washington, DC. Again every seat is filled with local business leaders and HRCI
certificants
* Successful launch of the global HR professional credentials, Human Resource Management Professional (HRMP℠), and Human
Resource Business Professional (HRBP℠)
* Pilot of Certified Voice, an exclusive online community social media platform for certified professionals
* Made the transition from certification as a transaction to building communities of certificants
2013
* Exclusive symposia have been held in Chicago, Toronto, and Philadelphia, with New York, San Francisco, and 3rd annual in
Washington DC on the calendar
* Certified, the magazine completes its second year
Each of these innovations combined to increase awareness of HRCI among its target clients at a time when HR is becoming visibly
crucial to business success. They demonstrated that HRCI was moving aggressively into a new role as a thought leader at the forefront
of strategic HR, not just a purveyor of certifications. The result is a reputation for being the leader at a time when strategic HR is a
competitive advantage.
The success of these efforts can be measured in certifications. In 2008 (the last time prior to this effort it was reliably measured) the
count was about 96,000. At the time of writing the certificant base has reached over 125,000 and includes professionals in more than
100 countries.

HRCI’s positive inflection point has resulted in a growing customer base, increased purchases as individuals choose to take more than
one certification, loyalty during an economic downturn, and a real move up market, claiming and owning their niche. Let’s now take a
look at the four targets of innovation in a little more detail.
1. Grow Your Base
Expanding your customer base depends on five factors:
i. Current customer satisfaction
ii. Desire for your offering
iii. Your reputation as a provider
iv. A value proposition you can deliver
v. Effective outreach
Any one of these factors can significantly limit or enhance the development of new customers. Done well together they create synergies
that enhance, reinforce, and build upon each other.
HRCI increased customer satisfaction by providing a myriad of free opportunities to certificate holders (webinar, exclusive events, high-
quality magazine). HRCI’s new offering, the GPHR, comes at a time when global expansion is hitting its stride, generating pull from the
market. The overall effort has raised HRCI’s esteem in the market and increased its reputation as a provider.
Because certification is respected in the market, it is used by certificants to increase their professional standing or add visible value as
they pursue jobs in a tough market. Further, because the certification is field tested and continually improved it genuinely adds business
value to certificate holders, delivering the HRCI promise.
Johnson’s systematic outreach through a variety of channels (face-to-face, online, print) has effectively communicated HRCI’s benefits
to its target audience.
2. Getting a Bigger Buy
A bigger buy means that you are growing the amount of spend your customers are giving you, as opposed to other providers they can
choose for the same services or products. HRCI got a bigger buy from their audience by expanding the certifications they provided,
making it possible for individuals to pursue more than one.
Professionals can expand their expertise as they rise through the ranks from Professional in Human Resources to Senior Professional
in Human Resources. If they are operating in a global environment they can also become certified as a Global Professional in Human
Resources. Those who already hold PHR and SPHR credentials and want to become expert in regulations and legal mandates specific

to the state of California can earn the additional certificates, PHR-CA and SPHR-CA. In this way HRCI has increased the spend clients
can give them.
3. Improving Loyalty
One of the biggest market challenges in recent decades was the 2008 economic downturn. Many leaders found holding onto their client
base exceptionally hard. Any weakness in customer relationship became stark as portfolios shrank and customers took a hard look at
their spending.
HRCI increased loyalty at a time when others were losing it by establishing their presence as a thought leader in strategic HR during
the economic downturn. They associated their certifications with job success. It was a way out of dismal prospects in the minds of their
customers. Certification is both a job security tactic and a job-seeking strategy. It became necessary in an environment riddled with job
loss and the resulting uncertainty, a buffer against difficult circumstances.
4. Increasing Market Prominence
HRCI shifted their position out from under their progenitor’s shadow to create a center of gravity all their own, establishing a global
brand and attracting new clientele through their reputation as the thought leader for strategic HR. They increased their market
prominence significantly.
Innovation is not an end; it is a means to a business objective. Bennie Johnson is growing HRCI through innovation that achieves all
four of the objectives I list here. Which of these objectives are you after?
image credit: jonathanphotos.com
Seth Kahan helps leaders on large-scale change and innovation. Designated a Thought-leader and Exemplar in Change
Leadership by the Society for Advancement of Consulting®, and a Visionary by the Center for Association Leadership,
he is the author of the bestsellers, Getting Change Right and Getting Innovation Right. Clients include the president
of World Bank; the director of the Peace Corps; Royal Dutch Shell and 30+ association executives.

Innovators Get Better With Age
Posted on May 7, 2013 by Gijs van Wulfen
Tom Agan wrote an inspiring article in The New York
Times on innovators and age. According to research by
Benjamin Jones of Northwestern University, a 55-year-old
and even a 65-year-old have significantly more innovation
potential than a 25-year-old. He based his conclusions on
data on Nobel Prize winners and great inventors.
Do innovators in companies also get better with age?
I am 53 now, and have been working for 25 years. I think I
became a better innovator, for three reasons:
1. I first had to learn the patterns before breaking them.
As junior manager I was very eager to learn at the first
companies I worked for. I learned what made them successful in the past. And to be effective I adapted myself to “how things are done
around here”. As I got older I dared to challenge and break patterns within the companies I worked.
2. I learned from my mistakes. Breaking patterns wasn’t always successful. But I learned continously from my mistakes. This created
a better business intuition of what will work and what will not.
3. Grey hair helps convincing others. In companies you can’t innovate alone. You need a lot of others to get an idea out there on the
market. Getting older, growing grey hair helped me in getting confidence of others to follow me and my innovative concepts and
methods.
So what about you? Are you getting a better innovator with age?
image credit: green business image from bigstock
Gijs van Wulfen leads ideation processes and is the founder of the FORTH innovation method. He is the author of
Creating Innovative Products & Services, published by Gower.

Building Up Innovation Capital
Posted on May 3, 2013 by Rowan Gibson
As usual it was Peter Drucker, the godfather of modern management, who
said it first. Right back there in 1966 (!), in his landmark book “The Effective
Executive”, Drucker argued that companies would need to build a new kind of
organizational capital as the industrial economy gave way to the knowledge
economy. His famous proclamation was that, in future, brainpower would be a
more valuable asset for wealth creation than factories and financial clout. All
of which came true, of course. But that was not the end of it. Now, over four
decades later, we are once again challenged to rethink organizational capital
as we make the transition from a knowledge economy to an innovation
economy. And that creates a new agenda for every single company.
For most of the last century, as well as the previous one, we looked at companies as if they were comprised of only two kinds of capital:
financial and structural. Financial capital obviously refers to a company’s balance sheet. Structural capital is the value of its physical
assets – its networks, facilities, warehouses, plants, inventory, and so on. Thus, if we had gone back and spoken to the super-rich
industrialists and financiers of the late 19th and early 20th century – such as Vanderbilt, Rockefeller, Carnegie, and Morgan – they
would have told us that this was the only way to measure the worth of an enterprise.
Move forward a few decades and the same would have been true if you had talked to great business builders like Henry Ford, Alfred P.
Sloan, Thomas Watson Sr., or any of their corporate accountants. What counted back then was the tangible stuff that is easy to
quantify and monetize on a financial statement.
In the 1980s and 1990s, that began to change. In large part because the stock market value of companies was beginning to get out of
all proportion to the “book value” of their physical assets. Microsoft, for example, had an almost 8-to-1 ratio of market value to physical
assets value. And when Philip Morris bought Kraft in 1988 for $12.9 billion, the “hard assets” of the firm were calculated to be worth
only $1.3 billion. That means Philip Morris was paying a full $11.6 billion – or 89.9% of the transaction price – for “other stuff” that
wasn’t even on the balance sheet: intangible stuff like brand equity, marketing capability, and so on.
British futurologist Hugh Macdonald coined the phrase “intellectual capital” to describe these intangible assets. He defined it as
“knowledge that exists in an organization that can be used to create differential advantage.” And in a seminal article in Fortune
magazine in 1991, Thomas Stewart wrote that “every company depends increasingly on knowledge – patents, processes, management
skills, technologies, information about customers and suppliers, and old-fashioned experience. Added together this knowledge is
intellectual capital.”

From then on, we had three forms of capital – three basic kinds of assets – with which to measure a company’s worth. But in a new,
innovation-based economy, where value-creation is the new Holy Grail, the way we define, measure and manage organizational capital
is again woefully incomplete. In 2001, strategy guru Gary Hamel argued that financial, structural and intellectual capital, by themselves,
do not create new wealth. And I agree with his astute observation. Think about Kodak. If any company on earth ever had huge amounts
of money, massive dealer and supplier networks, giant manufacturing plants, countless technological patents, well-oiled management
processes, tons of customer information and decades of industry experience, it would have to have been Kodak. Yet where is Kodak
today? In effect, all of those assets proved to be almost worthless in terms of creating new wealth.
Hamel’s view is that the three traditional forms of capital are largely inanimate. In today’s competitive era, they need to be animated or
catalyzed by three new kinds of organizational capital if we want to translate them into wealth. He calls these “imagination capital”,
“entrepreneurial capital”, and “relationship capital”, all of which are different forms of human capital.
Consider the first one. Most companies would tell you that knowledge is a critical resource. Many large organizations have internal KM
efforts aimed at sharing information and experience across the firm with a view to continuous improvement. But in a world where the
pace of change has gone hypercritical, we’re finding out that success has less and less to do with learning from the past, and more and
more to do with imagining future opportunities. Knowledge has become a commodity. Let’s face it, you can go online and find out
almost anything with just one or two clicks. So the issue is not how much you know but how creatively you can leverage what you know.
Today, the advantage increasingly goes to those firms that develop “imagination capital” – which is the capacity to dramatically
reconceive what the firm is and imagine entirely new uses for its financial, structural and intellectual capital. Einstein’s oft-quoted
reflection that “imagination is more important than knowledge” becomes the mantra of the innovation economy.
Second, companies need to develop their “entrepreneurial capital”, which means building the entrepreneurial spirit into many, many
employees across the whole organization, not just in an incubator or some new venture division that exists out on the periphery of an
otherwise orthodox company. It’s about creating a cultural environment where the entrepreneurial spirit is everywhere; where ordinary
employees can have the courage to experiment and try something new, where they can get unfettered access to the financial and
human capital they need to push their ideas forward.
The third of these new kinds of capital is “relationship capital” (or what I would call “network capital”), which refers to the connections a
company can make between previously isolated people, ideas, resources and domains – both across and beyond the organization.
Innovation is so often about spotting the opportunities that come from recombining and blending all of these ingredients. The quality of
a company’s network of relationships – its ability to connect with individuals and organizations that have very different skill sets and
capabilities – is becoming more and more critical to its own capacity to innovate.

Here’s the sad reality: most companies don’t have a clue about how to support the development of these new forms of capital. So the
challenging agenda for organizations around the world will be to think about exactly what it takes to build, measure, manage and exploit
what amounts to their “innovation capital” – which is so essential to creating wealth in our times.
image credit: quotes.com
Rowan Gibson is widely recognized as one of the world’s leading experts on enterprise innovation. He is co-author of the
bestseller Innovation to the Core and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

Do You Really Know What Business You’re In?
Posted on May 2, 2013 by Tim Kastelle
Stop and think about the computer you’re carrying around with you right now. Not your laptop, your phone.
Actually, maybe calling it a computer is selling it a bit short.
Check this out:
The picture is from here, and it raises several important innovation points:
1. Your market is never stable. Did phone makers think they were in the camera business in 1993? What about camera makers?
We’ve seen an incredible collapse in categories as many different industries become increasingly IT-based. When something like this is
happening, you need to be thinking about your business model. As your market changes, it opens up new opportunities for
collaboration and value creation, as well as new threats. There is a pretty good chance that your business model will need to change as
the boundaries of your market shift.
2. We’re all in the knowledge business now. The control room for a mine looks identical to the control room for a space shuttle
launch. Construction companies now are more concerned with getting the right data to the right people at the right time than they are

with traditional logistics. Again, this means that you need to be thinking about your business model. It’s getting increasingly difficult to
build a competitive advantage based on keeping your customers ignorant (think of the way cars were sold pre-2000 or so). Even if
you’re making stuff, knowledge flows are really important.
3. It’s pretty cool! I don’t know about you, but I think it’s pretty cool to have all that capability packed into one device. Yes, it has
downsides. It’s dumb to be checking email right when you wake up like I nearly always do. But that’s also part of figuring out the best
way to use new tools – do dumb stuff until you find the best applications. Even though some say that we’ve run out of big ideas, I
think that we live in pretty amazing times.
The transition from brick-sized handsets to palm-sized supercomputers would have been unimaginable for most of us in 1993. On the
other hand, as William Gibson said, the future is already here, it’s just not evenly distributed.
So what ideas that will be transformational by 2033 are here already? What impact will these ideas have on the business that
you’re in right now?
image credit: confused businessman image from bigstock
Tim Kastelle is a Lecturer in Innovation Management in the University of Queensland Business School. He blogs about
innovation at the Innovation Leadership Network.

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Innovation Excellence Weekly - Issue 32

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Innovation Excellence Weekly - Issue 32