NESTA Connect

Innovating with less

I remember the last recession, when clients of my ad agency Grey were slashing marcomms budgets left right and centre.  I recall thinking at the time that this was a rather indiscriminate carnage and this thought has reemerged.  NESTA and H-I Network are working on a piece of research called The Changing Shape of Innovation in a Recession.   Here's my hypothesis:

 

In recessionary times company priorities shift towards incremental, step-wise improvements of existing products and services and away from capital intensive and risky new products and services.  In addition, in an era of "creative destruction" companies can be forced to reappraise their entire model and look for profits elsewhere.
The few corporates I have exposed this thinking to so far have broadly agreed with it and the research will hopefully confirm this.  What the UK does about it is another question.  My own view is that the time is ripe for new, more open, ways of innovating which can less costly and more productive.  Maybe a by-product of a closer examination of different strategies will be that 'innovation' won't all be tarred with the same brush when it comes to corporate cost cutting and that as a consequence businesses will be in a better shape to emerge from the down-turn than last time. Comments, as ever, most welcome. 

The economic promise of connectedness

 

Our social networks are growing all the time. Can we assume that there is untapped economic that lies within them? I think this remains an as yet unproven but tantalising question.

At an organisational level, companies such as facebook and bebo achieve huge valuations based on their user numbers not on their revenues. But does this really make solid business sense? I suspect they are massively overvalued but not because the assumption is wrong to focus on user numbers, rather because newer, better designed networks will replace them and those users will migrate elsewhere.

Ambient relationship building

At an individual level, British anthropologist Robin Dunbar has shown us that people can only maintain up to around 150 strong relationships at any one time however we all have many more weak relationships (which probably also has an upper limit but it's certainly a lot larger number). I find social networks like facebook and twitter most interesting for the people I don't yet know that well - for the weak relationships. I get an insight into those people’s lives and how their mind works and get to know them a bit better.

This ambient relationship building can be useful in the longer term as you a) you may learn something about them that might be of use at a later date i.e. they are an expert in a field you need to know about or b) it eases the social lubricant when you next see them as you have more material to draw upon to build the relationship e.g. I saw the photo's of your recent fishing trip on facebook. How was it? 

Network value potential

Metcalf's law which tells us that in (telecommunications) networks, the value of a network 'V' is proportional to the number of connections squared i.e. if the network doubles in size, its value quadruples.

Doing a ‘back of fag packet’ calculation based on my own social network I would estimate that my network of weak relationships has (conservatively) doubled thanks largely to social networks in the past 5 years which would result to a 56% increase in ‘network value potential’*. I suspect this type of increase would apply to many people I know and also to organisations as well. However most of this ‘increase in value potential’ remains untapped as we still don’t really know how to capitalise upon it properly.

Quantity verses quality

It definitely feels morally wrong and calculating to try to quantify your relationships – what about quality. I certainly hate ‘networking events’ where people are a bit too calculating and trying to sell you something as soon as you meet them without establishing any rapport or quality relationship. What I like about social networks is that in a small way, as I said earlier, you are building better quality relationships with lots of people ambiently and you never know when that might come in handy in the future.

Moving from 'what' to 'who'

As I've said previously (here) I believe that within the next 5 years we tend to create value not on the basis of our knowledge, but on the basis of how we can leverage our relationships or social networks to capitalise on the information that we all have access to. This will not be easy but I would argue that those unable to make the shift will be (or are being) left behind. Notwithstanding our own personal social networks, I’m most interested in how organisations can tap into their own organisational social networks and build value upon them. This poses major challenges for the traditional hierarchical organisations.

The jury is still out and many people and organisations are quite rightly sceptical about the economic value of connectedness. However for me it’s simply a case of the more connected you are, the more options and opportunities you have, and that has social, cultural and economic value.

 

*This 56% figure takes into account the fact that strong relationships are worth a lot more to me than weak relationships, I’ve assumed 10 times more important. I’ve assumed my number of strong ties remains constant at 150 but my weak relationships have doubled from 500 to 1000. I’m happy to show more detail behind this calculation if required.

webank: new peer-to-peer finance report

Since the webank event held at NESTA earlier this year, we've certainly noticed how peer-to-peer (p2p) finance has been making a lot of headlines of late - perhaps most notable amongst them was the Harvard Business Review calling P2P finance one of the breakthough ideas of 2009.

Following this inaugural event, we're pleased to announce that the first webank research piece - a p2p overview and number of business model case studies - is now available here.  It is also attached here for your convenience. The full video set from all the presentations and vibrant discussion are also available from the site.

We are interested to hear your ideas for topics and areas for future events around financial innovation enabled by digital technology.  Also if you would like to contribute or suggest new directions and resources for the dedicated webank site - we would love to hear from you.

Did video kill the radio star?

It can be quite difficult to communicate the underlying ideas and concepts that our projects are based on. It is also quite difficult to succinctly present the things that we learnt from any given project. So, as well as using video ethnography to evaluate our projects, we've been experimenting with the use of video as a form of communication.

There are a number of videos now on our website, for projects such as the P&G Open Innovation Challenge and Crucible. There are lots more here.

We'd love to get some feedback about how effective you think this approach is.

The Campaign for Extreme Collaboration

Welcome to the Campaign for Extreme Collaboration which is underpinned by the following core beliefs:

1. All innovation is fundamentally collaborative
2. Different perspectives aid problem solving
3. Extreme collaboration triggers leaps forward
4. Ideas are easier than relationships

What are we campaigning for?

We are campaigning for more space, licence and opportunity to collaborate and exchange ideas across organisations and sectors to tackle big global challenges.

Why does it matter?

The campaign for extreme collaboration has resulted directly in response to three major trends we see in education, business, academia, government etc (i.e. all around us): a) a tendancy towards over-specialisation, b) a counter-productive obsession with being productive all the time and c) the speed and cost of accessing information tending to zero. We believe that such narrow/silo'd/individualistic approaches are inadequate in dealing with the big global challenges which we think require collaborative solutions.

The solutions are already out there - let's find them!

Organisations can no longer compete on the basis of their knowledge alone. In fact it is increasingly their trusted relationships with others which are becoming critical to their success.

What can you do?

We are now looking for like minded people who share our vision to help shape our thoughts and activities and instigate large scale change. If that sounds like you, please join this facebook group, tell your friends, and tell us how we can collaborate to achieve our mission. Right now we we are looking for the following:

Further examples of hidden connections between fields.

Good case studies of successful extreme collaborations.

Practical advice how to create successful collaborative organisational models.

Thanks

Informal networks and innovation capacity

How do cigarette breaks, gossip and other informal networks influence your capacity to innovate? I would argue they do more than we think (even if you arn't a smoker!). Come along to this free event on March 20th with Dr Karen Stephenson to find out more.

The aim of the workshop is to provide you with a framework and language to identify the roles played by people in your team or organisation, providing you with a more holistic view of how they operate.  This understanding will enhance your capabilities as a leader or manager and help you to develop efficient networks that maximise productivity through trust-based relationships.

Dr. Karen Stephenson, an influential social network theorist, will argue that the association between trust and learning is an instrument of vast, if frequently untapped organisational power. “People have at their very finger tips…tremendous amounts of tacit knowledge, which are not captured in computer systems or on paper. Trust is the utility through which this knowledge flows.”