Many organisations have read about lean start-ups and minimal viable products, are excited about applying design thinking, and have adopted agile work practices. However, often innovation remains shallow.
New business models are being hyped up as ‘disruptive’. However, upon closer examination the disruption often only amounts to a change in wallpaper.
Furthermore, in those cases where an innovative business model or product survives the first few years and becomes profitable, success is measured in traditional financial metrics, putting the needs of investors above the needs of customers, employees, and suppliers, and above the well-being of society and the ecosystem of the planet.
The dogma of financial profit and capital gains that underpins the global financial system creates a systemic bias in economic and social decision making towards faster and faster flows of economic goods.
On the surface, during times of exponential growth of the human population, the model seems to work. As soon as population growth falls behind or levels off, the financial system demands greater and greater levels of consumption to deliver the anticipated returns on capital.
Consumption levels of material goods in the so-called developed world already surpass the planet’s ability to deal with the by-products of economic growth, i.e. excessive CO2 emissions, unsustainable energy use, loss of biodiversity, and toxic substances that are released into the environment.
As long as all these effects are largely treated as irrelevant economic footnotes, attempts at innovation and related calculations of economic benefits remain fundamentally flawed.
Towards a useful working definition of deep innovation
To avoid disappointments, innovators must look at concepts such as lean start-ups and minimal viable products through a new cognitive lens. Economic externalities can no longer be ignored. Globally up to 80% of employees are disengaged from their jobs. Why? Likely because many companies can only explain the purpose of their existence in purely financial terms, if at all, by shifting all inconvenient by-products of business as usual into cognitive blind spots.
Fewer and fewer people see the point of developing, selling, and consuming products that are not sustainable in more general economic terms. In order to re-establish credibility and employee engagement, businesses must reserve the term innovative for products and services that are not only well liked amongst customers, but that also contribute to reducing the ecological footprint of humans on this planet.
Deep innovation can be understood as the process of re-framing a subset of economic activities such that linear ‘take, make, dispose’ value chains are transformed into zero-waste value cycles.
Deep innovation is a wicked challenge, requiring interdisciplinary collaboration and significant amounts of original creativity.
The concept of deep innovation can be used to attach a tangible purpose to the notion of a lean start-up, beyond the shallow goal of capital gains for investors. Deep innovation results in minimal viable products that employees can identify with, for which there is a market beyond the dwindling numbers who still embrace conspicuous consumption under the guise of saving the economy.
Trivialising wicked problems by ignoring externalities is easy. Addressing wicked problems head on is a lot harder – and a lot more rewarding.
Deep innovation is required to realise any significant economic gains in New Zealand
There is no shortage of concrete challenges and opportunities:
- Agriculture – to reverse the loss of biodiversity and to eliminate or recycle the waste products caused by intensive farming
- Healthcare – to maximise pro-active health enhancing measures and to develop smarter metrics for measuring health outcomes
- Energy – to transition to a resilient and sufficiently decentralised supply of sustainable energy
- Transport and logistics – to take full advantage of emerging technologies such as self driving electric vehicles and trains, and intelligent software solutions that optimise the utilisation of vehicle fleets and transport infrastructure
- Housing – to create incentives for constructing zero-energy buildings and addressing the CO2 emissions from fossil fuel powered heating systems
- Culture – to unlearn unhelpful behavioural patterns and replace them with new behaviours that radically alter the demand profile for energy, healthcare services, and transportation, such as: establishing a preference for human powered vehicles over machine powered vehicles, working locally or via digital collaboration rather than accepting long commutes, decentralised urban agricultural production, etc.
Any gains in these areas will not only deliver local benefits, they also result in know how and technologies with significant global export potential.
Interdisciplinary Innovation and Collaboration 
Good post thanks. As the venture capitalist, Peter Thiel has commented, the most successful businesses didn’t start with an aim to make money. They wanted to change the world. Motivation and inspiration behind a societal purpose is important, but as the article points out, so is the innovation that connects the enterprise to that purpose. There are big changes going on beyond New Zealand’s borders. We need to be leading them, not following the stories. New thinking from across society – new and established businesses, but also business associations, research institutes and universities, professions, local government and perhaps most urgently, central government.
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Yes, solutions to the problems that participants have submitted to CIIC require divergent thinking from a range of different perspectives, across all the institutions that are involved in shaping culture and individual behaviour. It helps to look beyond New Zealand to step outside the box of familiar cultural assumptions, and to apply creative talent and domain specific expertise outside the familiar box rather than inside.
In terms of the speed of implementing and validating new approaches, the small size of institutions in New Zealand can be a real advantage, but only within an updated economic framework that does not override the biological instinct to collaborate with an outdated and overly competitive view of human nature. Courageous experiments must be supported, and failure must be treated as an opportunity to learn and move forward, rather than backward.
The following book provides excellent examples of organising and scaling economic activity and innovation unencumbered by traditional hierarchical decision making processes: http://www.reinventingorganizations.com.
To communicate the full impact of economic orthodoxy and the urgency for action to a wider audience, the following movie may be helpful: http://truecostmovie.com.
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