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Excellent piece in Business Week by G. Michael Maddock and Raphael Louis Vitón, about four trends that “are shaping innovation in the near term” and how “companies that take advantage of these trends give themselves an almost unfair advantage over the slow-footed or unaware.”

1. “What some companies call departments and partners are too often emblems of inefficiency … small, cross-functional teams are the key to driving industry-changing products, services, and new business models to market whether you work in a big company or a small one. To ensure that silos are not an issue, some companies are even putting these teams in another building and saying, ‘you have one year to change our world—go!’”

2. “Open innovation” is key to corporate success – because it acknowledges that sometimes the best ideas come from outside an organization. One example – Procter & Gamble CEO AG Lafley, who realized that “50% of their innovation must come through R&D, not from R&D. By doing this, he was helping create a culture of learners instead of knowers. He was pointing out that his people were often too close to a challenge to see opportunity. He was giving them permission to find expertise outside the company. This declaration resulted in an increased success rate, lower costs, and greater speed to market.”

3. Social media can stimulate innovation: “Innovation is about insights, ideas, and communication. Online communities are often a perfect place to find and test insights. Online influencers are redefining the focus group … Here's the kicker: The emergence of social-media tracking tools give researchers and marketers alike a bevy of instant information to optimize targeting, messaging, and new product ideas.”

4. “What would happen if you paid a team of really smart people who knew virtually nothing about your industry to take an objective crack at building a product, service, or business model that would rock your world? What if these people used a rigorous innovation process and had access to all research and direct contact with every department head?” The result, in all probability, would be a kind of “war game” that could create revolutionary change within an organization, rather than by a competitor that could put a company out of business.

KC's View:
The common ingredients in each of these trends seems to be that 1) it is almost impossible for innovation to come from within an organization (unless the culture is highly unique), and 2) in order to have long-term viability, organizations have to be working to put themselves out of business every day. There are no more important mandates if one is to survive in a 21st century business environment.