Brilliant post by fellow Corante contributor Grant McCracken this week. Just brilliant. In Innovation for The Innovator, Grant spells out the fundamental shift (and struggle for survival) faced by corporations today:

"The corporation once had a "perfect world" scenario: create an extraordinary product in a blue ocean (i.e., new) category and defend a fountain of profit with good strategy and smart tactics.

In the perfect world, change came in increments. Some competitors would enter the category with some variation on the theme. Others would look for "nook and cranny" weaknesses. The corporation would secure it's position with incremental responses...and profit poured forth.

The world changed."

Per Grant:

"Now, the corporation is subject to blind side hits. Now the problem is not incremental challenges, but fundamental shifts. For Time Warner, this was the rise of an advertising based revenue model. For The Coca-Cola Company, it was the rise of the non-corbonated soft drink. For Microsoft, it was the rise first of the internet and then server-based software. For Detroit, it was Japan. (The irony: while American corporations are being encouraged to set out in search of "blue oceans," the real challenge are the great masses of water that come looking for them.)"

And here's the rub:

"These changes require fundamental shifts in corporate assumption and practice. And this is hard. Corporations rise to greatness because they are good at, say, CSDs (carbonated soft drinks). The advent of Snapple and Gatorade forces them to take on the new, but often this feels like a betrayal of the very things that make the corporation exceptional. "Sure," goes the complaint, "we can make fruit juice, but what we exist to make CSDs!"

It is, finally, a cultural problem. CSD assumptions supply not just the "what" and the "why" of the corporation, but it's deepest, most powerful, and least visible assumptions, the "unknown knowns," we might call them (with apologies to Donald Rumsfeld).

The problem at corporations like Time Warner, the Coca-Cola Company, Microsoft and "Detroit," is not intellectual laziness, a failure of the imagination, or, God knows, a failure of will. The problem is that non-incremental change forces the corporation off its game, out of its competence, and away from its deepest understandings of the world. Adaptation is possible, but a voice of warning sounds in the head of the senior manager: that way lies the destruction of the extraordinary intellectual, strategic, and cultural capitals that make us who we are. That way lies chaos."

Fear? Say it isn't so! For young companies, fear of the unknown and an aversion to risk seemeasy to overcome, but an aversion to change is pretty much a survival mechanism for our larger, much older incumbent competitors and friends. That aversion to change, that conservative need to stick by core competencies, proven methodologies and core product lines are part of their corporate DNA. You can't fault them for holding on to what they know. For holding to to their core. To the very foundations of their brands.

Yet, in order to survive... no, to strive in this new and ever changing business landscape, a few changes need to be made, and Grant offers a few keen suggestions:

"There are lots of ways to rethink the corporation so that it can address the problem of non-incremental change. (...) The corporation is learning new tricks. The new corporation is being invented fitfully, gradually, and painfully. But it's coming.

Innovator's innovation 1

What I would like to see, for deeply self interested reasons, is the creation of an observation platform from which we can keep an eye out for the next new things. In keeping with our Tsunami references, let's call it a wheelhouse, a conning tower, or a ship's bridge.

The trick would be to find 5 or 6 really smart, well educated, well informed, well connected, deeply curious, utterly practical people. These qualifications create a tiny Venn intersection, but, hey, we only need 5 or 6 people.

Innovator's innovation 2

Once potential changes are identified, it is time to see what difference their difference will make. How will the corporation as it is presently constituted in these particular waters? This will help us to find, extract and replace the "unknown knowns" in the corporate culture.

Innovator's innovation 3

Ok, now we need to build a series of simulated corporations, fit them out, run them in a tub somewhere, and refit as necessary. (Will someone please scuttle the naval metaphor, please!) We can't wait till the future is here to start the work of adaptation. We want to have done the conceptual work for eventualities well before they eventuate."

This sounds dangerously like... another "think tank" but because of its focus on practical applications, it might actually have some merit. Only there are just too many industries and different kinds of companies making different kinds of products for a small team of brilliant Rennaissance men to cover anywhere near enough ground.

Perhaps another way to help transform the corporation into an adaptive, evolution-savvy entity is instead to rethink the way business management is taught and practiced around the world. The very structure of corporations may also need a healthy revision.

The key here is to incorporate into corporate cultures the very notion that change is not only inevitable, it is also the natural vehicle by which corporations evolve. (And yes, I am talking about evolution here, and not just growth. There is a difference.) Corporations, through their leadership and processes, should be energized by change instead of being paralyzed by it. The way to accomplish this is to make change easy to assimilate. In other words, corporations should learn to become more agile. More nimble. More flexible.

Grant's idea of creating corporate conning towers is excellent. Why not form an advisory group composed of trend-savvy multi-dimensional executives (or consumers) to help point the way and make course adjustments? Make these people completely independent from Senior management. Don't even pull them from the corporation's ranks. Set them up with offsite offices. Pay them as consultants instead of employees. Keep them completely outside of the sphere of influence exerted by the corporation's board and leadership. Make them accountable, sure, but protect their independence and insulate them from any unwanted political/financial influence.

More importantly - and for this to work - corporations must fill their ranks and executive suites with intellectually curious, practical, open-minded, men and women. Leaders instead of just managers. This requires a fundamental shift in corporate culture and HR practices. It also requires a fundamental shift in the way that Business management is taught in Universities and business schools. And lastly, it requires a certain measure of courage (and faith in our own abilities) on everyone's part. There are no failsafes. Proven methodologies only prove that they have worked in the past. The past is nice, but the present and future are a little more uncertain. Facing them both with the knowledge that fifty years of success are not enough to ensure the same success for another fifty, or twenty,or five takes huevos. It takes the wisdom and confidence to be able to readily admit that as a CEO, you have absolutely no idea if what you're doing now is the best way to address your company's goals.

Sure, everything might look good. The numbers and research might be supporting your hunch... but you really don't know. Plan A: Your Germans had better be better than their Germans. Plan B: You had better be at the helm of the kind of corporation that can make quick course adjustments when it turns out that their Germans were better than yours after all. (Plan C: Make sure you're hiring the right kinds of Germans... and that they have a great reason to stay.)

Safety in the world of business is an illusion. At best, it's a crutch. It's 4% growth. It's always being second or third to market. It's being a player but never a leader.

Wait... did I say "at best?" Darn.

I guess it depends how you choose to look at it.

Times, they're a-changing. The corporation that will adapt and evolve to the new market and business landscape will survive and grow. The corporation that doesn't evolve will simply wither away and die.

Welcome to the new jungle. Welcome to the real world. Welcome to the world of endless business and innovation possibilities.

Now... about that corporate conning tower team...

Foghound and Corante's Lois Kelly posted a terrific set of quick observations inspired by the BIF2 Collaborative Innovation Summit held October 4-5 in Rhode Island. Here are the highlights:

Innovation is not a process. It’s creating an environment that helps teams of people quickly build trust and relationships. Then people have the right framework to create.
Ivy Ross, executive vice president, product design and development, Old Navy on the secret of quickly getting new ideas from teams

Innovation is often just looking at what you have and taking it somewhere new.
Diane Hessan, CEO, Communispace on the value of really knowing your customers

Whatever Budweiser does, we do the opposite.
Mark Hellendrung, CEO, Narragansett Beer, on the wisdom of NOT copying the market leader

Nothing happens without an innovation intent or point of view.
Larry Keeley, Doblin Group, on the most common obstacle to innovation

Just by making half a turn the whole world can change.
Liz Lerman, founder of the Dance Exchange on how taking a slightly different view can help us see new things

Sometimes doing research is an excuse for not doing anything else.
Jane Fulton Suri, chief creative officer, IDEO, on the need to rediscover the value of research – observing patterns and themes in new ways for inspiration, imagination, empathy

But I couldn’t let that stop me.
Josh Koppel on what he did when Apple iTunes 7.0 in effect killed his innovative TuneBooks products two weeks ago

There too much design research and process around creative beautiful objects and not enough on the customer experience.
Jeneanne Rae, president of Peer Insight, on the huge lack of understanding around services innovation and understanding a customer’s entire journey

A good marriage is about a conversation, not sex.
Day One moderator Richard Saul Wurman on how conversations connect people and ideas in meaningul ways

Execution is successful only if the author of the idea passionately embraces the execution team.
Mary Pat Ryan, executive vice president, Sirius Satellite Radio, on the critical need for passion to transcend the big idea and seep into everyone making the idea real

There’s more history under the sea than on the earth
Oceanographer Bob Ballard on the value of creating new technologies that can help children explore what’s under the ocean, from ocean exploring vessels right to the classroom

“They are us.”
Inventor Dean Kamen on the need for people to get more involved in helping kids realize what a blast science, engineering and technology can be, urging tech types to volunteer in the FIRST program

All new ideas are combinations of existing ideas.
Frans Johansson, author of The Medici Effect, on the tremendous value of combining ideas from different fields and looking at the connections and intersections of those ideas

It was difficult to reconcile my desire to be an artist with the reality that I was an administrator.
Roger Mandle on how he came to see his role as president of RISD as one of an artist, creating an environment for creativity and innovation, like onoing performance art among talented people

If you suppress one factor too much it can lead to other problems.
Bill Tsiaris, surgeon-in-chief of Ophthalmology, Rhode Island Hospital, on the complexity of angionesis

Don’t be a star, be a galaxy.
Peter Gloor, MIT professor and author of Swarm Creativity, on the value of connecting talented people to achieve innovation

Social networks like MySpace have nothing to do with core relationships. They are impermanent really just advertising vehicles.
Wall St. Journal columnist and conference Day 2 moderator Walt Mossberg on the value of going to conferences like BIF2 and meeting people face to face

Theater is where civilizations throughout history have shaped their democracies. But make no mistake firends, Broadway is not a democratic place.
Trinity Rep artistic director Curt Columbus, on the value of regional theater as the vital public square for people to talk about ideas shaping their communities and lives.

What’s the next great idea for you? What is the next big chapter in your life?
Randy Antik, founder of Swat Team Partners, on the questions worth asking ourselves to stay passionate, engaged and innovative

The other day I was thinking that the brain is the most important organ in the body. Then I realized who was telling me this.
Several speakers paraphrasing comedian Emo Phillips, pointing to the need to consider the source and its intent when assessing information, and criticism.

And lastly, straight from the Corante Innovation Hub, Lois' observation on the need for recruiters to create or incorporate innovator-finding tools in their searches:

After digesting all the stories from BIF-2, there seems that innovators have one trait in common: they look at gnawing problems -- whether it's how to get more kids invovled in science and engineering like Dean Kamen's First program or how to get more innovative ideas from teams really fast like Ivy Ross at Old Navy -- and then figure out the problem. With two parts logic and analytical thinking and eight parts passion, determination and relenetlessness.

If organizations want to be more innovative maybe it's time to hardwire these qualities into more hiring practices, and performance and reward systems. Just because someone has experience in a field or industry with a a name organization doesn't mean that that person is a good hire -- or its the least bit creative, passionate or, well, innovative. Most hiring requirements are Neanderthal, and seem to be designed to eliminate risk-taking, problem solving types who could make a difference. Executive recruiters exacerbate the problem.

Case in point: Alph Bingham of InnoCentive remarked at the conference that many of the brilliant "solvers" in his network would never be hired by companies whose most difficult problems they just solved.

Not all recruiters fall into this category (I was recently contacted by two of them who were very much on top of their game,) but for the most part, yes: Far too many recruiters and HR departments still completely miss the mark when it comes to not hiring average people with safe but good resumes.

At the end of the day, the responsibility falls on both the leadership of a company AND the recruiters they employ to emphasize the fact that they are not just looking for someone with the right kind of experience, but rather... someone with the right kind of talents. Not everyone is good at math. Not everyone is good at writing copy. Not everyone is good at taking photos. Likewise, not everyone is good at helping companies innovate or challenge the status-quo, or bringing the next trillion dollar idea to fruition. Finding people who are takes more than letting software skim through piles of resumes, or using irrelevant keyword searches to sort through potential hire profiles.

If you're a recruiter, start attending innovation conferences. Start attending major trade shows and talk to product managers and designers. Start spending time on the blogosphere. Extend your network beyond the realm of HR. And lastly, stay in touch with people you've helped recruit in the past. Chances are, they know a handful of spectacular people who could be your next client's dream. If you're any good, your address book should have hundreds of names in it. Each one of these names could generate decades-worth of contracts for you, and billions of dollars in profits for your clients. Don't just cast a net. Seek to meet these people. Find out where they congregate, and meet them there. Face to face. Find out who they are and what they're all about. 500+ to a room. How much better does it get? Football scouts don't just look at resumes and game stats. They go watch the players they're intrested in. They go watch them work. And it works.

Until recruiters start doing more than casting nets, until they start actually seeking to meet the kinds of talent they should be meeting with, companies will continue to struggle in their crawling search for their next batch of innovation commandos... And there is just no reason for that. Not anymore.

There's a problem that needs fixing here... and recruiters with the most innovative approaches to doing their jobs certainly stand to benefit the most - aside from their clients, of course.

Innovation is a choice. Either innovate or die. Like it or not, that is the reality of the world we live in.