If someone came to you and asked the question: “tell me what makes up your financial capital?” I expect you could answer this fairly comfortably. It might need a little added help from your finance department but you could produce and show significant details that we are all ‘schooled’ to understand and generally have accepted, as under common definitions and standard practice.
Our businesses are measured constantly on their financials, we produce a constant flow of reporting documents that provide useful insight and allow for a more informed judgement by present and future investors on the health of the company.
We are ‘wedded’ to our financials and ignore the real value within our organizations of all the other critical capitals that generate and strengthen the business, yet these are the MOST valuable to leverage.
What if that same person came to you and asked instead: “what makes up the innovation capital of the company?’” could you answer this as clearly as the financial one? I would suggest most probably not. (By the way, if you feel you can then please let me know I would be more than interested).
We are focusing far too often on past performance and not future generating potential. We constrain ourselves, our growth and our potential by staying fixated on just the financials, constantly worried over the short-term results and not equally building and developing our capabilities for the future, this building capabilities and capacities begins to makes up our future organizational capital.
So what does makes up our innovation capital and why is it important to know?
Should we care, does it matter? I would argue it does, increasingly so. Within the innovation capital lies the future of the organization and holds one of the real golden keys to the sustaining performance of the company, or not.
The generally accepted view is that Innovation boosts a company’s earnings, speeds growth, ensures an advantage over competitors, and greatly appeals to shareholders. Put another way, businesses that deliver earnings growth based on a continuous stream of new products and services and new ways of doing business capture the innovation premium.
So tell me, why are we seemingly so bad at identifying what actually makes up our innovation capital, apart from some sweeping generalized statements attached in the accompanying comments within the financial result statements?
We need to find a way to unlock this as we are constantly being pushed for new business models that create, deliver and capture value. It is in the entire make up, the value structure around the offering, and this is made up of distinct capitals that drive the new business towards success.
Do you really want to discover what makes up your innovation capital? Then why not talk to me and begin a journey that builds a far better sustaining future where growth and value creation become far more realizable.