The Progress Economy

What we’re thinking

Seeing the world through a progress-first lens reveals a suite of practical innovation levers.

Now we can address our innovation problem – where 94% of executives are not happy with innovation initiatives – through identifying numerous levers we can apply to deliver what progress seekers truly want: better progress.

Be gone chasing ill-defined ”added value”, farewell innovation theatre – hello creating and executing new – to the individual, firm, market, industry, world – progress proposition(s), that are some combination of:

• improving how to make existing progress
• increasing progress potential (getting closer to a seeker’s individual progress sought and starting from their individual progress origin)
• showing additional potential progress sought
• reducing one or more of six progress hurdles to making progress
• increasing amounts and/or frequency of seeker’s recognising emerged value

Editing below here

What’s the problem? Disappointing innovation

Like value, innovation seems easy to define at first glance. But just like value, that simplicity is deceptive. Too often, organisations engage in what Steve Blank calls innovation theater—a flurry of activities that create the appearance of innovating but result in little real traction.

How many hackathons, ideation competitions, or brainstorming sessions have you participated in that generated ideas – yet led to few (if any) tangible products or new approaches?

McKinsey notes that only 6% of executives are satisfied with their innovation initiatives. I like to look at that the way around: a staggering 94% are dissatisfied.

Why?

Because we focus on the wrong endgame (creating or adding value), use the wrong model (value-in-exchange), and judge success through the wrong lens (the manufacturer’s or provider’s perspective rather than the seeker’s). Many other challenges exist, but they ultimately stem from these three fundamental flaws.

Here’s the solution – think progress-first

The progress economy’s laser focus on progress – moving over time to a more desirable state – is the answer.

Everyone is trying to make progress in everything in their lives, and they do so by integrating resources: their time, skills, knowledge, objects they find around them, and tools acquired from other attempts.

Who innovates, and when?

A progress seeker who lacks resource encounters a progress hurdle – we call this foundational hurdle the lack of resource progress hurdle. But hurdles are not barriers. Seekers may look to find creative ways to move forward. For example:

• creating new resources
• borrowing resources from progress attempts in other domains
• integrating existing resources in novel ways
• modifying or redesigning progress-making activities

In other words, these seekers innovate.

If they achieve progress in a better way than before, or achieve better progress (ie getting closer to their progress sought), they have an advantage. That advantage can then be offered to help other seekers progress. These seekers are incentivised to offer this help as they are usually seeking help themselves in sone other progress they wish to make. We call such seekers, progress helpers.

This exchange of help is frequently hidden behind indirect exchange, such as transitive exchange. We use service credits to mediate such exchange; and money has been a successful implementation.

If we accept this view, then innovation is simply the process of improving progress. By understanding how progress is made, we can identify the levers that drive innovation. whether pursued by seekers themselves or by existing progress helpers aiming to increase their relevance and adoption.

Let’s now explore these levers…

Editing below here

Innovation Levers

Ways of structuring more systematic and successful innovation. All are focussed on the above definition of innovation.

Be aware that they can be interlinked, particularly with the progress hurdles – offering better progress can increase progress hurdles; reducing hurdles can impact progress (though this is not necessarily a bad thing).

What is ideal situation? A seeker can get from their individual progress origin to their individual progress sought with minimal progress hurdles. An ideal proposition is one that helps them do that, as well as challenging if their progress sought is enough.

Lever 1: Improving how to reach today’s progress potential/progress offered

Innovation can focus on improving the current progress that is possible.

In the eyes of the progress seeker this is the current progress potential they believe could make on their own or with a particular progress proposition.

For progress helpers, this is the progress potential they believe their current proposition help reach. This is more commonly known as progress offered.

Here’s some ways we could achieve this:

• improving existing resources
• updating progress-making activities

Somme ending text

Lever 2: Improving progress potential towards individual seeker’s progress sought

There is also the reverse…reducing progress offered

Lever 3: Getting proposition’s progress origin closer to individual seeker’s progress origin

Lever 4: Addressing individual seeker’s the ever-evolving progress sought

Lever 5: Addressing individual seeker’s the ever-evolving progress origin

Lever 6: Segmenting based on progress

Lever 7-12: Reducing progress hurdles

Lack of resource

Adoptability

Resistance

Lack of confidence

Continuum misalignment

Inequitable exchange

Lever 13: Accelerating individual seeker’s value recognition timelines

Lever 14: Altering the progress resource mix

Additionally, altering the service mix leads to the concept behind many of today’s innovative moves. Including:

• servitisation typically replaces goods in the mix with physical resources as well as adding systems
• digitisation typically lowers employees whilst increases system elements in the mix
• artificial intelligence and machine learning are “simply” systems encapsulating knowledge/skills that a seeker can integrate with
• digital twins requires adding systems to the mix and often employees to interpret the twin’s info for the seeker
• shifting online reduces physical resources (buildings etc) and increases systems in the mix

Lever 15: Altering the progress making activities

Lever 16: combining progress propositions (even from other Helpers)

Lever 17: Shifting along the progress continuum

Lever 17: Challenge if progress sought is enough

How, then, does the progress economy’s definition develop? Let’s follow along …

Innovation is creating and executing a progress proposition…

We start the progress economy’s definition clearly stating its about creating and executing a progress proposition. Immediately we are signalling this is more than just ideating.

And we’re creating and implementing a progress proposition. Which you’ll recall has the following definition.

So that means we are consistent with the progress economy view of value. That it can only be offered. We, as progress helpers, can not determine value and swap it in an exchange moment. It’s a common problem in innovation, the innovator feeling they determine value. Just watch your favourite episode of Dragon’s Den (or Shark Tank, or whatever it might be called in your location).

And it is here we get a next glimpse of an innovation zone. We can innovate the:

1. progress being offered
2. activities involved in the process of making progress
3. service mix offered (for example swap employees out for a system)
4. individual elements of the service mix (for example upgrade a system)

A little less directly obvious is that we can innovate our helper ecosystem (or start one if the helper is a single entity). Or we can slide ourselves along the service-service continuum. Which in turn will likely require us to adjust our service mix and series of activities.

Additionally, altering the service mix leads to the concept behind many of today’s innovative moves. Including:

• servitisation typically replaces goods in the mix with physical resources as well as adding systems
• digitisation typically lowers employees whilst increases system elements in the mix
• artificial intelligence and machine learning are “simply” systems encapsulating knowledge/skills that a seeker can integrate with
• digital twins requires adding systems to the mix and often employees to interpret the twin’s info for the seeker
• shifting online reduces physical resources (buildings etc) and increases systems in the mix

Let’s address what we mean by the word “new” in our definitions first sentence.

…that is new (but new to who?)

It’s easy to believe that a progress proposition is only innovative if it has never been seen before. But that’s too restrictive.

In the ISO definition of innovation they note that ”novelty is relative to, and determined by the perception of the organisations and interested parties”. However, I prefer the definition of Edison, bin Ali and Torkar’s (2013) in “Towards Innovation in the Software Industry”. They list four categories. An innovation can be new to the:

• firm (although let’s be more generic and say organisation)
• market
• industry
• world

I like this definition as it guides us to sources of innovation inspiration. What are other organisations, markets and industries doing that could be reused, to varying degrees, in yours? We can use den Hertog’s phrase of carrying innovation for this case (from “Knowledge-Intensive Business Services As Co-Producers Of Innovation“).

Benefits of carrying could include reusing skills and competence seekers have gained elsewhere. And progress seekers are an increasing driver here. More so they expect to do in your industry/market things they already can in others they interact with. QR codes are a good example of both situations. Being carried in the early days. And now being expected when seekers need to, for example, show a ticket of any kind.

New to the world innovations are as the phrase says, not been seen before.

…that offers to help make better progress

Let’s remind ourselves of the driver behind innovation. As Drucker says:

because the purpose of a business is to create a customer, the business enterprise has two – and only two – basic functions: marketing and innovation

p. drucker

Marketing is the function that helps us identify the progress sought by seekers. And the outcome of innovation is the progress offered, reflecting that marketing intelligence. We can nearly always help the seeker make better progress. Through new tools, technology, processes etc. And seekers’ progress sought continues to evolve. As they interact and progress through the world they experience new things, both in your market/industry and in others, and in their own circumstsnces. These all alter their needs and views.

Whether we help them make better functional and/or non-functional progress. Or we find a way to help them better in their context. This is how we help them make better progress. And better can be baselined against our current offering(s) or competitors.

It turns out there are four usable interpretations of better. We can offer to help the seeker make:

• Improving offer: more progress in the elements of known progress sought – we will find that we may not initially be able to help make full progress
• Over offer: more elements of progress than the identified progress sought – they may not be aware of it (yet)
• Under offer: less progress in elements of progress sought (by current market) – disrupting
• any combination of the above – creating new markets

Which we can visualise in the following gallery.

Let’s take each in turn, in no particular order.

It’s probable that a helper’s current offer doesn’t offer to help with 100% of current progress sought. Perhaps it wasn’t possible to do so when the offer was created. Or, equally possible, the seeker has evolved their progress sought since the original offer was created.

This later can happen for various reasons. Seekers:

• learn when they are engaging with a proposition
• observe others using propositions
• are using other propositions in other markets and industries
• circumstances change

And the way to address this is to innovate to offer more of the progress being sought.

For example, the seeker could have ”quickly” as an element of non-functional progress sought. We could innovate to make our proposition quicker. They might have ”stay warm” as an element of functional progress. So we could innovate a way of staying warmer for longer. Or we might find a way that better fits the context of progress sought.

1. Identify the latest view of progress sought
2. Rank the elements in order of importance to progress seekers
3. Ideate to identify ways of improving progress offered
4. Rank ideas based on implementation complexity and budget for the specific progress helper
5. Select ideas to execute and execute

Another innovation approach is to result in over offering progress.

The intent being to address some progress sought that the seeker hasn’t identified themselves yet (or has but hasn’t put too great an emphasis on that).

Apple do this a lot with their hardware. In particular iPhones. Where they offer new functionality whose use becomes clearer once it is exploited.

Care needs to be taken that the over offer will be seen as helpful to seekers in the near future. Otherwise this may be seen as a hiring of hurdles that does not increase progress.

Under offering progress may, at first, seem a strange strategy to capture growth.

But it typically results in simpler (more adoptable) and more affordable offerings -lowering two of the hurdles to engagement. And this approach does go by a name you may be more familiar with – disruptive innovation. Which was coined by Christensen n his “The Innovator’s Dilemma”.

It – disruptive innovation – is though an often misused term. As the Christensen Institute clarify:

Disruptive Innovations are NOT breakthrough technologies that make good products better; rather they are innovations that make products and services more accessible and affordable

Christensen Institute

Where a disruptive innovation initially targets non customers or low end customers. And then relentlessly move upwards, displacing existing helpers (disrupting them).

• Identify common progress sought in today’s market
• which of those progress elements can be reduced so that either
  • the low end of the market still engage. That is, they still see an acceptable balance of potential progress and the hurdles of adoptability and service credits to engage?
  • current non customers now decide to engage. That is to say they now see the hurdles of adoptability and service credits are reduced enough and potential progress is acceptable?

It is possible to innovate and provide a combination of the above 3 approaches. That is to say increase some elements of existing progress offered, whilst reducing some other elements of progress offered as well as over offering some others.

An interesting interpretation of combining approaches is the strategy canvas and the four action framework tools of Blue Ocean Strategy.

BLUE OCEAN STRATEGY is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant

BlueOceanStrategy.com

Blue Ocean’s buyer value elements can be interpreted as the progress economy’s elements of progress. And these can be used on the y-axis of the strategy canvas.

The idea then is to decide to raise, reduce, eliminate or create progress offered. Snap, at least in 2017, compared to Facebook and Instagram decided to:

• raise (improved progress) the first 4 elements in the above diagram – remove performance need , for example
• eliminate (reduce progress offered to no progress offered) element 6 – view past content
• reduce (under offered) elements 7 and 11 – ease of UI (which may seem strange given the hurdle of adoptability, but this is a rare case where poor adoptability by parents was seen by teenage seekers as a positive)
• create (over offer compared to current market) element 10 – keep parents out; see above.

The resultant progress offered should create a new uncontested market.

…and/or that offers to help make progress better

A sub of making better progress is making progress better. Here we are focussed on non-functional and contextual elements. Leaving functional progress as it is. It can relate to non-functional progress that is implicitly expressed – faster, simpler etc. Or explicit, such as enhanced green credentials. Don’t forget, more adoptabile, cheaper are addressed as hurdles in the progress economy.

Another alternative is to offer the same progress….only better. Although this may be a masking of the above options. Or it addresses lowering the hurdles below. Or increases the survivability of the helper. But lets consider what it means. Let’s say we’re currently offering to help a seeker with some specific functional and non-functional they are seeking, in the context they are in. Ideally we’re offering to help them make the full progress they are seeking. But sometimes there are limits.

We still need to innovate in this situation, even if we are not intending to deliberately increase the amount of progress offered.

Competitors are trying to take our customers. And seekers are always involved in the start/continue phases of the engagement decision. So they could pick someone else to help them make progress.

We could, then, try and improve how we help the progress seeker make exactly the same progress as now.

…and/or that lowers the hurdles to engagement

Lower the hurdles to engaging. The hurdles are:

• lack of seeker resource
• adoptability of activities and service mix
• resistance to of activities and service mix
• misalignment on service-service continuum
• confidence in progress helper
• gaining required service credits

change market, eg google glass

…whilst maintaining, or improving, the survivability of the progress helper

Any innovation must secure that the progress helper survives. An innovation that destroys, or degrades (in the medium/long term) the helper is not a successful innovation.

Innovations can be internal to the helper. That is to say they are focussed on improving survivability without necessarily having an impact on the progress offered.

Relationship to types of innovation

Wrapping up