The world of the progress economy comes from my personal experiences and the challenges I faced as, amongst other roles, a Chief Innovation Officer for a global account. I have had my fair share of successes and failures, depending on how I (or you) want to measure it.
For example, in just nine months, we managed to go from nothing to populating a newly established innovation pipeline with over 26 valid items. Igniting a sense of innovation within our teams through exciting competitions and engaging events. I even worked out a cool way to empower our cross-teams/countries innovation attempts by implementing an iterative approach over the Lean Canvas.
But, as thrilling as it all was…
…as a business leader, I couldn’t help but feel disappointed that our efforts didn’t move the needle in terms of tangible business impact. After all, true motivation for innovation should revolve around making a meaningful difference, right?
It dawned on me that we might have been caught up in what Steve Blank famously calls ‘innovation theater‘.
when our innovation activities deliver few/no tangible results, we are performing innovation theaterSteve Blank (2019) “Why Companies Do ‘Innovation Theater’ Instead of Actual Innovation”
To my dismay, I discovered that I wasn’t alone in my disappointment. McKinsey and others have revealed a widespread innovation problem. Astonishingly, “94% of executives are unhappy with innovation performance,” yet “84% see innovation as important to growth.” There’s a glaring gap of “54% of companies struggling to bridge the divide between innovation and business.” Even worse, “very few executives understand the problem or how to fix it”.
In light of this, I decided to set aside all the books I was reading (or had read), written by innovation gurus and enrolled in a self-funded MBA program at the fantastic Imperial College Business School. My aim was to broaden my knowledge and gain fresh insights into the business aspects that I might have been overlooking.
And it worked. I delved into the world of myopic marketing, examined the purpose of firms, and stumbled upon ideas that had been around for ages in strategy, change and organisational management, yet somehow remained untapped. It wasn’t until my final thesis reached its later stages that my supervisor serendipitously guided me toward the concept of service thinking. That was the missing piece of the puzzle that completed my mental circle.
Drawing from my MBA experiences and later stumbling down the fascinating world of service-dominant logic, I embarked on a further journey of dismantling economics to its core. And now I’m rebuilding it from a service-dominant logic perspective. Addressing all the open questions I still had. Such as:
- what does service really mean? and what’s the real relation to goods?
- what do value, value-in-use, and value co-creation really mean? what is the mechanism behind them?
- why do people do what they do? why do other people offer to help?
- if we exchange for service (and not money for embedded value), why is there so much money around?
The result is the birth of the progress economy.
I’ve had 4 pivotal realisations:
- progress rather than value is what we all seek, and value is a complex feeling that emerges from progress
- often we lack the resources needed to progress, but others have them
- these others often offer access to those resources to gain a service in exchange
- those resources are generally interchangeable skills and knowledge encapsulating entities
- we exchange service (without the “s”) – application of skills and knowledge for another actors benefit.
- this shifts the focus from outputs to how those are achieved
- service exchange needs to be equitable in size of effort; and since it is often indirect (transitive and/or wrapped in goods) and not simultaneous, it needs to be accounted for
- step forward the use of service credits…of which money can be seen as a successful implementation
When we liberate ourselves from the constraints of value-in-exchange thinking and the traditional goods-based economy, we enter a realm where value creation becomes intricate, multifaceted and tied to progress. This is value-through-progress, which can be interpreted as value-in-use when engaging help to progress.
It is within this view that we unearth profound insights into how the world truly operates. Along this journey, we encounter six hurdles that impede progress; the mechanisms/decisions behind progress; progress propositions; interchangeable resource mixes; enabling-relieving proposition continuums; and more. Each a moveable handle for innovation.
By understanding these intricacies, we can develop an actionable definition of innovation centered around improving seekers’ progress. Something beyond today’s common but vaguely useless “something new that creates value”. Instead we can say
innovation: creating and executing new – to the firm, market/industry or world – progress propositions that offer some combination of:
i) helping progress seeker to make current progress better
ii) helping progress seeker to make better progress
iii) lowering one or more of the six progress hurdles
whilst maintaining, or improving, the survivability of the progress helper (entity, ecosystem).
Gone are the days when we were trapped in the never-ending debate of goods versus services. Instead, we perceive a fluid landscape where six generally interchangeable resource types are offered to facilitate progress. Together with proposed series of progress making activities (instructions, recipes, process, contract terms etc).
Gone are the days of defining products and driving innovation by features. Instead we focus on progress sought – functional, non-functional and contextual. This opens up more effective segmentation strategies and the world of jobs to be done. And where progress offered from propositions can be tailored, mainstream, or challenge the mainstream (where we find blue ocean strategy and disruptive innovation sitting).
This newfound perspective liberates us from the confines of myopic thinking. We break free from the outdated, but undoubtedly previously successful, take-make-waste paradigm that has long plagued our economy. Instead, we embrace the shift towards a more sustainable circular economy, where resources are utilized intelligently and waste is minimised (if, and a big if, seekers are truly seeking this progress).
The progress economy is a work “in discovery”. So, please check back regularly to see the latest updates.