Where does innovation come from?

It’s a question leaders in both education and business ask themselves all the time. After all, everyone wants a small squeeze of that magic innovation sauce, in the hope it will propel their business, their revenue and their impact on students or customers to new heights in the future.

Too often though, we get the answer to the question inside out.

We think our innovation always needs to happen on the inside.

Finding the innovation X-factor

There’s no doubt innovation does happen inside organisations all the time.

Great companies can generate new thinking, exciting product and service developments and business model shifts, to evolve their offerings for customers, grow into new markets, and survive over the long term. They can do things differently, smarter, better. They can do innovation.

There are a few great examples. Boston Consulting Group’s 50 Most Innovative Companies 2020 found there was an elite group of innovative firms that have appeared on the list every year for 14 straight years. They were Alphabet, Amazon, Apple, HP, IBM, Microsoft, Samsung and Toyota.

But many organisations find they can’t persist with innovation over the long-term. An indicator of this is that, of the 162 companies that made BCG’s Top 50 list over the 14 years to 2020, nearly 30% appeared just once. A further 57% of those companies appeared three times or fewer.

Some organisations do innovation well. They have what BCG calls the five factors of innovation readiness: a clear ambition, a distilled idea of where they play in the market, great performance management, strong project management and a leading approach to talent and culture.

Others can’t sustain it - or are seduced by success. They often fall for what Clayton Christensen called the Innovator’s Dilemma; once you’ve achieved success as an incumbent, it’s hard to stay ahead of new competing technologies. You are captured by the status quo. You fall behind.

The truth is companies from both camps now realise they can’t do innovation alone.

They are looking to a new X-factor. They are becoming part of an ecosystem.

The energy of the ecosystem

BCG argued in 2019 that innovation in the world of business had become an ‘external game’. “Innovation today can come from anywhere—and more and more frequently, it comes from outside the company. In business life today, companies need to look beyond their own walls for new ideas.”

Leading companies had recognised this. At the time, the use of tech incubators among those who described themselves as strong innovators had risen from 59% in 2015 to 75% in 2018. They were also accelerating the creation of academic relationships (81%) and business partnerships (83%).

BCG was naming what the long-term tech players on its Most Innovative list already knew. Apple, Microsoft and Amazon were not trying to do everything themselves. They were focusing on what they did best and building around them ecosystems of external innovation to power growth.

McKinsey & Company says the corporate world is already entering a period it labels Ecosystem 2.0. Organisations are learning from their first round of mistakes to take ecosystems to the next level. And because technology is powering the creation of ecosystems, the world is going digital.

The lessons for EdTech

The education world is now awake to the ecosystem imperative.

An incredible amount of energy is being expended right across the education technology universe to identify and solve problems faced by educators managing the end-to-end student lifecycle. New ideas and innovation are constantly being generated out of the ether - and more of these will come.

In this environment, it’s much easier to invite them in than to try to replicate or beat them.

There’s other reasons the value of ecosystems is being realised in education. Firstly, not all providers are geared up to navigate digital transformation, with limited resources and talent in-house. Instead of trying to recruit to transform, educators can leverage external expertise like consultancies or vendors to help them solve the problems they face. Secondly, they like being able to keep up with the fast pace of change. Ecosystems offer educators speed in solving complex problems together with the painless maintainability of connected SaaS in the cloud.

An internal problem becomes external, with expertise and technology lined up to solve it.

Thirdly there is perhaps the biggest reason of all. When educators seek out technology partners that are biased towards an ecosystem approach, they are plugging themselves into a whole world of future opportunity rather than limiting their options. With innovation brought to them and enabled through curated system connections, they will have all the technology and tools they need to help them achieve their future ambitions.

By turning innovation inside-out we end up building a better future for educators and students.