What rules or protective boundaries are necessary to let true innovation flourish?

What excites me most about the Inventioni.st model is how it lowers the barriers to (and risk of) experimentation. As Bud Caddell writes on his blog, two of the reasons why this, why now: A) In most institutions, 90% of strategic plans are never realized and 70% of change plans fail. and B) Organizations need innovation more than ever, but innovation needs breathing room.

True innovation needs frequent iteration and room to fail.

Is there a better way than this to create successful innovation? And can the Inventioni.st model create something as lasting as Nike+ or will it always be limited to the scale of the Dominos Pizza Tracker?

I'd hate to call Domino's Pizza Tracker limited in scale; it's part of a much larger technology solution that allows users to order via their mobile. And an importantly, it's a sexy part of that solution, considering they're a franchise organization and need to sell expensive, heavy tech to thousands of locations to make mobile ordering work.

The point here: you need to be able to demonstrate the effectiveness of small and cheap pieces of a broader strategy to allow a plan to make it all the way to "full" realization.

I always wonder about the relative value of exploring innovation on behalf of large entities. They are functionally challenged in their ability to innovate (naturally protective with scale), and yet they have to ability to rapidly deploy something that is working. The question is: If you truly know how to innovate and win (which is a BIG if), can you make more money and create more impact launching your own product (i.e. Square), or developing them for clients (incubating something for Citibank)?

The question we at Third Wave are also constantly thinking about is how much are you are able to instigate long-term change/innovation from the outside. I think a huge part of the 90% of unrealized strategic plans come from outside consultants creating something without complete knowledge of the complexity inside. What Dan Hill calls the “dark matter”:

“You can’t design a transformative service without redesigning the organisation, and this could only realistically be done from within an organisation. If you asked the organisation to somehow produce a map of the architecture of the problem, as above, it simply couldn’t. You can only feel that from within it, by observing its effects on things, as dark matter.”

readmill.com

The launch of gov.uk seems somehow related: thenextweb.com

I think, it is fair to say that outside consulting can plant a seed that will eventually lead to innovation. For that to happen, the client needs to either want change or at least be open to the idea of change. Products like Domino Pizza Tracker might not be as all transforming to Domino as Nike+ is to Nike itself, but in the long run it might be able to change the mindset and make it possible for Domino to change.

We should take into account that there is no real precedent for a company to "just change". It's a process, often enough one that is mostly invisible to people who are not involved into it. The number of people involved – be that from the inside or the outside – is always enormous.

Couple comments related to the thread.

Aaron, we don't want to build our own products. Mainly because to shift from a service business to a product business is no easy feat. We don't have the infrastructure or the staff to make that work. At least not today.

On changing a large organization's course, it would be naive to think we could do that with a single idea. We talk about nudging the organization, launching an experiment that will, in my own metaphor, stretch just outside the amoeba of the organization. If it finds success, the rest of the organization might take notice. Companies are driven by profits.

Will it work? We'll see. I obviously bet it will, but only time and sheer determination will tell.

Bud, I totally agree that switching from service to product is difficult, unless perhaps you're already building for a living (37signals). What I was trying to triangulate is this: if that's hard, then how hard must it be to coach someone else to do it, and at scale no less? Of course, both our firms do this, so I'm merely pointing out that we might be chasing at windmills. Fortunately, we're both optimists.