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Overthepastdecade,therehasbeenacontinuousandvoluminousglobaloutpouringofgovernmentconcerns,mediareports,corporatecomments,andbusinessschoolwritingandresearchonthecriticalneedformore“innovation”ateverylevelofcorporateandgovernmentmanagement.Inadequatefundingandthelackofacommitmentbycorporationsandgovernmentsto“innovation”havebeencitedasmajorcausesofdifferentcountries’“non-competiveness”ontheglobalstage.Thesubliminalpremiseandpresumptionbehindmuchofthewritingisthat“innovation”isalwaysneeded,alwaysuseful,alwayspositive,andalwaysagoodallocationofscarcecashandhumanresources.Formanypeople,ithasliterallycometobeseenasitsownobjective;

doingmore“innovation”ofallkindsandcommittingmoreandmorecashandhumanresourcesarealwaysproductiveandalwayseffectiveusesofthesescarceresources.

Thispaperwillarguethatmuchofthecurrentwriting,research,conceptualization,and 

perspectivesoninnovationareshroudedinaseriesofdysfunctional,hopelesslycomplex, 

irrelevant,non-measurableacademictheories,myths,ambiguities,half-truths,andfuzzythinkingthatdefeatinnovation’susefulnesstoreal-worldprofessionalmanagers.Thesearethemanagerswhohavetodecidewhichspecifictechnologicalandotherinnovationstodevelop,adopt,bundleandintegrateintotheircompetitivemarketstrategies,andtowhichonestheyshouldcommitrealcashandhumanresources.

Thispaperwillalsoarguethattheprimalobjectiveofinnovationmustbetocreateandgrowrealwealth,whichisthelong-term,netcashflowsofcompaniesthatdevelop,applyandbundletechnologicalandotherinnovationswiththeproductsandservicestheytaketocompetitiveglobalmarkets.Itiscriticaltoputthishardcashflowmetricofsuccesson“innovation”,andtoconceptualizeitasatoughsetofspecific,well-definedstrategicchoicesforprofessionalmanagers.Itisalsocriticalthatwestopconsideringinnovationas 

auniversallydesirablehumantraitof“leadership”,orasetofcorporateandmanagementactivities,oraculturaldimensionofpeopleandorganizations.

Withoutthishardcashflowmetric,“innovation”andmuchofthewritingandresearchonitdegeneratesintoavague,mythicalandlargelyuselessorganizationalcliché

likemanyothers,including“leadership”,”sustainabledevelopment”,“environmentallyfriendly”,“sociallyresponsible”,“socialcapital”andahostofsimilarlyfuzzyhomilieswithlittleornostrategicormanagerialsubstanceinreality,nosharedconceptorconnotation,andnometricstodeterminetheirutilityandvalue.

Thispaperwillalsoarguethatthereisnoshortageoftechnologicalorother“innovations”inmostcompanies;

noranyshortageofnewideasfornewtechnologies,products,services,orprocessesforcreatinganddeliveringthem.Thereis,however,adesperateshortageofsuccessfulinnovations,namelythosethatcancreateandgrowwealth.Manyexamplescanbecitedof“innovations”thatwereexcitingbutthatalsowounduplosinghugeamountsofcash.Thispaperwillarguethatthemajorproblemwithinnovationisnotinsufficientcashflowintoinnovation;

itisinsufficientcashflowout!

Corporationsandgovernmentsfundtoomanylosers!

Businessschoolsbearauniqueandspecialresponsibilityfortheseinnovationscenarios.Theyaretheorganizationsthatareatthecoreofthedevelopment,teaching,writingandresearchonprofessionalmanagement,inbothbusinessandgovernment.Giventhestaggeringamountsofcashthatwillbespentbycorporationsandgovernmentsinthefutureontechnologicalandotherinnovations,theroleofprofessionalmanagementbecomesparamount.

Thecriticalcoreandessenceofprofessionalmanagementisthecomplexorganizationalrealitiesfacingmanagersmakingthedifficultstrategicchoicesforscarcecashandhumanresourcesincompanies.Innovationrepresentsoneofthemostcomplexanddifficultmanagementprocessesforstrategicchoice.Itistheclearresponsibilityofbusinessschoolresearchtocreatenewconceptsandtoolstohelpmanagersintheprocessesofmakingthesechoicesinspecificreal-worldinnovationsituations.

Innovation:

Themanagementchallenge

Nomatterwhatyourvieworperspectiveisonthemeaningof“innovation,”includingtechnologicalinnovation,thereislittledoubtthatoverthenextfiftyyears,ifyoumeasuretherelativeimportanceofthecorporateandgovernmentcashandhumanresourcesthatwillbecommittedtodifferentstrategicdecisionsglobally,innovation,especiallytechnological,willbebyfarthelargestexpenditure.Itwillalsothemostcriticalstrategiccompetitivefactoringlobalbusiness.

Overthepastdecade,therehasbeenacontinuousoutpouringofgovernmentconcerns,mediareports,corporatecomments,andbusinessschoolwritingandresearchonthecriticalneedsforinnovationateverylevelofcorporateandgovernmentmanagement.Thecrythat“ourcountrydoesn’tdoenoughinnovationtocompeteglobally”isbecomingafamiliarmantrainCanadaandmanyothercountries.“Wehavetospendmoreoninnovation”.Inmanycountries,aplethoraofnewgovernmentprogramsareconstantlycomingupandmutating,oftenconfusing,conflicting,andhopelesslyadministrativelycomplexandinefficient.Entireofficebuildingsarefilledwithgovernmentbureaucratsrunningtheseprograms.

Atthispoint,thereisyetanotherwaveofCanadianfederalgovernmentconcernandmassiveadditionalfundingformore“innovation”.ArecentarticleinMacLean’smagazineillustratesthis.

（1）.”Nuclearindustrygetsbigboost.”Thearticlegoesontosaythatthethronespeechspecificallypromisedtobolsterscienceandtechnologyspendinginorderto“fueltheingenuityofCanada’sbestandbrightestandbringinnovativeproductstomarket.”

Anumberofquotesfromtheongoingwaveofconcernaboutinnovationareworthnoting;

∙“Innovationistheroutetoeconomicgrowth.Innovationisthecreationandtransformationofnewknowledgeintonewproducts,processesorservicesthatmeetmarketneeds.Assuch,innovationcreatesnewbusinessesandisthefundamentalsourceofgrowthinbusinessandindustry“

（2）

∙“AreportfromtheOECDsaysthatinfutureGermanyshoulddevelopmoreinnovationinit’sdomesticmarket”（3）

∙“Canadaispoorincreatinginnovation,andotherOECDcountriesoutperformus;

werank14th 

amongOECDcountries.RandDfinancingbytheCanadianprivatesectorremainsconsiderablybelowtheOECDaverage.Intermsof 

businessinvesting,Canadaranks15th.”（4）

∙“TheScience,Technology,andInnovationCouncilstateoftheunionreportconfirmsCanada’sunderperformanceininnovation.DataindicatesthatournationsuffersfromlowbusinessRandD”（5）

∙“It’sbeginningtolooklikebadnewsfortheinnovativeedgetheUnitedStateshaslongenjoyed.From1995through2001,China,SouthKorea,andTaiwanincreasedgrossR&

Dspendingbyabout140percent,whiletheU.S.increaseditsinvestmentbyonly34percent”（6）

Fromthesenotes,andmanymore,itisclearthatinnovationisseenasplayingacentralandleadingroleineconomicsuccessinmanycountries.Itisalsoclearthatthefundingandeffectivenessofinnovationisawidely-sharedtopicofdeepandmajorconcerninmostifnotallcountries.

Whatisequallyclearisthat,intoomanyofthesesituations,theconceptualmeaningof“whatinnovationis”and“whatsuccessmeans”isshroudedincompleteambiguityandconfusion,andseendifferentlybyalmosteveryoneyouask.Untilthesequestionsareclarified,billionsuponbillionsofdollarswillbeinvestedgloballybycompaniesandgovernments,frequentlywithnoimpact,orworse,resultinhugeanduntrackedcashlosses.

Themanagementrealities

Itmaybeapainfulrealitybutthefactisthatrealinnovationcanonlybecreatedbymanagersincompaniescompetinginglobalproduct,services,andprocessesmarketplaces.Inviewingthemanagementofinnovationinthesecompanies,itiscriticaltogetclosetotherealworldcompetitiverealitiesfacingtheseprofessionalmanagers.

Itisimportanttounderstandthetoughrealitiestheyfaceandthecompetitiveandstrategiccontextforspecificinnovationdecisions. 

Toooftenthesedecisionsarelookedatinisolation,asthoughtheycanbeanalyzed,interpretedanddecidedoutsidethecontextofthecomplexcompetitiveglobalsituationthemanagersandthecompanyarefacing. 

Someofthemajorfactorscharacterizingandinfluencingthisparticularmanagementrealityarethefollowing;

∙Individualproductandservicesinnovationsseldomaddanyvalueinisolation;

theymustbeintegratedandphysically“bundled”withawiderangeofotherphysicalandprocesstechnologiestobeapplied.Thispresentsgreatpotentialrisk,sinceaparticularinnovationcanappeartocreatecompetitivevaluebyitself,butmaynotbecompatiblewiththephysicalandprocessinfrastructureinwhichitmustbeembedded.Asanexample,Intelmaycomeupwithacomputermicroprocessorinnovation,butitmaybetoofastfortheotherc