"Innovation" is Dead. Herald The Birth of "Transformation" as The Key Concept for 2009.

“Innovation” died in 2008, killed off by overuse, misuse, narrowness, incrementalism and failure to evolve. It was done in by CEOs, consultants, marketeers, advertisers and business journalists who degraded and devalued the idea by conflating it with change, technology, design, globalization, trendiness, and anything “new.” It was done it by an obsession with measurement, metrics and math and a demand for predictability in an unpredictable world. The concept was also done in, strangely enough, by a male-dominated economic leadership that rejected the extraordinary progress in “uncertainty planning and strategy” being done at key schools of design that could have given new life to “innovation. To them, “design” is something their wives do with curtains, not a methodology or philosophy to deal with life in constant beta—life in 2009.

In the end, “Innovation” proved to be weak as both a tactic and strategy in the face of economic and social turmoil. It couldn’t get us safely through the troubles of 08 (indeed, financial innovation was to large degree responsible for the economic trainwreck). Most importantly, “innovation” cannot guide us into an uncertain and tumultuous future. It is too narrow to generate radical alternative options and build risk-taking frontier skills needed to remake and restructure our lives, our economies and our countries.

We need a deeper, more robust concept. “Transformation” captures the key changes already underway and can help guide us into the future. It implies that our lives will increasingly be organized around digital platforms and networks that will replace edifices and big organizations (students already know this, university presidents still have edifice-complexes, which is why so many of them are getting the boot). Check out Jeff Jarvis’ new book, What Would Google Do, on platforms and networks.

Global networks of trusted relationships working within ecosystems/platforms (think iTunes/iPod/iPhone, Nike Plus, Facebook, Threadless, Zipcar) will make up our socio-economic and political worlds. It is already underway. The concept of “Transformation” takes these changes much further. It implies radical transformation of our systems—education, health-care, economic growth, transportation, defense, political representation. It puts the focus on people, designing networks and systems off their wants and needs. It relies on humanizing technology, not imposing technology on humans. It approaches uncertainties with a methodology that creates options for new situations and sorts through them for the best quickly.

Most importantly, “Transformation” accepts the notion that we are in a post-consumer society, defined by two groups of economic players: manufacturers and consumers. “Transformation” deals with a new Creativity Society, in which we are all both producers and consumers of value. Look around and you can see Gen Y in particular creating practically from birth, mashing music, designing Facebook or MySpace pages, doing videos and podcasts—creating value. Check out futurist Paul Saffo on the subject.

My good friend Frank Comes, ex-Business Week and now at McKinsey, puts it this way: In the past, economic value was generated by transaction. Increasingly, economic value is generated through interactions. The key is monetizing those interactions. That’s the heart of an economy built on social media.

“Transformation” takes the best of “design thinking” and “innovation” and integrates them into a strategic guide for the unknowable and uncertain years ahead.

As a concept, it needs more detail and texture. What do you think we should add to it? Does it work for you?

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