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Skip to 0 minutes and 5 secondsDOUGLAS MACBETH: Innovation: Innovation is defined in the Merriam Webster dictionary as a new idea, device or method, and also, the act or process of introducing new ideas, devices or methods. Edison described invention as 1% inspiration and 99% perspiration, which emphasises the trial and error nature of many invention paths. While perhaps the best description of the inventive or innovative mind was captured by George Bernard Shaw, who said "you see things and you say, why? But I dream things and I say, why not?"

Skip to 0 minutes and 49 secondsIdeas can come from customers asking for things that they cannot currently find anywhere or by some inventor seeing or dreaming about a possible product or service based on their knowledge of what is technically feasible, even if not yet realised in a final product. These technology push ideas can often change whole industries and societies. But if we had asked the customers, they would have had no basis of experience that would have permitted them to describe that solution. However, invention is not enough. The idea has to be developed into some commercial artefact for innovation to be real. Lots of people can think of creative and new ideas, but turning that dream into a reality is the mark of the true innovator.

Skip to 1 minute and 42 secondsTo have a robust dream of a possible future, teams of often disparate people seem to be important. If these people are ready to challenge existing assumptions, ready to explore and evaluate options carefully and build a support network to proceed towards the final conclusion, then much can be achieved.

Skip to 2 minutes and 3 secondsPeople aspects: So we want people with varied experience who are comfortable working in an atmosphere of uncertainty, enjoy breaking through or avoiding roadblocks in the way of progress. Such people reward success and do not punish failure, but rather see it as part of the learning process. However, writers such as Robert Wigger argue that the perspiration bit is overplayed, since there is evidence that clever people can sometimes take leaps in their invention thinking based on their understanding, rather than laboriously trying and testing every single option. Please note that innovation is every bit as important in service delivery as it is in new product design, and perhaps more so, since less effort has historically been devoted to such activities.

Skip to 2 minutes and 56 secondsInnovation in contracts: Often, we are faced with the situation that the customer does not really know what they want and can sometimes stop the needs definition stage too soon so that this frozen specification is the one that is then used to select suppliers and award contracts. A frozen specification also misses out on any innovation possibilities through the contract life, so that there is a missed opportunity because of this lack of vision and the rigid contract. Good contracts build in our recognition that new requirements can evolve, and they therefore include a provision for redefinition inside an existing contract, where possible, or define a process to allow for a renegotiation.

Skip to 3 minutes and 41 secondsHowever, the public sector, controlled by EU procurement rules, a major change is enough to trigger the requirement to start a new procurement process, since the new requirement specification might allow other bidders to enter the competition.

Skip to 3 minutes and 57 secondsMeasurement and rewards: All of the product and service level agreements need to be subject to processes of measurement and review, and that includes any stated targets for innovation. Here again, agreement is needed about who measures whom and what, and how frequently they do it. However, data is useless unless it informs actions. So we need to agree on the processes of review, the ways in which decisions are evaluated and implemented, and if there were agreed incentives in the contract, how these are verified and rewarded. All such measurement should recognise that there are at least two parties in this contract and each has to fulfil their contractual promises.

What is innovation?

What is innovation? What attitudes, behaviours & processes can help?

In this video, Douglas introduces you to different definitions of innovation and guides you through the different factors which can both foster and hinder innovation in contract design and delivery.


A copy of the mind map used in this video is available to download in PDF format from a link at the bottom of this page.


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This video is from the free online course:

Contract Management: Building Relationships in Business

University of Southampton

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