Combinatorial innovation isn’t just for startups, it's also for pitchbooks
Would you consider yourself a combinatorial innovator? No? Never heard the phrase before?
I first came across it from Hal Varian, Google’s chief economist. He explains it as “[there are] periods in history where there would be the availability of different component parts that innovators could combine or recombine to create new inventions.”
Self-driving cars are a great example of this. They combine the engineering invention of a combustion engine with the technology innovations of today such as GPS, lasers, infrared technology, and so on.
In fact, many of today’s advances use combinatorial innovation. In software, for example, all the components are bits that engineers can duplicate, combine, and distribute into new ways, explaining why, in theory, anyone with access to these parts could create the next hot startup.
Varian also explains that we’re currently in a unique innovation period where, due to the internet and the software, protocols, languages, and capabilities available, innovators are combining and recombining component parts to generate a huge burst of innovation. Just consider:
Cars + smartphones = Uber
Internet + restaurants = Seamless
Internet + spare rooms = Airbnb
Combinatorial innovation isn’t just the domain of startups. If you’re a good banker, you’re a combinatorial innovator, too. Maybe you’re not creating the next self-driving vehicle, but you’re constantly finding new ways to piece together parts for your clients.
Every time you are faced with a new client problem and your solution stems from digging through previous pitch books, reconfiguring the appropriate pages, and reassembling to provide a relevant, actionable answer that’s differentiated from previous work, you’ve applied combinatorial innovation and created something new.
Looks like it’s time to add “combinatorial innovation” to your LinkedIn skills…
A big difference between banks and Silicon Valley is that bankers are not able to use technology to provide the scale and efficiencies you need. Yet.
It’s relatively straightforward (although not as easy as it should be) to produce a new pitchbook using components of old ones. The issue is how to leverage them quickly for clients. Or put another way, figuring out the components of the pitchbook is the easy part, chasing them down updating them quickly is the challenge.
Knowledge management platforms have been put forward as possible solutions to this scalability issue. However, I think some critical elements are missing to move this from a theoretical discussion to a pragmatic solution.
I believe bankers are ready to take their combinatorial innovation skills to the next level, all that’s needed is the technology to keep up.
What are your thoughts on combinatorial innovation? How can technology make pitchbook production more efficient? Let me know, email me at firstname.lastname@example.org