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Is Innovation a form of Business Acumen?

The history of science is littered with the carcasses of things we found out in unexpected places. Such as Sir Alexander Fleming finding penicillin in a “failed” experimental dish consisting of mold that was thought to be an accident and of no use.

Currently you might have heard of another example in the medical field; so-called cures for Alzheimer’s based on killing plaque in the brain have been failing, but a radical new approach is starting to see Alzheimer’s as another form of diabetes. In fact, in some medical quarters, Alzheimer’s is now being called Type 3 diabetes. This has spawned a whole new approach to a possible cure. Who knew?

 Innovation has been a really hot topic for some time now. Everyone wants it but no-one can yet dial it in, despite almost every company trying. It still happens mainly by chance, often against the will of the companies from whom it derives. But what if innovation was just another form of business acumen? What if, instead of business acumen just being something that flinty-eyed billionaires possess, it was actually another form of innovation? If we could measure business acumen, we would then have another way of identifying innovators and another completely different way of accelerating innovation.

That insight is coming from behavioral finance and from our own research into business acumen. Seems like one of our cognitive biases, the status quo bias, is something we can use to track the amount of value added by a person in developing innovative products and services. And you can measure it psychometrically! No, it’s not creativity either, it’s something completely different.

In our work we measure the status quo bias to psychometrically evaluate it and to compare it with the level of resources a person characteristically uses to achieve a given goal. In this form, business acumen is actually your level of value-adding minus your level of resource utilization. We use it in our programs for both business acumen and innovation training and acceleration. Voila, innovation is a form of business acumen.

Who knew?

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