Welcome to the segment, Cross Industry Innovation. In this segment, I'll talk about how transing is related to cross industry innovation. I'll talk about how academics think about cross industry innovation. I'll explain what CCCI the acronym means, and lastly, we'll talk about how a company or a person can proceed in terms of innovating across industries. So, let's get started. Okay fundamentally, I think cross industry innovation is highly interrelated to transing and it's because transing is about how we try to find similarities between different domains and try to link them. And I also argue that transing requires flexible fit and that is because we're trying to mix and match what's very familiar, what I call the fit part with something that is much more new and that is what flexible refers to. And a lot about cross industry innovation is like that as well. So an example of transing was that of yours truly. So my name is Dae Ryun Chang, and so this is what I talked about in a different segment, how in my vision to broaden my reach of my various messages, I'm doing what's very familiar to me and that is being an academic and that would be the fit part. But I'm also experimenting with newer audiences, general audiences, non-academic audiences and my aligned VSA is that I need new ways, new actions to do that, especially film. And so the film part is something that teaches me how to reach this new audience, but film is something that I can transfer back to pollinate how I reach my business audience as well because even in business, you need film. You need case studies of course, but case studies can be done through film. So I'm learning a lot. I'm innovating in terms of how I teach through my experiences in what seemed to be this very different kind of endeavor. So I am seeing from this very transcendental level, the similarities between these at first very different industries Okay so what is cross industry innovation? It's the new insight, the new value that we gain when we do something different whether it's in a different domain, different technology, or with different people. And this is what is known as cognitive distance, and we can do it in an outside-in sort of way which leads to higher, in some cases disruptive, innovativeness. This is something that Clayton Christensen talks quite a lot about or it could even be done internally such as across functionally within a company. It doesn't lead to as radical innovations as in the out-side-in approach but nonetheless, it's much more scalable. But the big caveat as we can see here in this diagram, is that cognitive distance does not just lead to positive results. From the novelty standpoint as we can see, that goes up because it's new, but from the absorptive capacity standpoint, it refers to how much we are able to digest and understand new things. Of course, that is inversely related. So as we can see, as for the optimal cognitive distance, here noted as Point X, it's somewhere in the middle. It's a combination of the novelty increase but also a combination of the negativity that occurs because of our inability to understand new things and that could be maybe industry specific, it could be country specific, it could even be person specific. Okay, this is what CCCI Matrix refers to. This will be a very common sight throughout this course and it talks about how we at the starting point A1, a company or industry that starts at A in Country 1, thinks about how to innovate. And as you can see here, there are many different paths. They can go cross country, and cross country here means cross border, we're not talking about skiing, so don't misunderstand cross country as relating to skiing. But more to the point for this segment, we're talking about cross industry where you start from Industry A and then go to Industry B. So you can source from other industries and sourcing from really divergent industries again increases the divergent kind of thinking that a company or a person may need. And it can lead to, at a transing level, if we see these analogies occurring, inter industry scalability or what is otherwise known as economies of scope which can be contrasted to economies of scale. So we're still searching for similarities at some level. And of course it can be done in a global context so that other industry that we're benchmarking that doesn't necessarily have to be domestic, it can be some industry abroad. And in this diagram, we see how analog industries and digital industries if combined well, can lead to this very hybrid new kind of business model. And I think that is what essentially Airbnb has done, that is what Uber has done, and they become chameleon like even though analog is something that is very familiar and very old and maybe hard to innovate. By just adding a couple of more digital based ingredients such as what Airbnb has done and what Uber's done, you become this new, seemingly, business model and you attain the benefits of both, both the easy to convey, real aspect of analog, the fact that it's very personal, that it's easy to understand, but also the beauty of things that we normally attribute to digital business, that it's cheaper, that it's faster, it's more transparent, that you have this community and stemming from that, that you trust people as opposed to trusting companies less. And finally in terms of how we innovate, there's a good source, Gassman and Zeschsky and so I highly recommend that you refer to this article. And I've highlighted some of the key aspects and so we start from the space line called Strategic Intent and the keyword here I think is having an open mind, but then we have to abstract in terms of try to understand what the problem is and trying to relate that to other problems that other industries have suffered and that's at that surface level. So at that surface level, at that abstract level, we can find easily analogies, but what's harder is how to solve these problems, and that is what the structure here refers to. So even though technologies may be very different, again, if we look hard enough and in a very resourceful way, we begin to see how a very different, very divergent technology may still have relevance and have meaning to solving our problems. And as we saw, we also have to build understanding especially given that the absorptive capacity of people to understand may be very limited. And lastly, the adaptation in the way is like ‘Noon Nopi’. So really adapting it to our industry may require a lot of effort, and especially spreading that to the whole organization, that requires even a greater effort. Okay so summing up, we learned here in the cross industry innovation that if intra industry growth is limited, we should look outside. Even if we're still looking inside, we should look across maybe different products that we have, different personnel or different function that we have, but the same old, same old will not help. We also learned that transing is highly related to cross industry innovation in terms of the even mixing and matching what I call the 2F, the flexible fit paradigm. We also learned that analog and digital is a form of cross industry innovation. And lastly, we learned that in terms of how to implement cross industry innovation, that it's not just marketing, that there's a lot of organizationalimplications involved as well.
