Can Innovation save the US?

During the last couple of weeks, perhaps provoked by the year end, I've seen over a dozen of articles and columns arguing that innovation will save the US economy. While no one can argue against the critical role innovation plays in any economy, proclaiming that innovation will save the U.S. misses the point in so many ways.

First, it seems to ignore the fact that the rest of the world is also riding the innovation wave. Granted, United States enjoys many competitive advantages in the innovation arena but, to use a somewhat abused term, the world is flatter and the competitive landscape is leveling out.

Second, proclaiming innovation as the cure-all is delusional. Competitiveness and economic growth are wicked problems. By wicked, I mean ill-defined, multi-dimensional, non-linear, and complex. As tempting as it may be, proposing a single factor as the absolute solution ignores the multifaceted nature of the beast.

To top it all off, most of the pro-innovation arguments call for "top-down" heavy solutions - create a Federal Innovation Office, establish an Innovation Fund, pass an Innovation tax credit. They seem to ignore the "bottom-up" side of the equation. If innovation will play a protagonist role in ailing our economy, and it will, it won't be through an exclusive "top-down" approach.

I'm an innovation freak. My career has revolved - in many ways - around the innovation theme. To hear innovation proclaimed as the "true" or "only" source of competitive advantage is music to my ears. Unfortunately, the world is a lot more complex than that.

A final comment from a very different angle, our conceptual faculty gives us the capacity to abstract beyond the specifics of multiple instances and integrate perceptual entities into a single cognitive device - i.e., a concept. That's how we form words. The concept chair stands for all types of chairs; past, present, and future. We can repeat this process with the concepts chair, sofa, and table; and arrive at the concept furniture. Further cycles of abstraction will get us to things or stuff.

So, there's nothing wrong with our interest in naming the final cause of competitiveness, wealth, and economic growth. It’s in our nature – as conceptual beings – to do so. It’s just that innovation – as with quality in the 70’s – is too concrete an answer. If you’re really after the final cause of competitiveness, let me volunteer our ability to think. There you have it. What do you think?

We've lost an extraordinary bottom-up innovator

The best tribute we can pay is to heed his advice...

Borders' Demise

It took me some time to write this entry.  I've been carrying the picture on my iPhone for weeks.  It wasn't until today that I mustered the energy to upload it to my blog.

As you all know by now, Borders closed shop.  They went bankrupt.  The brick and mortar business model finally collapsed.  For some time, it seemed they could co-exist with their virtual counterparts.  There is, after all, something about the touch and feel of books that an electronic download can't provide.  Nevertheless, their business model became unsustainable.  You can search the blogsphere for the reasons of their demise.  For sure, a complex combination of factors - not one single cause - are the culprit.

What brings me to write about this unfortunate outcome is an earlier blog entry I wrote on October 1, 2009 (you can hyperlink to it on the Blog Archive at the right).  In it, I made reference to the emergence of Borders impromptu "chess club" as an example of an emerging strategy and an instance of bottom-up innovation.

Although that blog entry described but one specific instance of bottom-up innovation, I couldn't resist reflecting on the fact that, in the end, it didn't matter at all.  Of course, business success is not a one variable equation.  Interestingly, Borders held one of the highest ratings in customer experience.  Does Borders' demise mean that customers need not be treated appropriately?  Of course not.

So, rather than dump the whole bottom-up innovation thesis, Borders' bankruptcy should prompt us to fine tune the concept and, perhaps more importantly, the context in which the concept is valuable.  Toyota's leadership, for example, recently went through a similar reflection regarding their continuous improvement process.  Even an organizational system that generates between 20 and 30 ideas per year per employee with an implementation rate of 80% can not exclusively depend on bottom-up innovation to succeed.

Should we dismiss bottom-up innovation as a "nice-to-have" because of its vulnerability against force majeure or are our expectations misplaced when it comes to understanding the benefits of a bottom-up initiative?

Comments... ?

Democracy in Retreat

The Economist Intelligence Unit recently released their 2010 Democracy Index report. They titled it Democracy in Retreat. Let me quote from page 2 of the report:

“Disappointments abound across many of the world’s regions. Authoritarian trends have become even more entrenched in the Middle East and much of the former Soviet Union. Democratisation in Sub-Saharan Africa is grinding to a halt, and in some cases is being reversed. A political malaise in east-central Europe has led to disappointment and questioning of the strength of the region’s democratic transition. Media freedoms are being eroded across Latin America and populist forces with dubious democratic credentials have come to the fore in a few countries in the region. In the developed West, a precipitous decline in political participation, weaknesses in the functioning of government and security-related curbs on civil liberties are having a corrosive effect on some long-established democracies”.

History is an extraordinary long-standing experiment. Its most important lesson is the fountainhead of wealth and progress. A thorough review of the tides of civilization from the Dark Ages to the present point towards an irrefutable conclusion: freedom and knowledge. A mind that is free to explore, experiment, and learn, and that owns the product of its thinking drives wealth creation and progress. An enslaved mind doesn’t.

How does this relate to innovation, bottom-up or top-down? Be my guest; connect the dots.

The Conflicting Demands of Exploitation and Exploration

I recently finished reading Roger Martin’s latest book, The Design of Business (Harvard Business Press, 2009). Well, he also coauthored, with Mihnea Moldoveanu, Diaminds; Decoding the Mental Habits of Successful Thinkers, which I have on my desk, and I just noticed its copyright reads 2010; so I guess it isn’t his latest book.

In any event, if you haven’t read Roger Martin, I would highly recommend you do so. The Opposable Mind (Harvard Business School Press, 2007) would be my suggested starting point. I find he’s up there with Russell Ackoff and Ian Mitroff; thought leaders that keep you at the edge of your seat with their ideas.

In The Design of Business, Martin uses the concepts of exploitation and exploration to differentiate two different cognitive and behavioral frameworks. Exploitation relates to “milking” the current state of knowledge. It includes honing and refining current formulations; however, its primary concern is obtaining results within the current knowledge stage.

Exploration, on the other hand, relates to discovering new knowledge. Exploration is concerned with moving from the current knowledge stage to the next. While exploitation begets mastery, exploration feeds on originality.

I’ve been recently using this conceptual framework to understand and explain various phenomena. For example, I’ve just authored an article on Lean Manufacturing that uses this framework to help explain why many Lean implementations fail; and I am currently helping a distributor in the food and beverage industry (with strong exploitation processes), strengthen its weak exploration capability.

So, how do the concepts of exploitation and exploration relate to bottom-up innovation? Because of their execution related responsibilities, most bottom-up innovators find it difficult to escape the shackles of their day-to-day exploitation-related tasks to find time and resources for exploration.

The bureaucratic answer to the exploitation-exploration dilemma is to assign departments to each endeavor. There are those whose job is to invent the future while there are those whose job is to get the product out the door or service the customer coming in. The problem with this approach is that it relegates innovation to a small group and delimits it to the development of new product or service offerings.

The bureaucratic answer helps neither you nor your organization. Innovation is critical for improvement to flourish in all organizational dimensions: not only products and services, but also processes and methods, and business models and strategy. Without exploration, innovation is impossible. Also, in an exploration depleted environment, personal and professional growth come to a standstill.

For those of you trapped in bureaucracies, making incursions into exploration may be difficult. Sometime a delicate mix of lots of ingenuity with a dash of disobedience is required to break the bureaucratic spell. Some of the most daring bottom-up innovators I’ve met manage to use every single opportunity to advance their innovation agenda. Some of their tactics include:

1. Opening their eyes and ears to what’s happening around them. Many new ideas originated by noticing inconveniences and obstacles or by just watching people behave in their “natural habitat.”
2. Reading at least 30 minutes a day. Many bottom-up innovators find reading encouraging, refreshing, and liberating. They read on a diversity of topics. It stimulates their mind and helps lubricate their exploration skills.
3. Making a point to learn from their colleagues. They use every opportunity to expand their field of vision.
4. Volunteering for projects. They seek exposure to other areas they would normally not be exposed to.

Do you have any tactics you’d like to share? Click on comment below and share your ideas.

If you want to think big, start small.

That's the title of chapter 38 from Alan M. Webber's (Co-founder of Fast Company Magazine) RULES OF THUMB; 52 Truths for Winning at Business Without Losing Yourself. In it, Alan succinctly presents the now legendary story of Muhammad Yanus. What began as a $27 loan to liberate 42 people in the village of Jobra, India from loan sharks mushroomed into the Grameen Bank and a Noble Prize (see related blog entry below on April 5, 2009).

In Alan's words: "... Yanus didn't set out from home one morning with the goal of ending poverty in Bangladesh or raising tens of millions of people around the world out of poverty. He wasn't thinking about starting a bank or a social movement. He certainly wasn't game-planning to win the Noble Peace Prize. He saw a woman in a village who needed help and, decided he could not not help her."

Rule 38: "If you want to think big, start small" resonates in the heart and mind of Bottom-Up innovators. The point is: whatever you feel passionate about and compelled to drive, do it! Welcome experimentation. Don't over-engineer a solution or wait for perfection. Alan's advice is "Start small. If it works, keep doing it. If it doesn't work, change what you're doing until you find something that does work."

Bottom-Up Innovation is all about starting small. We need to remind ourselves, in the heat of the battle, to never underestimate the repercussions of small actions.

While RULES OF THUMB is not a manifesto for Bottom-Up Innovators, it's packed with good advice and definitely a recommended read.

If you want to think big, start small.

A Bottom-Up innovator was killed today!

It wasn’t nice. He had the potential of becoming one of the best. He was, for sure, creative and innovative; he had the curiosity of a child and the spirit of an inventor. He was on his way to cross the threshold to Bottom-Up Innovation mastery. This was an important step. Once taken, he would have achieved full comprehension of the force behind Bottom-Up Innovation. He would have become immune to stagnated cultures and slow bureaucracies. He would have fully realized that no matter the circumstances, he was free to create and invent. He would have felt what all Bottom-Up Innovation masters feel: Power!

Yet, the organizational cancer had taken its toll. The bombardment of office politics, incompetent management, turf fights, short-sighted leadership, risk-adverse policies, and bureaucratic procedures was too much for him to take in.

The early signs were too subtle to notice: frustration, anger, and disappointment. A dose of fresh air, a good book, some time off; all of these could have been enough to reinvigorate the spirit in the early stages of the attack. Unfortunately, left unattended, frustration, anger, and disappointment create a vicious circle almost impossible to overcome. So, even when one would have thought that my friend would have survived, the silent killer, slowly but surely, delivered one blow after another.

He called me yesterday evening. I wasn’t sure what annoyed me the most, the static on the line or the helplessness I felt in face of my friend’s sense of defeat. Full of melancholy he blurted out: “I’m fed up! It’s not worth it! There’s no use trying to help! What the hell! They want a yes-man, they’ll get a yes-man!”

And alas, the killer chalked another victim on his wall. My friend lost, his company lost, and we all lost. For when a potential Bottom-Up Innovator is killed, we are all left without his or her potential creations.

As enlightening and fulfilling Bottom-Up Innovation can be, practicing it in backward organizational cultures is tough. Prepare for a difficult battle. Learn to read the cultural undercurrents of your company. Under the best circumstances, prepare for challenges and resistance to change. Under the worst, anticipate curses, political ploys, and vicious attacks. Realize that while there may be greener pastures elsewhere – cultures receptive to ideas and improvement – becoming a Bottom-Up Innovator will always demand strength and fortitude.

And take note, when the time comes to face the silent killer – and I assure you, if you are trying to innovate from the bottom-up, he will come – look him in the eye, and smile. He hates it!