Dave Pollard continues his discussion in A Prescription for Business Innovation Part 2 and gives us further principles of innovation strategy:
Flat, small, responsive, democratic organizations are inherently more innovative.
True innovation only occurs where there is consensus that there is an important problem to solve and a sense of urgency to solve it.
Competition is now dysfunctional, a vestige of earlier times of resource scarcity, and cooperation is now essential to effective innovation.
The customer is now king and needs only better decision making tools to become the sole driver of economic activity, rendering obsolete the need for marketing, branding, and other producer-driven mechanisms of influencing customer actions.
… organizational structures, processes and behaviours more commonly associated with businesses run by women are gaining traction in the New Economy, and that bodes well for innovation.
This is a current interest of mine, as I’m moderating a community of practice around elearning R&D in the region. The central issue is how to get a disparate group of companies, united by geography, to collaborate on innovation in the form of a problem, project or issue. As Dave Pollard writes:
Perhaps this is a universal trait that we need to consider when designing innovation programs: Everyone loves to engage in social activities that are fun, challenging and unthreatening, but when the social activity impinges on individual ‘territory’ or property, or on scarce resources, social and collaborative behaviour ceases and confrontational, competitive behaviour takes over.
I believe that the key to this community of practice will be to find that fine balance between collaboration and confrontation, but also holds peoples’ interest.
Seek and ye shall find. In response to my question, the Otter Group’s Kathleen explains some of her current business-related blog & RSS projects.
I believe blogs are ideal peer-to-peer learning and communications channels. Because they are so inexpensive to produce and maintain, they can be cost-effectively used for small groups and small projects.
It seems that the participation levels are higher with blogs. This was an issue that we had a few years back with a community-building project using a hefty document management system (think expensive) – it was just too cumbersome. This post is much more practical than what was reported in the NY Times on BloggerCon II and blogs for business, via Weblogg-ed.
More on Tom Malone’s new book "The Future of Work", this time from Fortune Magazine. According to the author, Malone expects that pervasive information technology will force businesses into becoming more democratic. Malone envisages four potential organizational models:
Loose hierarchies (e.g. open source)
Literal democracy ?ï¿½ï¿½Ç¨ï¿½ï¿½ï¿½ voting for your boss
Outsourcing through specialized guilds
Markets within organizations
I have not read Malone’s book yet, but it is now high on my to-do list. Via Stephen Downes, who makes this pertinent point in yesterday’s OLDaily – "… if democracy is actually the best form of governance, why don’t we use it in our institutions?"
Dave Pollard in A Prescription for Business Innovation Part 1 cites six basic principles of the innovation process:
Need Drives Innovation
Innovation starts with the Customer
Innovation Drives Technology
Innovations are Interconnected
Stories Transfer Knowledge
Innovation Requires Discipline & Patience
Having just completed an analysis of the learning industry in New Brunswick, I had the opportunity to reflect on global issues relating to the industry and make suggestions on how the industry could better position itself. Using Dave Pollard’s principles, what could the industry infer?
Since need drives innovation, a solid understanding of customers is essential. Build it and they will come, will not work. Neither will products that are developed because they have new features. Learning companies have to fill a real need ?ï¿½ï¿½Ç¨ï¿½ï¿½ï¿½ and there are lots of learning needs; just listen to the customers.
If innovation drives technology, then your competitive advantage is the ideas you can generate, not your technology, with its ever shortening half-life. Not only are creative people necessary, but they need a creative environment. Too many learning companies are still structured around the industrial command and control model.
The interconnectness of innovations means that you have to be looking outside your industry, your discipline and yourself, in order to see the connections. Perhaps magazines like the Utne Reader should become required bathroom reading.
If stories transfer knowledge, why do most companies (including learning companies) insist on PowerPoint slides with lists of bullets that are read out loud. Having survived another ?ï¿½ï¿½Ç¨?ï¿½death by PPT?ï¿½ï¿½Ç¨ï¿½ï¿½ presentation last night, it seems to be obvious to everyone, except the presenter, that no one is interested in reading a bunch of bullets. Tell a story. Tell your story. Share your stories. Remember that "markets are conversations". For example, all learning companies should be encouraging blogging so that they can look outside the region, sharing their stories and learning. Get the conversations going.
Like blogging, innovation requires discipline and patience. As Ms. Rice says, there is no silver bullet.
The Globe and Mail has covered the recent launch of Lawrence Lessig’s new book Free Culture: How Big Media Uses Technology and The Law to Lock Down Culture and Control Creativity. The book is available free for non-commercial purposes under a Creative Commons license. Since the online book launch, volunteers have already created audio versions of each chapter, also available for free non-commercial use.
This story follows on the heals of a Canadian federal court ruling that making files available for sharing on the Internet does not constitute copyright infringement. However, big media would have you believe that making content available for free has a detrimental affect on sales. This assumption has been proven incorrect by a recent Harvard Business School study, showing that the number of music file downloads has no relation to in-store CD sales.
The real story here is that the Internet has turned traditional business assumptions upside down. According to McLuhan’s laws of media, every technology has unexpected, and unintended, effects on its users (Extend, Obsolesce, Retrieve, Reverse). Lessig will sell more copies of his book because it is available online for free. This is especially true in his case, because the book is about digital copyright issues. Lessig has not given up his commercial rights, but he has created a legion of potential book buyers, without an expensive marketing campaign.
The lesson for businesses is that you had better understand the medium, and especially its effects, before it flips your business model around. The open source model, applied to open content, can actually be a financially solid business model. Think of it as the whistle-blow of the cluetrain 😉
A recent report on The elearning Sector in BC provides a marketing strategy for the industry. The report covers Global Trends and Market Opportunities; some regional comparisons and strengths and weaknesses. The key recommendations made in the report are:
To grow effectively, we recommend that companies:
1. Focus on the United States and Canada.
2. Target three to five vertical sectors, like the Olympics, rural communities, the federal government, healthcare, oil and gas and resource sectors.
3. Consider e-Learning opportunities related to gaming and simulations in the longer term.
4. Look at international markets in three to five years.
Industry associations and post-secondary institutions can support the growth of the sector, through education and research. Governments can provide ongoing support for industry-wide marketing, along with sponsoring further industry research and related policy development.
These recommendations could work for other North American regions, such as Silicon Valley, Ontario or New Brunswick. In BC’s case, the industry is even more fragmented than New Brunswick, but there is more access to larger firms (as clients or for sub-contracting) in BC than here in Atlantic Canada. One of New Brunswick’s advantages, of having one third of its population French-speaking, is quite unique when compared to BC. This advantage has yet to be translated into business success.
Many regions are looking for a way to capitalize on Canada’s perceived leadership in elearning. Like any other industry, success will come with the best business model, that is vigorously implemented, at the right time.
Via Rob Paterson, more on the future of work and business models, with an in-depth paper by George Defermos on the Networked Organisation. From the abstract:
This paper examines the latest of paradigms – the Virtual Network(ed) Organisation – and whether geographically dispersed knowledge workers can virtually collaborate for a project under no central planning. Co-ordination, management and the role of knowledge arise as the central areas of focus. The Linux Project and its development model are selected as a case of analysis and the critical success factors of this organisational design are identified …
This is an excellent synthesis of the rise of the corporate, command and control model, looking at the models of Taylor, Ford and moving on to the work of Senge. Defermos then goes on to a case study of Linux, compared to its competior – Microsoft. Defermos shows that the virtual organisation, as he defines it, is better suited for certain tasks than a centralised structure.
The virtual organisation may be best –
1. When there is a desire for standardisation, in order to increase innovation.
2. To ?ï¿½ï¿½Ç¨?ï¿½dethrone a product or vendor?ï¿½ï¿½Ç¨ï¿½ï¿½ with monopolistic tendencies.
3. To maximise the market web and share in the profits.
4. When all vendors need the end-users’ input.
5. To discourage ?ï¿½ï¿½Ç¨?ï¿½corporate backstabbing?ï¿½ï¿½Ç¨ï¿½ï¿½.
6. When the project is extremely complex.
It doesn’t seem that the networked virtual organisation will replace the centralised corporation, but it I’m sure that we will see more and more of these project-oriented organisations in this networked world.
Yesterday I wrote about Tom Malone’s new book "The Future of Work". Coincidentally, Jay Cross was at IBM’s Almaden Institute yesterday and posted this report on Tom’s book and IBM’s research efforts.
Flexible business solutions. The ability to grow organically. The capacity to respond to change in real time. A dynamic business and technical environment. A model that applies to all layers of the stack: systems, apps, and business. Shared processes. Loose coupling. Business objects. More intelligent businesses. Like a fractal patter, the model works at any scale: departmental, enterprise, or ecosystem.
It’s complete with diagrams which are very helpful. Thanks Jay.
Knowledge@Wharton has a recent article [requires free subscription] on start-ups and cooperation. According to David Hsu, co-author of "When Does Start-up Innovation Spur the Gale of Creative Destruction", some industries are more open to collaborative efforts between start-ups and established players. The key factors being:
1) the strength of the startups?ï¿½ï¿½Ç¨ï¿½Ñ¢ intellectual property rights; 2) whether they have relationships with intermediaries such as venture capitalists; and 3) whether their industry requires big investments in things such as manufacturing and distribution.
The biotech sector is described as an optimal industry for cooperation, but I’m wondering if our e-learning sector is also one. I would guess that intellectual property rights would be strongest for the technology companies ?ï¿½ï¿½Ç¨ï¿½ï¿½ï¿½ especially those with something unique. Now in the e-learning business there is not a lot of unique technology. One LCMS is similar to another, and there are many synchronous environments as well. A start-up that launched something like Groove, with few existing competitors, would have better chances of cooperation with the big guys. Now for point 2, the e-learning industry in New Brunswick does not have access to much VC financing, which is why the government plays that role. On point 3, the e-learning industry is OK, because there is not a lot of infrastructure necessary, mostly good people.
So it seems that, according to Hsu, the e-learning sector in NB could be fertile ground for cooperation between companies. A recent article on the industry in New Brunswick lists the cooperative environment as one of its strengths. For a region with many small companies, and few large ones, Hsu’s cooperative model may provide more impetus for growth.
I’ve written a bit about the need for business models that are more flexible than the industrial age corporation. An effort to look at the future of work organisational models has been going on at MIT since the mid-1990’s. in 1999 the team at MIT wrote a manifesto on the changes needed for future work structures. They called for the creation of organisations that are environmentally, socially and personally sustainable.
Thomas Malone, author of the forthcoming book "The Future of Work," has been involved with the Inventing the Organizations of the 21st Century initiative at MIT, and in a recent interview talks about open source as a good busines model for the future, and applauds the success of e-Bay.
Malone also explains that all new work models have resulted from improved communications systems.
We?ï¿½ï¿½Ç¨ï¿½Ñ¢re now in the early days of the third stage ?ï¿½ï¿½Ç¨ï¿½ï¿½ï¿½ transitioning from business kingdoms to business democracies. Much more decentralized decision-making is now possible because communication is so cheap. We can afford to have vastly greater numbers of people well-enough informed that they can make a lot more decisions for themselves, decisions that, in the past, were only possible in central offices.
Decentralisation is becoming a fact, but whether it will result in environmentally, socially and personally sustainable organisations, remains to be seen. I guess it’s up to us. I look forward to reading Malone’s new book.