Innovation

Innovation

The Nature of the Future – Review

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Nature of the FutureWhat will the future look like? Here are some glimpses.

  • Genomera: Crowdsourcing clinical trials.
  • BioCurious: Hackerspace for biotech.
  • Lending Club: “We replace the high cost and complexity of bank lending.”
  • ScholarMatch: Connect under-resourced students with resources, schools, and donors to make college possible.
  • Foresight Engine: How would you reinvent the process of medical discovery?
  • Open PCR Machine: Do it yourself thermocycler for controlling Polymerase Chain Reactions for DNA detection and sequencing.

These are all discussed in the book, The Nature of the Future, by Marina Gorbis, executive director of the Institute for the Future.

We are quickly finding out that when we go from a centralized communications infrastructure to a distributed one, when we connect everything and everyone, the result is not just to make things faster, better, and bigger. The social system itself acquires a fundamentally different quality: it becomes more diversified, more emergent, and often unpredictable.

This book provides probably the best background, and foreground, reading for most of the ideas discussed on this blog: complexity; the changing nature of work; the need to integrate learning into our work; and the primacy of cooperation in networks. Dedicated chapters cover money, education, science, governance, and health, with interesting future scenarios supported by current examples. While automation and robotics may be taking many jobs away, Gorbis identifies unique human skills which will continue to be important. These should be the core of any public education program.

  • Sensemaking
  • Social and emotional intelligence
  • Novel and adaptive thinking
  • Moral and ethical reasoning

As Gorbis writes, and I wholeheartedly agree, “Learning is social”.

We need to learn how to work better with machines, letting machines do what they are good at. Gorbis shows how machines and average people can outperform experts at playing chess. “Weak human + machine + better process was superior to a strong computer alone and, more remarkably, superior to a strong human + machine + inferior process.”

On the future of health care, Gorbis sees a new role for doctors. “In a socialstructed health care system, the doctor is not an omniscient God but a great conversationalist, astute observer, and insightful partner, that is, she is less a robot and more a real human being.” Doctors will be more like nurses, and with increasingly advanced technology, nurses will be more like doctors. I wonder if in the future, their roles will merge?

Gorbis identifies a major disconnect in our economy.

  1. Our technology tools and platforms are highly participatory and social.
  2. Our business models, by contrast, are based on market, i.e., monetary rewards.
  3. conflicts [between these two priorities] are likely to grow simply because the number of such endeavors [Twitter, Facebook, etc] is growing exponentially.

Gorbis concludes that “much new value and innovation will move from commodity-or-market-based production to socialstructed creation.” This reminds me of the T+I+M+N framework. A networked economy is not a mere modification of a market economy, but a form in itself that can address issues beyond the capabilities of markets.

Would I recommend this book? Yes. There are few people who would not benefit from this synthesis of the forces of technological, economic, and societal change coming at us. I will close with some practical advice, applicable to all, but especially for anyone entering the workforce.

In a world where people’s jobs will not be given to them, each individual will need to look deeply and understand what she or he is good at, how she or he can contribute to multiple efforts and navigate multiple roles and identities as a part of different communities.

Play, explore, converse

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Was the dominance of morality usurped by responsibility at the beginning of the industrial era? (Nine Shift: Part 1 – Part 2 – Part 3).

In the Industrial Age of the 20th century, you didn’t have to be of good moral character to work in the factory. But you did have to be responsible.  And so teachers in the 20th century schoolhouse and college taught (still teach) responsibility.   And by that  teachers mean specific behaviors.

Those behaviors are now obsolete. They made sense in the factory …  But not in the virtual office.

As we moved from morality to responsibility one hundred years ago, are we now shifting from responsibility to creativity in the network era? Just last week a creative teenager sold his mobile start-up to Yahoo! for $30 million. If creativity, and especially any resulting innovation, is what is valued and profitable in this era, then why are we teaching and reinforcing responsibility to its exclusion?

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Making sense of complexity and innovation

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Friday’s Finds:

friday2Gall’s Law: A complex system that works is invariably found to have evolved from a simple system that worked. A complex system designed from scratch never works and cannot be patched up to make it work. You have to start over with a working simple system. – John Gall

@euan : “My discomfort with case studies is the inclination to force things to make sense in retrospect when they didn’t in advance!”

@Cory_Foy – “Innovation comes from slack. Slack comes from saying no. If you’re afraid of both, no startup bubble technique is going to help you.”

Deconstructing Innovation: a complex concept made simple; by @ShaunCoffey

So it is important to understand that there is no one-size-fits-all philosophy in terms of successful innovation. The one constant is that you have to be open to change and new points of view. Innovation is continuous.

Successful innovators and entrepreneurs all embrace change and the risks that they pose. In fact, innovation is the poster child of the mantra that there are no rules. Only by trying out new things, by failing, by discovering what works and what doesn’t, do you gain answers to the innovation question.

Knowledge Leadership in the Era of Convergence –via @JonHusband

In an environment where speed, access, and tools allow workers to seamlessly collaborate across time zones, store massive amounts of data, and crowdsource the answers to difficult organizational issues, organizations that trend toward openness in the knowledge management arena will be better able to use new technologies and react to cultural and business changes. This makes leaders responsible for developing an open, collaborative culture, and suggests that inspiring these attitudes toward knowledge management will have positive individual and organizational consequences.

Competitive knowledge

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Knowledge itself is not a great business advantage, and if it were, academic institutions would be running circles around the Fortune 100. It’s what gets done with the knowledge that matters. But there still needs to be a good flow of information and ideas that get tested out in the specific context of the organization, such as its markets and the technology available. Nick Milton describes four types of organizational knowledge: Core, Non-core, New, & Competitive. Moving competitive knowledge into core knowledge is a key part of this flow.

Competitive knowledge. These are areas of new evolving knowledge that the company knows a lot about. This knowledge may well give them a competitive advantage – the first learner advantage. In areas of evolving knowledge, the company that learns the best and learns the fastest, has the potential to outperform its rivals.  The KM focus for competitive knowledge is on the development of best practice. As this knowledge is being applied around the business, there needs to be a continuous capture of knowledge from practice, comparing of knowledge through communities of practice, and development of best practice. Ownership of competitive competence probably lies with the communities and networks.

I have mapped Nick’s Boston Square to the coherent organization to show how communities of practice provide the link between social networks and enterprise work teams to filter new knowledge and find competitive knowledge.

competitive knowledge

One challenge of finding new knowledge is that social networks are comprised mostly of non-core knowledge. There is often more noise than signal. However, given their diversity, social networks are where we can find innovative ideas. This is why curation and PKM skills are so important for organizations today. Testing new knowledge is where communities of practice can be handy. Gaining competitive knowledge is the obvious ROI for fostering internal and external communities of practice.

So here is a clear value proposition. Communities of practice act as filters of new knowledge in order to find competitive knowledge for your organization. People who understand the context of the work teams must participate in communities of practice, as only they can identify what new knowledge could be competitive. That means that those doing the work need time and support to get away from their teams and see the bigger picture. Does your organization provide this time, or is everyone too busy focused on managing core knowledge? The implications of myopic work practices are quite obvious.

Some thoughts from 2012

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Here is a review of the five most popular posts here this past year, with a short synopsis of each. One year, distilled into a few paragraphs.

Informal Learning: The 95% Solution

Informal learning is not better than formal training; there is just a whole lot more of it. It’s 95% of workplace learning, according to the research reviewed by Gary Wise.

To create real learning organizations, there is a choice. We can keep bolting on bits of informal learning to the formal training structure, or we can take a systemic approach and figure out how learning can be integrated into the workflow – 95% of the time.

You simply cannot train people to be social

Effective organizational collaboration comes about when workers regularly narrate their work within a structure that encourages transparency and shares power & decision-making.

Creating a supportive social environment is management’s responsibility.

My experience is that changing to more collaborative, networked ways of work requires coordinated change activities from both the top and the bottom. It has to be a two-pronged approach and it will take some time and effort.

Three Principles for Net Work

Narration of Work – Transparency – Shared Power

The high-value work today is in facing complexity, not in addressing problems that have already been solved and for which a formulaic or standardized response has been developed. One challenge for organizations is getting people to realize that what they already know has increasingly diminishing value. How to learn and solve problems together is becoming the real business advantage.

The Learning Organization

  1. Learning is not something to “get”.
  2. The only knowledge that can be managed is our own.
  3. Learning in the workplace is much more than formal training.
  4. When we remove artificial barriers, we enable innovation.
  5. Learning and working are interconnected.

Cooperation trumps Collaboration

In networks, cooperation trumps collaboration. Collaboration happens around some kind of plan or structure, while cooperation presumes the freedom of individuals to join and participate. Cooperation is a driver of creativity.

Shifting our emphasis from collaboration, which still is required to get some work done, to cooperation, in order to thrive in a networked enterprise, means reassessing some of our assumptions and work practices.

Collaboration is only part of working in networks. Cooperation is also necessary, but it’s much less controllable than our institutions, hierarchies and HR practices would like to admit.

enhancing innovation

hyper-connected pattern seeking

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Here is more confirmation that work is learning, and learning is the work. From a recent post by the BBC:

Crucial in surviving all of these unpredictable variables is the use of network design tools – software suites that can simulate what happens at the point of disaster.

“This helps when decisions need to be made in the next couple of days – maybe even the next couple of hours,” explains Tim Payne, research director for Gartner analysts.

“The processing speed at which they can run through a plan or simulation can take seconds — rather than having to run it over night.”

It means companies can take a highly-educated guess at how their decisions will immediately impact their supply chains – and their ability to meet their customer’s demands.

As feedback loops get faster with increased connectivity, the ability to learn and ‘spin on a dime’ becomes paramount. The BBC article discusses the use of technology to analyze data and spot potential risks and trends. But what about people? Technology is only a small part of creating more nimble companies. Workers have to be able to recognize patterns in complexity and chaos and be empowered to do something with their observations and insights.

The Principles of Networked Unmanagement provide an initial framework.

It is only through innovative and contextual methods, the self-selection of the most appropriate tools and work conditions, and willing cooperation that more productive work can be assured. The duty of being transparent in our work and sharing our knowledge rests with all workers.

Innovative and contextual methods mean that standard processes do not work for exception-handling or identifying new patterns. Self-selection of tools puts workers in control of what they use, like knowledge artisans whose distinguishing characteristic is seeking and sharing information to complete tasks. Equipped with, and augmented by, technology, they cooperate through their networks to solve complex problems and test new ideas. This only works in transparent environments.

If learning, and unlearning, are not integrated with the daily work flow then opportunities, such as the Duchess’s dress cited in the BBC article, will be missed. Organizations and their ecosystems that can learn and adapt quickly will be able to capitalize on the myriad opportunities that are constantly presented in a hyper-connected economy. This is nothing new, but it is becoming much more crucial for business survival.

 

Become your own upstart

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Upstarts & Incumbents

In Clayton Christensen’s book, Seeing What’s Next the authors discuss how new business entrants (upstarts) can target non-core customers of industry incumbents. These come in three categories (overshot, undershot and non-customers) and by targeting these customers, entrants can avoid direct confrontation, while developing skills and expertise in areas outside the core business of the incumbents. Once the entrants have grown “under the radar”, they can grow to directly confront the incumbents. They can develop “asymmetrical skills” based on “asymmetrical motivations”. Basically, they are motivated to do new things that do not have the revenue streams of the existing products and services of incumbents.

According to this model, new entrants to a market should identify potential customers based upon the markets of established incumbent(s):

  1. Undershot – willing to pay more for more functions/services
  2. Overshot – find current offering more than adequate
  3. Non-consumers – lack ability or the wealth for current service / products

For a new entrant, the best market is the non-consumer (also the least demanding) who is under the radar of the incumbents. The second best target group is the Overshot Customer (specialist displacement for mainstream) who is willing to accept a more specialized product/service than the broader offering of the incumbent, or one who is looking for something cheaper and “good enough” (low end).

In business, there are always upstarts with different motivations and new skills looking for new opportunities and disruptive innovations. Some of the key questions to ask when looking for signals of change in any industry or market are:

  • What jobs are customers trying to get done?
  • Are customers not served, undershot or overshot by current offerings?
  • Where are new business models emerging?
  • What role do regulatory agencies play?
  • Has a recent technology changed how work gets done?

Internal Upstarts

You could look at your current organization as an incumbent and yourself as an upstart and ask similar questions to those above. What is the organization focused on and who are the overshot and undershot customers? Who are the non-consumers? You can do this individually, as a team, or even a department. Perhaps you realize that your organization is not dealing well with networked customers and has poor knowledge-sharing and collaboration skills. With asymmetrical motivation, you can start learning and developing these yourself. Over time this will give you asymmetrical skills, like online community management or mastery of social media tools. None of this would be at odds with the organization or your current work.

If you think that your organization may not survive the next onslaught from an external upstart, then perhaps it’s time to realize that with the right motivation, you and your colleagues could develop the skills needed to take the upstarts on when the time comes. So start doing something the organization does not want to do and few have the skills to do. If you think that successful organizations in the near future will practice networked unmanagement, then you can start developing asymmetrical skills for the networked workplace now by:

Organizational, institutional, technological, and market changes are certainly coming as the network era gets into full swing. Watch for the signals of change as existing industries fall to the upstarts and be ready yourself.

It’s about value creation

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There’s always something thought-provoking on Sigurd Rinde’s blog. His latest post, the information age fallacy, looks at the amount of time wasted in managing information flows, instead of creating anything new. The problem with information technology, as Sig describes it, is that IT, “has mostly produced faster ways to do exactly the same we did two thousand years ago.”

“The figures are rather simple – knowledge work stands for about 60% of the world’s value creation while knowledge workers spend on average about 2/3rd of their time on managing the flows. If we could automate that management and spend that time on value creation instead – i.e. change “what” we do – we would look at approximately 120% GNI growth world wide.”

The amount of time at work wasted doing certain non-productive tasks can be up to 50%, according to some studies, and this does not even include time wasted in meetings.

rp_wasted-time.png

Adapting to a networked economy and workplace takes time. This time has been overlooked in our race to get the next shiny piece of technology. Oscar Berg summed it up on Twitter recently and said that the main reason for our technology-centric approach to work is that we are hoping “for a silver bullet that will kill all our problems in one shot.” Obviously, the evidence shows that the next piece of technology will not solve our problems and may actually compound them.

Value is created by workers with creativity, curiosity, and empathy. Value creation in the 21st century is having ideas, connecting people and ideas, and trying new things out based on these ideas. Not only do these activities take time, they are highly social, as success often depends on who we work with. Spending time on merely managing data flows saps our energy and drive for doing creative work.

Maybe we need to look at productivity differently. Instead of asking, what have you done for the company this week, we should be asking what ideas you have had and what have you done to test them out? It might get us away from measuring and doing things that should be automated in the first place. Automation is not a bad thing if you know what to do with the extra time it provides, so let the droids do the boring stuff, and let’s focus on value creation.

A coherent path to social business

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Thierry de Baillon and Ralph Ohr, in their post on Business Model Innovation as Wicked Problem, conclude the following:

An ever increasing pace of change leads to a decrease in life time of operating business models. Companies are therefore forced to reinvent themselves more frequently by creating new business models. Entering new businesses through open business model innovation exhibits a wicked problem structure. In order to properly address those problems, companies have to follow emergent strategies and need to put decentralized, self-organizing structures in place. Social business brings an answer to the urgent necessity to successfully tackle corporate reinvention and to enhance strategic adaptability by connecting individual human stakeholders.

What kinds of “emergent strategies and decentralized, self-organizing structures” can be put in place? I think it boils down to three things: Openness, Knowledge-sharing, and Diversity.

1. Openness can be encouraged through the use of social networks and enterprise social platforms. People need to know what others are doing and the default mode has to be sharing. If workers cannot connect with anyone they need to, then the knowledge needed to address a problem may never be revealed to those who need it. Opening communications to everyone is the antithesis of bureaucracy, where lines of control are ever-important.  Bureaucracies are the enemy of innovation, as they favour self-preservation over change. They are self-serving. They are also reinforced by the notion of jobs. Openness means getting rid of jobs, which subvert openness, innovation and emergent practices. Social networks, powered by social media, help to remove bureaucracy and antiquated ways of working.

2. Just because a system is open does not mean that a learning organization will emerge. People need to practice knowledge-sharing through the narration of work and personal knowledge mastery. Both are simple concepts to understand but take time to become daily practices throughout an organization.

3. Finally, any organization needs to have a diversity of opinions in order to remain innovative and deal with the wicked problems described by Thierry and Ralph. “Connections drive innovation“, according to Tim Kastelle. “We need input from people with a diversity of viewpoints to help generate innovative new ideas. If our circle of connections grow too small, or if everyone in it starts thinking the same way, we’ll stop generating new ideas.” This means giving access to social networks, eliminating tribes such as departmental silos, and actively looking for people with different backgrounds and experience.

Putting all of this together, is what we at the Internet Time Alliance call a coherent organization.

The Coherent Organization:
Cooperation & Collaboration flowing between work teams & social networks
via communities of practice

From observation to breakthrough

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From multiple observations come ideas. From multiple ideas can come new insights. From multiple insights we can create stories. From our stories, we can change beliefs. In a nutshell [my interpretation], this is what Gunther Sonnenfeld discusses in much greater detail in The Great Planning Paradigm. Sonnenfeld’s post is focused on marketing, an area where I have little experience.

I find The Great Planning Paradigm is a good framework to look at innovation (breakthroughs) in general. It also aligns with personal knowledge management (PKM) or those routine behaviours that we can practice and perfect in order to enhance learning and innovation at an organizational level. The PKM framework of Seek-Sense-Share has several similarities. Observations equate to Seeking. Insight equates to Sensing. Telling stories equates to Sharing. It is most interesting to see a connection between PKM and marketing, something I would not have considered. Everything, it seems, is connected.

In PKM and innovation I showed how Seek-Sense-Share aligns with the four skills that most successful innovators exhibit. The framework has similarities with the four innovation skills noted by Scott Anthony, author of The Little Black Book Of Innovation. Seeking includes observation through effective filters and diverse sources of information. Sense-making starts with questioning our observations and includes experimenting, or probing (Probe-Sense-Respond). Sharing through our networks helps to develop better feedback loops. In an organization where everyone is practising PKM, the chances for more connections increases.

Collaboration is working together for a common objective, while cooperation is openly sharing, without any quid pro quo. Both are necessary in order to connect the work being done in organizations with new ideas outside the organizations. Innovation is not so much about having ideas, as making connections.

I recently explained the Seek-Sense-Share framework in my session with En Nu Online in the Netherlands, with quite positive feedback that the image below helped to convey how it worked. We seek new ideas from our social networks and then filter them through more focused conversations with our communities of practice, where we have trusted relationships. We make sense of these embryonic ideas by doing new things, either ourselves, or with our work teams. We later share our creations, first with our teams and perhaps later with our communities or even our networks. We use our understanding of our communities and networks to discern with whom and when to share our knowledge. Sometimes, timing is everything.