Innochat Transcript – 13 August – The Effects of Booms and Busts on Innovation
August 13, 2010 by Andrew (Drew) · 1 Comment
David W. Locke stepped in this week with a great framing post and moderation of the topic: The Effects of Booms and Busts on Innovation. Many thanks to David for his efforts!
A vibrant discussion was had and the perils of commoditization came to light as a pattern that drives down innovation performance due to resultant cost pressures and resource constraints. It was also interesting to see discussion on how companies focused on responding to market cycles need to pay attention to their own product lifecycle management, too.
David Locke’s tweet: “Fast followers don’t innovate. They just drag your price down.” certainly points toward the competitive environment in a post-boom world. Survival outweighs all other factors. Perhaps the most telling tweet he offered was his assessment on the current state of the economy: “It’s not just biz not usual, there is no biz, and will not be any biz for a very long time. Boom ate future.”
Ouch
Innovation & the Status Quo: The perils of groupthink, stereotyping and system justification
August 9, 2010 by Andrew (Drew) · 2 Comments
Everything is in a state of flux, including the status quo.
- Robert Byrne
Effective innovation demands embracing change. Unless you are completely dissatisfied with what you have now, the idea of forsaking some of your present discomfort for the pain of full-blown change not only seems unlikely, it is downright foolish. This is the conundrum faced by those tasked with improving their organization’s innovation culture. (“Wet noodle at the ready? Push! Push, I say!”)
Regardless of whether we choose to embrace it or not, change happens. The rules of participation are frighteningly simple—lead, follow, or get out of the way (with a hat tip to General Patton.) But here’s the issue: what we say we want to do (innovate) is not necessarily what we end up doing (clinging to our known circumstances), because so much in our individual psychology is reinforced when we gather with others in groups. We fall prey to our inability to avoid groupthink, we rely on stereotypes, and we cling to our current circumstances by embracing system justification.
Mine! Mine! Mine!
If you’re not a liberal at twenty you have no heart, if you’re not a conservative at forty you have no brain.
- Winston Churchill
As much as Churchill’s quote above rankles me, I cannot deny it. The young easily seek out and embrace the new, because they have a bias towards discovery. They are “wired” to look for ways they can differentiate themselves from their elders, and even classify themselves as distinct and separate from their peers based on their passing passions.
The young, and perhaps the young-at-heart, are predisposed to innovation. They possess things fleetingly—not with less longing or even covetousness, but simply with the notion that something newer and brighter and shinier will arrive soon. For them, the novelty of the new outweighs the inconvenience of making a change, because it is relatively easy to move on to the next new thing if you haven’t lived with the old thing for very long. (This may be one of the primary reasons why consumerism has gained such a toe-hold among burgeoning middle-class youth worldwide.)
Those older and, if we are casting about for additional generalizations, wiser do seem to slide into conservative patterns. The pace at which they exchange the old for the new slows down. Fads pass by at an alarming rate. Innovations in technology and customs become more elusive. Why? Primarily the status quo, like some extraordinary gravitational object at the center of our lives, begins to take hold and lock things into our personal orbits. This causes habits to form around the objects and ideas that comfort us, including existing products and services. And we hold on to them dearly, as though they were the true bedrock of our existence.
In light of this, is it any wonder that innovations struggle to come to life in organizations where management systems and processes are usually governed by those in place the longest?
The problem with habit-forming
The riskiest thing we can do is just maintain the status quo.
- Bob Iger
We have a cognitive bias for the status quo. People tend not to change an established pattern of behavior unless they have a direct and compelling incentive. Status quo bias is a reliance on the status quo in the absence of supporting evidence in its favor, or even in the case of evidence for not supporting its sustenance. Arguing to preserve the status quo is usually happens when people oppose a large, often radical change. Status quo bias accepts the present situation without the benefit of any inquiry or conversation about its merits.
Hard at work supporting the status quo is system justification. System justification is a theory within social psychology that holds that people not only want to see themselves and their own groups favorably, but they also want to look favorably on the overarching social order (the system they are justifying). A consequence of this behavior is that existing social, economic, and political arrangements across organizations (small or large) are often preferred, and any alternatives to the status quo, if conceived of, are maligned or avoided. System justification works to make the present circumstances unassailable.
The status quo, like a pack-a-day smoking habit, is a hard habit to break.
When faced with a bias-led desire to retain the status quo, newly conceived innovations may face the psychological equivalent of the immoveable object. Breaking through that requires putting the status quo front and center. It means not accepting it at face value, but rather examining it to reveal its deficiencies and incapacities in a public manner. Only by opening up the status quo to analysis can we make room for new thinking and behavior that attends innovation.
But that is only the beginning.
Yes, we’re all individuals
Take your life in your own hands, and what happens? A terrible thing: no one to blame.
- Erica Jong
Along with the impossibility of shedding an unexamined status quo, we are also faced with unexplored attitudes that provide support to the status quo by reinforcing our thinking about people in our organizations. This stagnant thinking is the result of stereotyping. Stereotypes are insidious, standardized and simplified concepts of classes or groups of people based on some prior assumptions. They are often learned by observing others, and may be highly contagious, and possibly one of the most harmful forms of groupthink pervading social structures.
As much as we might believe we are unique and truly individualistic in our world views it is remarkable how much stereotyping is at play in the life of our organizations. Our familiarity with negative stereotypes in terms of gender roles or race may lead us to believe we are beyond that, but in organizations, stereotyping is rife. Consider the ways in which we stereotype engineers, or accountants, or human resource professionals; how often do we fall prey to the casual shorthand of referring to all members of a business function in the same general terms? By doing so, we prevent our ability to see circumstances clearly, seeing behavior and explaining it away, rather than observing without judgment in order to form true insights.
The peril of stereotypes, especially when buttressed by the warm embrace of the status quo, is that they leave little room for the novel. They dismiss or disregard differences at the expense of perceived uniformity, and cut off yet another path to creativity and innovation.
Look anew with fresh eyes
The dogmas of the quiet past are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew and act anew.
- Abraham Lincoln
If ever there was a time that we needed to innovate, it is today. The status quo is not an acceptable alternative. A stereotypical view of the people around us will give us no source of joy, either. We must break our habits and see the world around us with fresh eyes. That might even mean taking a close look at where we stand (or sit) in the world, too.
By moving our position, and choosing to question what we think we know, we can begin to create room for more innovative solutions to the pressing demands of the present. To keep doing what we are doing seems not only foolish, it may be downright dangerous.
What can you see anew?
Innochat Transcript – 5 August – Fixing an Innovation-averse Corporate Culture
August 5, 2010 by Andrew (Drew) · 3 Comments
Another fun time with the excellent moderation of Renee Hopkins – always a pleasure. A great topic which was well turned over by those present, but as with all #innochat topics there is always room for more. Take a look and weigh in.
And next week it looks like we may discuss: cultural problems in an org where ALL is innovative and nothing actually gets done!
Playing with a Full Deck – OnInnovation
July 30, 2010 by Andrew (Drew) · Leave a Comment
Low Tech Tools to Foster High Output Innovation Thinking
One of the questions often asked by those seeking to create a strong innovation culture is, “What are some good tools for engaging people across my organization?” Well the consultant in me would usually hedge his bets and would offer the universal response, “It depends.” But that is as singularly unsatisfying to say as it is to hear, so I mostly take a multiple alternative approach in the hopes of landing close to the targeted need. The first place I usually start is with some of the very lowest of low tech: playing cards, or their trading card equivalent. Why?
For the reason why, see the full post here at the OnInnovation blog – powered by The Henry Ford.
Innochat Transcript – 29 July – Stealth Innovation
July 29, 2010 by Andrew (Drew) · 1 Comment
Due to the inability to gain access to my Ning account any longer, I’m posting the transcript temporarily here. It will be moved to a new location shortly (as will the other transcripts.) Jason Pamental is working with Renee Hopkins and Gwen Ishmael to create a brand spanking new home for #innochat. Thanks Jason!
Thanks to Renee Hopkins for moderating this great topic – lots
Innovation Herds: Me-too-ism & the dumbness of crowds
July 26, 2010 by Andrew (Drew) · 3 Comments
Great minds think alike, but fools seldom differ.
- English Proverb
In honor of the recent football (okay, soccer) World Cup—and congratulations to South Africa for pulling off a sterling tournament (Bafana Bafana!) and the Spaniards for their first tournament victory—it seems appropriate to consider the impact of the herd on innovation practices. Not just any herd, though; this is the herd that forms when two opposing packs of 5-year-olds play the glorious game: the herd of Pee Wee Soccer.
Sound and motion with little to show for it
For those of you who don’t have children or have not seen children this age playing soccer, you have missed what certainly is an experience. The rules of soccer seem immaterial. Yes, there is a ball in play. Yes, there are referees and linespeople. Yes, there are goals at each end of the usually shortened field and two equal-numbered teams of players. The basic framework is the same, but the way the game is played is quite…different.
The pervading game objective practiced by both teams is to quite literally “crowd the ball”: where the ball goes, that’s where all players attempt to go, except for those few who become distracted by a parent or sibling on the sideline, or by the color of the sky, or by something bright and shiny, or need to re-enact football hooliganism an so on. You get the picture. What forms is a tight pack around the ball, hiding it from the spectator’s view, and which moves as a herd up and down the field. Occasionally the ball will “escape,” only to be recaptured by one of the team members who, in their inability to run and dribble the ball simultaneously, will stall until the rest of the members from both teams re-form the herd.
No one here but us sheeple
The greatest difficulty is that men do not think enough of themselves, do not consider what it is that they are sacrificing when they follow in a herd, or when they cater for their establishment.
- Ralph Waldo Emerson
What of this herd? And what does it have to say about the impact of the herd mentality on innovation? A short explanation can be found here.
Given our complex worlds with their voluminous sensory inputs, we are wired to adopt a series of mental shortcuts (termed heuristics) that enable us to process only the amount of data necessary, in as short a time as possible, to meet our immediate needs. Think of heuristics as experience-based models that help in problem-solving and discovery. They drive much of our daily behavior without us even recognizing it. The reason they are effective is that they relieve us from treating every circumstance as critically important, offering relief from having to think too hard. Is it really necessary to calculate the optimum parking space at the mall, taking into consideration timing, prevailing weather, shopping patterns, etc.? No? Right—open space, here I come!
By employing heuristics, we create a series of short cuts that enable us to focus on more complex issues, more holistically and systemically, as the need arises. Heuristics, however, reinforce situational thinking and action. In recent studies conducted at the University of Leeds in Great Britain, researchers discovered that it takes a minority of just 5 percent to influence a crowd’s direction—and that the other 95 percent follow without realizing it. If we hearken back to the heady days of the dot-com book in the early 2000s, we can see this pattern in the practices of developers, who threw together “me-too” websites; institutional investors, who threw money at anything with a website; and stock market investors, who piled their money into every “sure thing” they heard about from their hairdresser, dog walker, or cab driver. And that herd behavior ended well, didn’t it?
Wise crowds and the benefit of discomfort
The dissenter is every human being at those moments of his life when he resigns momentarily from the herd and thinks for himself.
- Archibald MacLeish
Unless we take steps to separate ourselves from the crowd and seek to break our ingrained patterns of thinking, we will continue to be drawn to the herd. In James Surowiecki’s bestseller The Wisdom of the Crowds, he noted that there are highly functional types of groups that possess not a herd mentality, but an inherent wisdom. From his perspective, if four basic conditions are met, a crowd’s “collective intelligence” will produce better outcomes than a small group of experts. Surowiecki says that wisdom will prevail even if members of the crowd don’t know all the facts or choose, individually, to act irrationally. “Wise crowds” need 1) diversity of opinion; 2) independence of members from one another; 3) decentralization; and 4) a good method for aggregating opinions. In short, effective groups need guidelines (like heuristics), but ones that are focused on differentiation and not similarity. “Me-too” has to be retired so that “What if” might prevail.
Unfortunately, when wisdom meets the herd, the prevailing outcome is the dumbness of the crowds.
To reach beyond the herd, organizations must embrace difference and the discomfort that comes from not adopting the first, or easiest, answer to a presenting challenge. Clay Shirky, a professor in NYU’s Interactive Telecommunications Program, described in his book Here Comes Everybody the benefits of groups breaking out of the herd mentality and moving toward “collaborative production”:
Collaborative production, where people have to coordinate with one another to get anything done, is considerably harder than simple sharing, but the results can be more profound. New tools allow large groups to collaborate, by taking advantage of nonfinancial motivations and by allowing for wildly differing levels of coordination.
Shirky, pp. 109
Over time, even the Pee Wee Soccer team learns how to play the game. Each player discovers his or her own strengths, and a good coach will recognize those differences and create something greater than a mob out of them. Their efforts become grounded in collaborative production. In our organizations, innovation processes that support our thinking and don’t provide ready answers give us the opportunity to develop solutions that reach beyond the herd. We can choose to stretch past the simple and explore the complex so that our solutions are new and not “me-too.”
We herd sheep, we drive cattle, we lead people. Lead me, follow me, or get out of my way.
- General George S. Patton
Being in a herd is actually a matter of choice, one that must be made consciously in order for a range of alternatives to be revealed. In a competitive marketplace, would you rather be in the herd, where the view rarely changes, or out front? I thought so.
Innovation Failure & Ownership: What happens when we own our successes and abdicate our failures
July 23, 2010 by Andrew (Drew) · 1 Comment
It is possible to fail in many ways…while to succeed is possible only in one way.
- Aristotle
Innovation is a high-stakes endeavor. Much may be risked on the hoped-for chance of reward. The success or failure of a single innovation may win or lose reputations and careers. In some organizations, the retribution for failure may be swift and harsh, while the rewards for success may be just as fickle. An innovation approach that drives toward internal winners and losers in an organization is not built for long-term success. The trouble with that binary perspective—one in which innovation is a zero sum game—is that it negates the true value of the innovation process. That value resides in the opportunity to rapidly learn and adapt.
Learning as a means of advancing an organization’s strategic intent is nothing new. Peter Senge captured an incredibly useful model for the “learning organization” in his book The Fifth Discipline. He proposed that learning organizations are those in which members continually expand their capacity to create new solutions and obtain the results they desire. Senge saw that by expanding patterns of thinking, where people were able to see the systems in which they were operating from a holistic perspective, organizations could set their collective aspirations free. This required that organizations focus not on individuals but on the larger range of interactions within the organization and between affiliated organizations.
Which sounds like an easy prospect, but is in practice quite difficult. Without care and attention, the learning organization runs hard into the Darwinian determinism of the present-day competitive organization—the kind where only the successful survive and the less than successful are afforded “opportunities for personal growth outside the organization.”
Where has the love gone?
If at first you don’t succeed, failure may be your style.
- Quentin Crisp
Given that we have been exploring cognitive biases, mental models, and the social psychology influences on innovation, it’s fitting that we should leave this subject area with a look at the impacts of success and failure on both individual behavior and organization performance. Organizations, with their competitive pay structures and performance measures, make membership and participation a high-risk game. Those who know how to play the game, sometimes in spite of their relative productivity and output, succeed, while those who struggle to position themselves strategically, or who perceive that “playing” is beneath them, are left wondering “what happened?” as they observe less-deserving peers receive recognition, rewards, and advancement.
What we observe in these circumstances are the results of “adaptive bias.” Adaptive bias is the notion that the human brain has evolved to reason adaptively, rather than truthfully or even rationally, as a mechanism to reduce the overall cost of cognitive errors (misunderstandings derived from faulty perception.) Consider it a higher level of self-preservation. As with many biases, it addresses uncertainty by driving the subject (or subjects) to more concrete action.
Perhaps Oscar Wilde assessed the situation correctly when he offered that, “It’s not whether you win or lose, it’s how you place the blame.” For regardless of the effort expended, if you cannot align yourself with success in a highly competitive environment, you will not receive personal recognition. For some, an organization with this kind of scorekeeping causes them to go to extraordinary lengths to claim ownership of successful endeavors while distancing themselves from failures.
Captain of your own destiny or cruise director on the Ship of Fools?
A man may fall many times, but he won’t be a failure until he says that someone pushed him.
- Elmer G. Letterman
For our organizations to be more successfully innovative, it is necessary to elevate the competition from the individual play level to the market performance level. If competitive performance systems remain intact inside organizations, then the scramble to claim ownership for innovations will continue. The net effect of that jockeying for position is short-term, escalating, divisive conflict (as opposed to generative conflict) and a long-term erosion of organization trust. Not only are these both an impediment to innovation, they are hazardous to an organization’s health and viability.
An organization that gears itself for driving and supporting competitive internal systems will nullify the collaboration necessary for large-scale and system-wide innovation by fostering another bias in the member population. Known as the “self-serving bias,” its presence means that individuals perceive themselves as responsible for desirable outcomes but not responsible for undesirable outcomes. However, the act of failure avoidance denies us the opportunity to learn, and in attempting to position our failure as someone else’s, we perhaps doom ourselves to repeating it.
A global high-technology company, which shall remain nameless to protect the guilty, would be considered highly successful by most measures. It is big, powerful, and has played a significant role in creating and moving markets. Unfortunately, today that company is beginning to reap the rewards of the competitive culture it has sown. In this organization, ideas must “fight for survival” and only those people who can passionately, loudly, and often angrily argue their case prevail. Those who fail are derided, while those who appear to succeed move into management roles, only to perpetuate this pattern.
The resulting organization is one that is driven by fear and conflict, moving from market misstep to market misstep with little to signal that it can recapture its earlier flair for innovation and success.
The leadership of many an organization falls into this pattern of internal competition without questioning its role in the success of their organization. They repeat what they have observed, learned, and actively supported in their past roles—because if it worked in the past, it must surely work in the present. Their inability to question the value of internal competition results not in a learning organization but one that survives by paying lip-service to collaboration and cooperation, while leaving carnage in its wake as the assignment of blame continues apace.
Failure in innovation is not to be avoided, it is to be embraced.
Success is the ability to go from one failure to another with no loss of enthusiasm.
- Winston Churchill
What we actually need to practice is the art of failure ownership. Unlike the pain of an internally competitive landscape, the process of failure ownership requires that an organization support intellectual curiosity and an inquiry into the nature of how systems operate and interrelate. Innovation thrives on the ever-engaging quest for discovery that often meets with failure along the way. But failure is not an end-point, it is merely a way station. We need to enthusiastically own failures to the extent that we can unpack them, observe their genesis, and understand their triggers. With that learning in hand, we can then advance our innovation intent further by “failing forward fast.”
Innochat Transcript – 22 July – Tribal Leadership and Innovation
July 23, 2010 by Andrew (Drew) · 1 Comment
Due to the inability to gain access to my Ning account, I’m posting the transcript temporarily here. It will be moved to a new location shortly (as will the other transcripts.)
Thanks to Andrew Townley for moderating this great topic – truly sad to have missed out due to client commitments.
Innovation Beyond the Average: the challenges of delusions of grandeur and the Dunning-Kruger effect
July 19, 2010 by Andrew (Drew) · 6 Comments
Ignorance more frequently begets confidence than does knowledge.
- Charles Darwin
Innovation is not necessarily a size game. Bigger is not necessarily better. Large organizations keenly focused on innovation benefit from being able to exploit resources, processes, systems, and human intellect in a way that’s beyond the scope of a smaller enterprise or sole entrepreneur. 
Access to a breadth of elements means the possibility of widely divergent outcomes. Unfortunately, with size comes inertia, and one of its causes is the degree to which stable systems create immovable patterns and a certainty that comes with having “seen it all before.”
This kind of organization knows itself. It has a pool of clients it knows well and for whom it meets well-defined, long-term needs. It has access to resources via supply chains it has developed over time, offering little in the way of surprises. You could call this organization “fat, dumb, and happy.” And you would be right. The truth is that it has created a cultural delusion of grandeur, which makes it struggle to innovate.
Dangerous self-satisfaction
There is nothing more frightful than ignorance in action.
- Johann Wolfgang von Goethe
Howard Johnson’s, MCI, Enron, Pan American World Airways, Digital Equipment Corporation, Marshall Field’s, and the litany of the half-forgotten could continue. Whether willful victims of their own misbehavior or ignorance of the changing needs of their customers and markets, these former market leaders have died the most tragic of unnecessary deaths. They thought they were at the far right of their market’s respective performance bell curves, living in gloriously smug self-satisfaction, and they were punished for it.
The problem with that kind of delusion is that the most obvious contrary data will be ignored until it is too late. I’ve seen clients, thinking that they were indestructible, behave in ways that were completely contrary to their best interests because they refused to believe their previously unassailable market position was not only in jeopardy, it had evaporated. They stuck to their old product lines, offering the same levels of distracted customer service, while their industry competitors passed them by, embracing innovations at all levels of their organizations.
There are some in venture capital circles who will tell you, “If you are not growing, you are dying.” They refer specifically to revenues more often than not. For the adage to be true, a more expansive view of growth is required. Growth need not only be found in revenues, it may also manifest in broader service sets, expanded ranges of customers, and wider social impact, among other factors. The self-satisfaction that comes from past success gets in the way of this pursuit because it usually means we don’t seek out those innovations we need to survive and thrive.
Applied ignorance
No one is satisfied with his fortune, nor dissatisfied with his intellect.
- Antoinette Deshoulieres
Self-satisfaction is not the only path to innovation entropy. Success also reinforces a mindset of superiority. Each success reinforces a belief across an organization that the collective choices made and actions taken are the result of superior intellect and application. Which is fine, except the psychological tendency is to ascribe all success to our direct efforts, regardless of actual impact. We all think we’re above average and smarter than the next person in the room, or our competitors, or worse yet, our customers. (Good grief.)
There is a great saying in the USA: “Even the blind squirrel will eventually find a nut,” which highlights how arbitrary and capricious success may sometimes be. Especially if we are not vigilantly seeking ways to improve and extend our success through innovation.
Proctor and Gamble, under its previous CEO A.G. Laffley, recognized the flaw in perceiving that all success could be derived from within the company. P&G had, for many years, actively practiced ignoring ideas from outside the company, literally living the phrase “not invented here.” They refused to consider the possibility of good ideas existing elsewhere. Under Laffley they defeated this mindset by embracing the idea of “proudly found elsewhere,” which meant that they were willing to use the best ideas no matter where they came from.
The self-awareness of the limits existing within a company were neatly expressed by a CEO who, when talking to his staff, said, “The smartest people in the world are not working for us.” The implication being that if you want smart, look beyond the limits implied by the company’s legal and operational boundaries and the intellect it contains. To innovate at home, look elsewhere. (Open innovation, anyone?)
Certain incompetence
One of the painful things about our time is that those who feel certainty are stupid, and those with any imagination and understanding are filled with doubt and indecision.
- Bertrand Russell
Perhaps the most brutal self-deception that undercuts our ability to innovate both at an individual and collaborative level is represented in the Dunning-Kruger Effect. Justin Kruger and David Dunning proposed that, for a given skill, incompetent people will see themselves as heroes in their own story. They tend to overestimate their own level of skill while failing to recognize genuine skill in others. When faced with the extremity of their inadequacy, they also fail to recognize it, often explaining it away due to circumstances beyond their control.
There is relief from this delusion. If a person is able to recognize and acknowledge their own previous lack of skill, they can be trained to substantially improve, provided they have the will to address their shortcomings. This is hard work. Faced with this level of effort, is it any wonder that most people prefer to not change, instead continuing their certain incompetence by ignoring it altogether? At this point a passing reference to the Peter Principle might be warranted, but a trip down that path will only lead us to despair.
Don’t despair. Andy Grove popularized one approach to the vigilance necessary to maintain a posture of innovation-driven success. His book Only the Paranoid Survive offers a reminder of what it takes to be successful. To overcome self-satisfaction, and the over-estimation of our abilities, keep striving to be better, to improve, to transform. In the application of consistent efforts toward renewal, not only might you beat your averages, but you might find that innovation becomes the foundation for your enduring success.
How do you prevent yourself or your organization from becoming too self-satisfied?
Twitter: DrewCM
- Last few days in Australia before returning to the USA. Great trip.
- Greetings from Uluru / Ayers Rock! Where it is raining but the views and surroundings are spectacular. (And the internet access is spotty!)
- Better late than never: #innochat Transcript – 19 August – Innovation Backwards? With thanks to @CASUDI & @Renee_Hopkins http://ht.ly/2tOe3
- For those looking for #innochat transcript this weekend - it is coming - just a little slowly due to the time difference! (mine, that is)
- Thanks for #FF and RTs @innovatorsmix @MeghanMBiro @Jabaldaia @CreativeSage @FHInnovation @Renee_Hopkins @Gwen_Ishmael and #innochat gang