Bringing Innovation to Innovation
December 2007 / January 2008
Volume 5 Number 6
Excerpted from Innovation Nation by John Kao. Copyright © 2007 by John Kao. Reprinted by permission of Free Press, a Division of Simon & Schuster, Inc.
Do something. Do something to that, and then do something to that. Pretty soon you've got something.
—€”Jasper Johns, painter
Not long ago, while prepping to deliver a speech at Google headquarters in California, I decided to eat the company's cooking and Google the word "innovation." Though I expected to see a lot of hits, I had no idea just how popular the word would be in the Googly universe of "all the world's information at your fingertips." Wham, the search came back—€”330 million references to innovation.
Those of you who, like me, constantly scan the new arrivals in the business section at your local bookseller may be aware of a similar phenomenon.
Innovation—€”or at least the notion of innovation—€”is hot. The titles tell the story: Open Innovation, The Art of Innovation, Fast Innovation, Customer-Driven Innovation, The Innovator's Dilemma, The Innovator's Solution, Dynamics of Innovation, Seeds of Innovation, and so on.
I'm not exaggerating when I say that the biggest obstacle to developing a national innovation agenda is not how many Ph.Ds or how much venture capital or how much wireless capacity we have. Rather, it's our level of knowledge about innovation that counts. And the ways we currently define it do not, for the most part, fit new global realities. Neither comprehensive nor specific enough, the plethora of definitions actually masks an underlying lack of consensus. In short, we know everything and nothing about innovation.
I know firsthand that there is confusion about innovation because I constantly receive calls from people—€”some quite nervous at first—€”who identify themselves as some version of a new "innovation process owner," meaning they are in charge, somehow, of innovation in their organization. My first question is typically, "What do you mean by innovation?" The variety of responses I've received over the years would fill a very long list, but it would be as short in internal consistency as it is abundant in quantity.
I believe we are in what might be called a pre-Copernican period with regard to innovation. It's as if we don't yet know which heavenly bodies revolve around which others. We don't even know where all the planets are located, nor do we have a viable theory of planetary motion. We rely on metaphors and images to express an as yet imprecise and unsystematic understanding.
Little wonder that one of the first tasks I set in my teaching days was to ask my students to define innovation, prompting more than a few of them to mutter under their breaths about "semantic hell." No matter. The importance of being as clear as possible about the journey on which you are embarking, whether as an inventor in your garage or a scientist in a federally funded lab, can scarcely be overstated. Your understanding shapes, in turn, how you measure innovation and what you decide to do about it. If innovation is equated with intellectual capital, you'll count patents; if it's an educated workforce, you'll count Ph.Ds; if it's infrastructure, you'll count broadband networks and bits per second; if it's culture, you'll count pieces of public art and symphony orchestras.
Many of us assume that the tools and methods of innovation are mature, simply waiting to be deployed. The truth is otherwise; we have few if any mature standards for how to practice innovation and measure the effectiveness of our efforts, let alone for how to train people to become master practitioners.
Probably, the most widely shared misconception about innovation is that it's all about science and high tech. The rise of microlending, one of the most powerful innovations in recent years, shatters that notion. Economist Muhammad Yunus came up with the idea of microcredit in 1974, after giving a woman in the village of Jobra, Bangladesh, $27 from his own pocket to help her make bamboo furniture. Previously, women in a village like Jobra either had no access to capital or they had to pay usurious rates to local loan sharks. Realizing that poor women were actually excellent credit risks and that giving them small loans could transform an entire local economy, Yunus formed Grameen Bank in 1976 to institutionalize what he called microcredit. The bank has now loaned more than $6 billion to more than 7 million borrowers, and Yunus took home a Nobel Peace Prize in 2006 in recognition of his innovative efforts. Microlending is not the only social innovation of recent years. We can also cite the advent of impartial consumer testing of products, carpool lanes on busy highways, carbon-offset schemes and a thousand other examples.
We're in the early stages of one of these transformations now that has been enabled by internet-related technology. It is also easy to agree with analysts who reckon this century will see explosions of innovation, thanks especially to the revolutions in life sciences, nanotechnology and clean technology. The point is not that technology isn't crucial—€”it is—€”but that we must think more broadly.
My own definition of innovation is both integrative and aspirational. I define it as the ability of individuals, companies and entire nations to continuously create their desired future. Innovation depends on harvesting knowledge from a range of disciplines besides science and technology, among them design, social science and the arts. And it is exemplified by more than just products; services, experiences and processes can be innovative as well. The work of entrepreneurs, scientists and software geeks alike contributes to innovation. It is also about the middlemen who know how to realize value from ideas. Innovation flows from shifts in mind-set that can generate new business models, recognize new opportunities and weave innovations throughout the fabric of society. It is about new ways of doing and seeing things as much as it is about the breakthrough idea.
Seen in this way, innovation is always in a state of evolution, with the nature of its practice evolving along with our ideas about the desired future. That is why innovation has meant different things at different periods in our nation's history, a state of flux that has made it difficult to fashion a consensus around any one meaning of innovation itself.
Version 1.0 of our national innovation capability, for instance, featured individual visionary inventors. Central casting gave us Benjamin Franklin and his kite, what we might call the artisanal model of innovation.
Geniuses in their workshops and garages, men like Thomas Edison and Henry Ford, later came up with inventions that inspired large-scale enterprises, ushering in version 2.0—€”the industrial model of innovation. Business requirements gave rise to mammoth, centralized corporate research groups that reached their zenith in such venerable institutions as Bell Labs, HP Labs, and the Xerox Palo Alto Research Center (PARC).
In the public sector, the move to large-scale, organized innovation was expressed by the creation of the National Science Foundation, the National Institutes of Health, and other centralized edifices of government that provided national funding and administrative functions.
Version 3.0 deinstitutionalized innovation and featured the innovator-entrepreneur, financed by venture capital and devoted to the "just-in-time" organization. In this world, while corporate giant Xerox developed the graphical user interface, upstart Apple Computer commercialized it.
Version 4.0, where we are today, is fast evolving—€”in beta, as techies are fond of saying. Many of the most important contributors to the process, however, reside outside the United States. Indeed, 4.0 is fundamentally about adapting to new innovation business models that may originate anywhere. It is driven by a global diffusion of innovation capability that has ended America's monopoly. For China, the key innovation model today may be a kind of brute force that comes from increasingly sophisticated massed minds working together. For Singapore, it is competitive specialization—€”for now in biotech, digital media, and environmental technology—€”as its vehicle to ride the rising tides of globalization. For India, it is building on the booming outsourcing industry.
And oil-rich nations have a time-limited opportunity to buy into the game.
Countries everywhere are seeking their own sources of comparative advantage in the innovation landscape. And the logic of self-interest is clear. Robert Solow won the Nobel Prize in economics for, among other things, demonstrating that as much as 80 percent of GDP growth comes through the introduction of new technologies
So innovation pays. As we struggle to get a fix on the ways in which our innovation processes must evolve in this rapidly globalizing world, experts are eager to step forward with a plethora of new ideas about the latest and greatest keys to innovation: S-curves, chasm crossing, customer-driven innovation, anthropological and design-driven approaches and taxonomies of roles in the innovation process. Each concept has its merits, but one of my favorites was put forth by Clayton M. Christensen, a Harvard Business School professor, in his 1997 book, The Innovator's Dilemma. Christensen made a vital distinction between innovation that simply improves what is and innovation that defines what could be.
There's nothing wrong with incremental innovation. In fact, it's essential for ordinary progress: Semiconductors get faster every year; medications become more effective; cars become more stylish and, is hoped, more fuel efficient; government makes itself more efficient (or not).
Game-changing innovation, however, requires one to assume a far higher level of risk. You really don't know how things are going to turn out, so all those linear, predictive models just don't apply. Let's launch a personal music device called a Walkman, or let's transform the computer industry by making computers personal, or let's make it possible for people to sell their stuff online. The mastery of disruptive innovation on a national scale is required to revitalize America's innovation capability.
By adopting this innovative approach to innovation, I believe the United States can step up to a revitalized national idea. What would it be like as a nation to be able to continuously innovate in service of ambitious, compelling, world-changing goals? We are not speaking of the pedestrian innovation described in business textbooks—€”a way to maximize return on investment, prime the product pipeline or squeeze a little more performance out of R & D. No, I envision a concentrated application of our vast resources to innovate on a huge scale for human benefit. In short, I want America to be in the wicked problems business.
Various pundits have proposed a global priority list of wicked problems, including climate change, environmental degradation, communicable diseases, education, water quality, poverty, population migration and energy sufficiency.
Such wicked problems also hold the keys to making the most consequential breakthroughs of the twenty-first century. They interest me because they become opportunities when flipped on their heads. Innovation applied to a wicked problem can realize an enormous amount of social and economic value by setting new commercial standards, creating new businesses, and generating new sources of value. For a country that aspires to become an Innovation Nation, the search for opportunities to do good and still do well will allow it to exercise its innovation muscle.
There's nothing simple about a wicked problem. In fact, just working on it may change its nature or make other wicked problems even worse. Finding an economical way to extract oil from shale, for instance, might reduce America's energy dependency and power the world for another century—€”but at the cost of new eruptions of greenhouse gases and potentially faster climate change. It's not even possible to say for sure that a wicked problem has been solved. How can we know for certain that we've won the so-called global war on terrorism or achieved a satisfactory level of health in society?
The energy agenda is emerging as a key wicked problem of this generation. We may not be able to say why certain forms of energy are "alternative" or certain technologies "clean." But that has not stopped the challenge from rising to the top of the pile, as seen in calls for an agency modeled along the lines of the Defense Advanced Research Projects Agency (DARPA) and the rise of venture capital investment in green technologies. The bellwether New York Times columnist Thomas Friedman has even gone so far as to call green the "new red, white, and blue," redefining environmentalism in terms of patriotic self-interest. If our national energies are redirected toward green and clean technology, the logic goes, our global image will be overhauled, our economy will get an enormous boost, and the planet will get a critically needed clean-up.
However, global civil society has difficulty getting traction on such wicked problems because it lacks the wherewithal to bring together the diverse group of stakeholders from various disciplines that is needed to forge even a partial solution. To have a chance of success, we will need new approaches that blend facilitation and collaboration processes, new kinds of places, technology, tools, knowledge management practices and more into a different way of working.
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