The NOSE

The Key to Innovation: Overcoming Resistance (Continued)

In an email Michael Schrage took me to task for my critique of his recent article ("The Key to Innovation: Overcoming Resistance") in CIO Magazine. Michael provided the following elaboration:

"Because the thrust of my column is that many - if not most - firms try to overcome resistance NOT
by identifying its sources and managing them BUT by coming up with YET ANOTHER IDEA to overcome 
that resistance...

In other words, autocratic/totalitarian firms notwithstanding, there is a bias to invest 
more thought in coming up with 'better' ideas than with implementing 'tactics' and 'methodologies' 
to identify and overcome resistance..."

Point well taken. Schrage's point is about the balance of investments and the prevailing tendency in firms to over-invest in new ideas instead of implementations. But Schrage's deeper point, I believe, is about the importance of understanding organizational cultures as a key dimension in driving and managing innovation.

In re-reading the article, I realized that Schrage also provides a very  useful heuristic for understanding the innovation culture in a firm: "Grasping the essence of an innovation culture is astonishingly easy. Simply fill in the blank. Whenever a good idea is proposed, you'll find the core values of an innovation culture in the words that follow this common phrase: "We can't do that because..."

Granting Schrage's point, the question still remains (and was the basis of my original post) whether there is a difference in the innovation culture of a firm intent on chasing disruptive innovation as well as sustained innovation. Also, is there an inherent tension between the two?

Will 2006 be the year of Microsoft?

Check out this interview with Brad Feld, published in the Milestone Group in their quarterly newsletter. Some of the questions posed:

• Am I long or short on Google?
• Will 2006 be the year of Microsoft?
• Will the software industry become commoditized?
• What will the Internet deliver in the next five years?
• How can startups find things that the big players won’t compete on?
• What advice would you give an entrepreneur starting a company today?
• What competitive venture fund would you invest $10 million in?
• What’s the most unique deal you’ve been pitched in the last six months?

The Key to Innovation: Overcoming Resistance

Michael Schrage--- a researcher at MIT's Media Lab, author of Serious Play, and IT consultant --- is often asked by CIOs: "My IT group---our company---needs to become much more innovative. How can we do it? How should we do it? Help."

In the latest edition of CIO magazine (The Key to Innovation: Overcoming Resistance) Schrage provides his answer, noting that the key to innovation is not good ideas but good implementations. "Experience teaches that aspiring IT innovators don't need better ideas that make more sense. They need better implementations that make—or save—more money. If organizations can boost their 'return on innovation' by investing more in good implementations than in good ideas, then that's where their capital should go."

Schrage goes on to suggest that the solution to the "innovation challenge" lies in overcoming cultural and organization resistance: "Resistance, not ideas, is the most powerful lens for viewing innovation behavior."

Schrage reminds us that good implementations matter, but I wonder if his advice is not hackneyed. Suppose I were to say: "Don't worry about strategy, focus on execution." Is the either/or really all that useful, particularly for senior managers?

Moreover, Schrage begs the question of which "good ideas" in a firm are worthy of implementation in the first place. The analogy  with scientific investigation is useful. Good scientists typically work within the boundaries of an existing framework or paradigm of explanation.  Great scientists by contrast have a knack for generating a plethora of hypotheses and then the follow-up ability to select the most promising one among them. C.S. Peirce, the great American philosopher of science, described this process as abduction.

But for argument's sake, let's grant Schrage that we know which good idea is worthy and we just need to focus on implementation. Schrage overlooks another important point about innovation, one emphasized recently by Clayton Christensen and others.

In the Innovators Dilemma and the Innovators Solution, Christensen distinguishes betwen sustaining and disruptive innovations, based on the circumstances of innovation. In sustaining circumstances the goal of innovation is to make better products that are sold for more money to attractive customers. In disruptive circumstances a new, simpler, less-costly product is commercialized which appeals to an un-attractive (from the point of view of incumbents) market segment or customer.

With this distinction in mind we can see that Schrage does not provide an answer to the CIO who is worried about stimulating a culture that leads to disruptive innovations. As Christensen has pointed out "middle managers who want a reputation for delivering results will be inclined to promote only those new-growth ideas that will pay off within the time that they reside in that particular job....The problem for growth-seeking managers, of course, is that the exciting growth markets of tomorrow are small today."

Schrage's point is that culture and overcoming resistance are important in realizing innovation. Of course. Christensen's counter point is that in the case of disruptive innovations the cultural and organizational barrier, particularly in incumbent firms, might be almost insurmountable. Why? Because the incentives and organizational culture that reward sustaining innovations can be, and often are, contrary to those that lead to disruptive innovations.

 

Microsoft and Open Source Working Together

Microsoft announced plans to enter the lucrative $13 billion-a-year market for business intelligence software. Alongside the rash of open source BI plays recently, this is welcome news for consumers. Microsoft and Open Source are working together (albeit through the market's invisible hand) to create bottom up pressure on Hyperion, MicroStrategy, Business Objects, Cognos, SAS and others. Who said Microsoft and Open Source can't get along?

As a side note, the battle between Microsoft Office and Open Office will eventually take shape as a platform battle. Compare Internet Explorer with Firefox. IE is monolothic and closed. Firefox is agile and open, in the sense of allowing third parties to add extensions on the fly. The more Microsoft allows third party plug-ins and extensions (not just its own) to Office, the more likely it will be able to maintain its market dominance.

The Amorality of Web 2.0

Nicholas Carr, the author of Does IT Matter, has posted a provocative piece on his blog called "The Amorality of Web 2.0". I don't agree entirely with him (e.g. his interpretation of the significance of Wikipedia) but once again he is asking some of the right questions as we all begin to get carried away with Web 2.0. Carr is a welcome contrarian voice in the blogosphere:

"And so all the things that Web 2.0 represents - participation, collectivism, virtual communities, amateurism - become unarguably good things, things to be nurtured and applauded, emblems of progress toward a more enlightened state. But is it really so? Is there a counterargument to be made? Might, on balance, the practical effect of Web 2.0 on society and culture be bad, not good? To see Web 2.0 as a moral force is to turn a deaf ear to such questions."