‘No man is an island….’ – networking matters!
In his day job as Dean of St Pauls cathedral in 17th century London John Donne would have been well aware of the world of innovation – turning ideas into value Just around the corner he’d have been able to walk into one or other of the many coffee shops springing up in the capital – perhaps Jonathan’s in Change Alley or Edward Lloyds on Tower Street. And there he’d find entrepreneurs busy exchanging ideas, creating new ventures, pitching new projects – a hub of noisy conversation, a smell of coffee in the air, smoke getting in everyone’s eyes. Crowded, noisy, above all interactive – this was not a quiet library where lone scholars pored over their books and made careful notes. It was a place where connections mattered, unexpected collisions, developing relationships – what we’d recognise today as a network model.
So it’s not surprising that one of his most famous poems begins with the powerful reminder that :
‘No man is an island, entire of itself, Every man is a piece of the continent, a part of the main …….’
Human beings are social creatures and their creative history is steeped in the networking tradition. Innovation is not a solo act, it’s a multi-player game.
Fast forward to today’s context and we get that message – the story of ‘open innovation’ has been playing out for the past twenty years as organizations learn to re-orientate their innovation models along these lines. In a world overflowing with knowledge even the largest organization has to recognise that, in Bill Joy’s immortal words, ‘not all the smart guys work for us’. So the game has shifted to one where knowledge flows and knowledge dynamics dominate our thinking.
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Of course, if all the smart guys don’t work for us then we’re going to need the skills and processes to make sure that what they know somehow finds its way into our organization. And that we make effective use of it. We need ‘‘the ability …. to recognize the value of new, external information, assimilate it, and apply it to commercial ends’.
Fortunately we have a label of this set of skills thanks to two researchers, Wesley Cohen and Daniel Levinthal, who talked about in a very influential paper back in 1990. They termed it ‘absorptive capacity’ and their analysis suggested that it’s not a simple matter of going shopping for knowledge. You have to know stuff before you can make sense of new stuff – and that means you need to build your own capacity for creating and using knowledge. Their research found a clear correlation between the level of R&D a firm already did and its ‘absorptive capacity ‘ – its ability to find and use new knowledge.
AC gives us a neat label for the capabilities that we need – but what do we actually do about it? One valuable contribution to answering this ‘what do I do on Monday morning?’ question came from another couple of researchers, Shaker Zahra and Gerry George who suggested that AC wasn’t a single thing but actually a series of linked behaviours. Whilst there might be great potential in new knowledge out there, realising it would depend on pulling off four key tricks – acquisition, assimilation, transformation and exploitation.
The first two were about the potential – finding and getting new knowledge into the organization – and the second two were about actually realising that potential, using the new knowledge to create value. Their work triggered a surge in research around the AC topic and how it played out in different circumstances. And its main lesson bring us right back to the connected world familiar to John Donne – the need for us to see innovation as a social process.
Rather than simply being something mechanical, a kind of data processing activity carried out by a machine with four key programs the real process of finding and using new knowledge is about warm-blooded human beings operating in particular ways. Social processes matter – knowledge doesn’t simply flow from A to B but is more of a ‘spaghetti’ process, weaving different strands together. It flows through people and across networks – and this model has some important implications for how we approach managing AC.
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For example acquisition depends on knowing or recognising what you’re looking for. And that works fine for incremental innovation – essentially you are concentrating on getting the best deal on bringing in something you already know about. But it’s not so easy when you are in that fuzzy ambiguous world, groping in the dark and not entirely clear what you’re looking for. This ‘fuzzy front end’ of innovation is a difficult space and exploring it requires very different approaches and skills.
One approach is to make use of ‘scouts’, sending out explorers to identify and bring back knowledge, which might be useful to the organization. It’s easy enough when you are watching players whose skills are already visible but the fuzzy front end means that you might find yourself talent spotting when you don’t even know the game they might be playing in the future! Think about the way an industry like automobiles has shifted in the past ten years. It’s moved from a predictable space in which major players had clear innovation strategies to one in which the whole world of mobility is changing. No-one knows what the outcome will be and so everyone is trying to explore the fuzzy front end. In terms of innovation dynamics we’ve moved into a ‘fluid phase’ where anything and everything becomes possible.
Not for nothing are the major players all concentrating on building a footprint in Silicon Valley. But they’re doing so mainly to be close to the equivalent of our 17th century coffee shops – to try and be in the right place at an interesting time, hoping for connections. (Those coffee houses, by the way, are still around today and very much centrepieces of innovation – Jonathan’s became the London Stock Exchange while Lloyds grew into one of the world’s most important players in shipping ventures and insurance).
They provide the arenas in which a new game is being played, where the old logic of building strong strategic alliances and collaborations is being replaced by a series of what might be called ‘dalliances’ . Such short –term encounters may or may not lead somewhere interesting – but you’ll never know unless you play along.
Or take one of the problems with assimilation – how the incoming knowledge is received by members of the organization. Once again when we are dealing with incremental innovation there is a big value in the knowledge ‘architecture’ which we already have – people understand the connections between what they know and the new knowledge elements and can work with them. Like being experienced shipwrights with a long history of building sailing ships they are able to work with new materials and adapt their design to interesting new ideas. As long as it’s a sailing ship.
But change the architecture – for example, by introducing the radically different idea of a steamship built of iron – and the risk is that your knowledge architecture becomes a prison. You can’t see beyond the bars, can’t expose yourself to new ideas. As researchers Rebecca Henderson and Kim Clark showed, organisational mind-sets like this are part of the ‘not invented here’ problem and a powerful brake on acquiring and assimilating new and radical knowledge from outside.
What the organization needs under these conditions is diversity and the ability to tolerate such challengers in their ranks. The trouble is that this sets up a conflict – an ‘us and them’ world in which the newcomers may find their ability to influence the rest of the organization seriously limited. It’s why start-ups often succeed – they are free to create new architectures without this conflict. And why the preferred strategy of many large businesses is to try and buy them up and absorb their knowledge. The trouble is that the problem of assimilation of new knowledge architectures doesn’t magically disappear!
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It’s not all bad news – much of the work on AC has highlighted ways to enhance our capacity to find, assimilate and deploy new knowledge. In particular there are many ‘social integration mechanisms’ which can work with this idea of knowledge as a social process. For example a key player in our theories about knowledge flows is the ‘boundary spanner’ – the ‘gatekeeper’, the ‘broker’, the person or group who can bridge between different knowledge worlds and enable new connections to be made. Andrew Hargadon writes a lot about this, pointing out that this boundary spanning is not a new idea – successful innovators like Thomas Edison were early and successful proponents of the model. And Tom Allen’s pioneering studies of the US space programme in the 1970s showed again the key role played by such individuals (he gave us the term ‘technological gatekeeper’) and by informal social processes as ways of bridging new and existing knowledge. Not a big leap further back in time to our London coffee shops and the noisy interactions going on there.
With today’s technology comes a new set of potential tools to facilitate and enhance AC. Collaboration platforms increasingly make use of social networking tools, enabling us to build communities. We can share ideas and comments across organizations and open up the possibility for virtual coffee-shop style interaction even when the participants are far apart physically or working in different functional areas. And we can open up the conversation to a much wider and diverse group of people outside the organization – crowdsourcing not only increased volume of ideas but also very different perspectives.
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Current thinking about AC suggests three sets of mechanisms which can help us – socialisation, co-ordination and system building. Socialisation essentially picks up many of the above themes – how people form and work within networks. Strong ties help us build trust and share knowledge efficiently – very helpful when the task involves incremental ‘doing what we do better’ innovation. But we may need to look for parallel arrangements, working with weak ties and fuzzy front end strategies to deal with more radical innovation.
Co-ordination essentially looks at how we build bridges across knowledge boundaries – and there is a long tradition of structural and operational mechanisms for doing this. Back in 1967 Paul Lawrence and Jay Lorsch conducted valuable research showing that innovation performance was strongly correlated with the integration mechanisms organizations put in place to deal with this kind of challenge – and their results have been consistently replicated. Whether it is cross-functional teams, inter-department secondment, matrix organizations or simply holding scrum sessions with everyone involved, innovation projects benefit from bringing different players and their knowledge sets together.
Anyone might get lucky once but innovation is all about repeating the trick. And to do so we set up structures and systems – essentially vehicles which help us with the behaviours we need to be repeating in order to innovate. ‘Routines’ of this kind establish patterns of organizational action – they are ‘the way we do things around here’ and they can help provide a focus for AC. But, as we’ve seen, while we might have powerful routines for AC to support incremental innovation we may also need to experiment with new ones to enable more radical changes where the ‘cognitive distance’ – the gap between our knowledge world and the new one – is wide.
So perhaps the big task facing innovation managers today is one of construction – given that ‘no man is an island’ how best can we build supporting structures to enable us to be a more effective ‘part of the main’?
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