the study of innovation – a mythic quest

The Study of Innovation – A The Study of Innovation – A Mythic Quest Mythic Quest

Liisa VLiisa Väälikangaslikangas

Director of ResearchDirector of Research

Strategos InstituteStrategos Institute

Berkeley-Finland Day, October 18, 2002Berkeley-Finland Day, October 18, 2002

Strategos® Proprietary and Confidential

The Quest (1): Escaping the The Quest (1): Escaping the coldcold


The Quest (2): The Quest (2): Fighting the windmillsFighting the windmills

Cervantes: Don Quixote


The Quest (3): Making moneyThe Quest (3): Making money

Why did Sancho Panza follow Don Why did Sancho Panza follow Don Quixote?Quixote?Don

Sancho

Adventure


The Quest (4): The Quest (4): Orbiting the giant hairballOrbiting the giant hairball

Gordon McKenzie


What I will talk about:What I will talk about:

• Myths related to innovation as Myths related to innovation as management practicemanagement practice

• Quests related to research on Quests related to research on innovationinnovation


Myths of Management Myths of Management PracticePractice

1.1. The case for innovation can be made The case for innovation can be made financially and financially and a priori.a priori.

2.2. There is a “clean” solution (a process or There is a “clean” solution (a process or a structure) to the problem of a structure) to the problem of innovation.innovation.

3.3. You get what you pay for, including You get what you pay for, including innovation.innovation.

4.4. There is a (qualitative, manageable) There is a (qualitative, manageable) difference between winners and losers.difference between winners and losers.

5.5. Failure disqualifies an innovation.Failure disqualifies an innovation.


Myth 1. The case for Myth 1. The case for innovationinnovation

Q: “We are thinking about making our Q: “We are thinking about making our company more innovative. Can you tell company more innovative. Can you tell us, however, how we can measure the us, however, how we can measure the value innovation creates?”value innovation creates?”

A: “Happy to do that. Can you tell me first, A: “Happy to do that. Can you tell me first, please, how you currently measure the please, how you currently measure the value your HR, legal department, and top value your HR, legal department, and top management creates annually?”management creates annually?”

(They don’t call back.)(They don’t call back.)


Myth 2. There is a “clean” Myth 2. There is a “clean” solutionsolution

Staffmember(s)submit anidea as aproposal.

Does initialGC screeningpanel accept

proposal?

Does extendedGC panel

acceptproposal?

Proposal isrejected.

Test and Mature Phase:Project team addresses

issues raised byscreening panel.

Project isabandoned

Proposal isrejected.

Does projectpass through

tollgatemeeting?

Does projectpass through

tollgatemeeting?

Action Lab(s)

Project isabandoned

Does businessunit want to

commercializeproject?

Project remainsuncommercialized

Project transfersto business unit.

Yes Yes Yes Yes Yes

NoNoNoNoNo

Maybe


Myth 3. Pay for innovationMyth 3. Pay for innovation

• ““If you put too much emphasis on If you put too much emphasis on financial rewards, greed takes over.” Leo financial rewards, greed takes over.” Leo Roothardt, Shell GameChangerRoothardt, Shell GameChanger

• ““People engage in radical innovation not People engage in radical innovation not because they get paid for it, but because because they get paid for it, but because they want to.” Gene Meieran, Intel Fellowthey want to.” Gene Meieran, Intel Fellow

How do you pin the shadow of the future How do you pin the shadow of the future on the Invisible Hand?on the Invisible Hand?


Myth 4. You can tell a winner Myth 4. You can tell a winner by looking at itby looking at it

The Null Hypotheses:The Null Hypotheses:

““Tim Draper is wrong in 99.99% of Tim Draper is wrong in 99.99% of cases but when he is right, he is cases but when he is right, he is reallyreally right.”right.”

The difference between innovative and The difference between innovative and not-so-innovative people is that the not-so-innovative people is that the successful ones try more often.successful ones try more often.


Myth 5. Failure (yes, there Myth 5. Failure (yes, there are some bad ideas)are some bad ideas)


Myths in Innovation Research Myths in Innovation Research

1.1. Researchers and practitioners Researchers and practitioners have interests in common.have interests in common.

2.2. Describing corporate realities is Describing corporate realities is straightforward.straightforward.

3.3. We have a theory of organizational We have a theory of organizational value creation.value creation.


Quest 1. Rigor and practiceQuest 1. Rigor and practice

We know a lot more about what We know a lot more about what managers ought to do than what managers ought to do than what they are actually doing.they are actually doing.


Researcher and Practitioner Researcher and Practitioner ArticlesArticles

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Leadership

Innovatio

n

Human re

sourc

es

Network

s

Organizatio

nal desig

n

Knowledge/le

arnin

g/boundarie

s

Percentage Emphasis Among

Seven Most Frequent Topics

c Harvard Business Review

Administrative Science Quarterly

Survey of Two Management Journals

(November 2000 to October 2002)


And the answer always is….And the answer always is….

Thinking out-of-the-boxThinking out-of-the-box

A long-term viewA long-term viewTrustTrust

Motivation (and commitment)Motivation (and commitment)A license to fail smallA license to fail small

An external (customer) focusAn external (customer) focus

CourageCourage Time Time LeadershipLeadershipA common visionA common vision


Quest 2. Whose reality?Quest 2. Whose reality?

A professor?

A manager?

A PhD student?

A journalist?A best-selling

author?A consultant?

An employee?

A case writer?


Warning: An advertisementWarning: An advertisement

Strategos Institute is building a Strategos Institute is building a professional research organization that professional research organization that studies management-as-is yet seeks to studies management-as-is yet seeks to contribute to its further development. In contribute to its further development. In our view: our view: • Organizations would benefit from Organizations would benefit from

management practice that is more management practice that is more innovation-friendly.innovation-friendly.

• Management research would benefit from Management research would benefit from studies that are less institutionally indebt. studies that are less institutionally indebt.


Quest 3. How do Quest 3. How do organizations create value?organizations create value?

• By exploiting labor By exploiting labor • By getting a discount (By getting a discount (Save 30%!Save 30%!) relative to ) relative to

a market transaction a market transaction • By specializing, coordinating, and taking risks By specializing, coordinating, and taking risks

over time over time • By sustaining institutions and social By sustaining institutions and social

structures that make life and work structures that make life and work (sometimes) meaningful(sometimes) meaningful

• By sustaining complex relationships and By sustaining complex relationships and investments over time so that innovation can investments over time so that innovation can maturemature


Innovation is not enough: Innovation is not enough: The challenge of renewal The challenge of renewal

Innovation as experimentation is Innovation as experimentation is relatively well understood. relatively well understood.

Connecting innovations to core Connecting innovations to core business competencies, assets, and business competencies, assets, and infrastructure is not well understood infrastructure is not well understood (within the existing organizational (within the existing organizational context).context).


Call for Innovation ResearchCall for Innovation Research

Need research that is:Need research that is:1.1. Rooted in management capabilityRooted in management capability

2.2. Seeking to advance management practiceSeeking to advance management practice

3.3. Theoretically informed, conceptually Theoretically informed, conceptually enlightenedenlightened

4.4. Empathetic to the practitionerEmpathetic to the practitioner

5.5. Addresses the continuous negotiation Addresses the continuous negotiation between change and continuity in a firmbetween change and continuity in a firm

6.6. Adds to our understanding of how firms Adds to our understanding of how firms create valuecreate value


Contact information:Contact information:Dr. Liisa VDr. Liisa Väälikangaslikangas

Director of ResearchDirector of Research

The Strategos InstituteThe Strategos Institute

[email protected]@strategos.com

1 650 233 1100 ext. 239 (or 1 650 851 1 650 233 1100 ext. 239 (or 1 650 851 2095) 2095)

the study of innovation – a mythic quest

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