Thinking and doing

One of the central tenets of our Center for Entrepreneurship's programs is that bringing ideas to reality and to the broader market is about effectively combining thinking with doing. Joseph Schumpeter said it well:

To undertake such new things is difficult and constitutes a distinct economic function, first, because they lie outside the routine tasks which everybody understands and secondly, because the environment resists in many ways… This function does not essentially consist in either inventing anything or otherwise creating the conditions which the enterprise exploits. It consists in getting things done [italics added].

Obviously, there is a great deal of "thinking" involved with getting things done, but none of it counts for much without the "doing." Perhaps more importantly, it's not about how well you think before you do but rather how well you integrate the two very different activities so that they support and build on each other. A longer post on this is overdue, but suffice to say there is a need in higher education—and the MBA in particular—for a new focus on "getting things done."

Rick Reis's Tomorrow's Professor email newsletter shared this quote from, and link to, a very apropos essay on the need
for college education to embrace the art and science of doing—not just

"Analytical thinking is an incomplete educational agenda in part because it disconnects rationality from purpose, and academic understanding from practical understanding or judgment. In order to prepare for decision and action in the world, students need to develop not only facility with concepts and critical analysis but also judgment about real situations in all their particularity, ambiguity, uncertainty and complexity. They need to develop practical reasoning."

The essay appears in this month's Carnegie Perspectives, by Senior Scholars Anne Colby and William M. Sullivan write and is adapted from an article with the same title that appeared in the winter 2009 issue of Liberal Education, published by the Association of American Colleges and Universities. Both come from the Carnegie/Jossey-Bass book, A New Agenda for Higher Education: Shaping a Life of the Mind for Practice.

99 Nights

In the movie Cinema Paradiso, there is an allegory told which underpins
the movie.  It also applies, too well, to the process of innovation and

Once upon a time a king gave a feast and there were all the most beautiful princesses of the realm. Basta, one of the guards, saw the king's daughter: she was the loveliest of all! And he immediately fell in love with her. But what could a poor soldier do compared with a king's daughter?!…One day he managed to meet her and told her he couldn't live without her. The princess was so struck by the depth of his feeling that she said to the soldier 'If you will wait a hundred days and a hundred nights beneath my balcony, then in the end I'll be yours.' Christ, the soldier ran off there and waited! One day, two days, ten, twenty…Every night she looked out of her window, but he never budged. Come rain, wind, snow, never budged! The birds shat on him and the bees ate him alive! After ninety nights he was gaunt and pale and tears streamed from his eyes but he couldn't hold them back. He didn't even have the strength to sleep any more. The princess kept watch…And on the ninety-ninth night, the soldier got up, picked up his chair and left!

and towards the end of the film…

Now I understand why the soldier went away just before the end. That's right, just one more night and the princess would have been his. But she, also, could not have kept her promise. And…that would have been terrible, he would have died from it. So instead, for ninety-nine nights at least he had lived with the illusion that she was there waiting for him…

This story resonated with our experiences working
with innovators and entrepreneurs. Particularly following the recent
activities of our students, noted in this blog.

It's all too tempting for innovators and entrepreneurs to labor away on their
dream, all the while ignoring life's (or at least the market's)
realities. Students can imagine, in the safety of case studies and
management readings, that they are preparing themselves to become the
stuff of business legends. Garage tinkerers can sweat over their
lathes, or computers, and imagine how they will spend their
riches and write their memoirs. For these folks, however, there is no
99th night. They are the dreamers without a plan, the tinkerers who've
been at it for 10 years or
more, never taking the steps to turn their ideas into action. It's
safer to believe in the idea of the idea than to take the actions
necessary to find out if it can be turned into a reality.
not arguing against sacrifice–just against unnecessary sacrifice. For
the folks who want more than the dream, waiting until the 99th night to
ask the questions wastes precious time that could have been spent
finding the answers to move the idea forward or move on. If
you want to build a better mousetrap, what can you do on the
first night to make sure the world needs one? If the big uncertainty
lies in the
technology, what can you do, on the first night, to make sure it will
work? In our programs, we ask our students to
test their idea and its validity in the market by talking to customers
and trying to sell them their product. Asking the questions and finding
out early in the process whether a customer sees value in your
technology or product gives you the answers you need to move
forward–whether it means revamping your product to fit the customers'
pain or scrapping it altogether.
written recently about the need to take the right action in
launching new ideas and new companies–because actions ground entrepreneurs
in reality. Action grounds ideas in reality–by testing and improving
them. If you're right, great. If you're wrong, better to embrace that
reality on the 1st night, or even the 30th night, than the 99th.

tempting to sit on a bench and dream of a better world, but better
worlds don't come to those who are unwilling or afraid to put their dreams to the test. They come
to those who are willing to ask the questions and do the work.

*The story is one taken, with liberties, from the Noh play Kayoi
Komachi, which tells how Ono no Komachi finds herself the object of a
Guard Captain's ardent love. To prove his love, she
requested, he was to visit her house one hundred
successive nights before being admitted. For 99 nights, he faithfully
visited her, only to die of exposure from a
snowstorm the last night.  In both cases, the tragedy remains.

–with Nicole Starsinic

Creative efficiency or efficient creativity?

gusherIs the great paradox in managing innovation a red herring?

The paradox in managing innovation is the difficulty–if not impossibility–of simultaneously having an efficient organization and an innovative one.

Organizations must perform efficiently to survive and thrive in their current environment, but they must also retain the ability to adapt should the environment change. The tension is between adaptation and adaptability, between exploitation of current resources and opportunities and exploration for new ones.

A red herring is a device (literary, academic, or otherwise) that is “laid across the track” to divert or distract people from solving a problem directly. Like this definition.

Our obsession with the tension between the wild and crazy side of innovation and the button-downed nature of ongoing operations is distracting us from one of the more real problems in managing innovation.

A recent article on 3M describes the “struggle between efficiency and creativity” that is represented by their recent CEO succession. James McNerney came to 3M from GE, and brought with him Six Sigma, the efficiency program GE made a standard management practice in the 1990s. McNerney cut costs and improved margins:

The plan appeared to work: McNerney jolted 3M’s moribund stock back to life and won accolades for bringing discipline to an organization that had become unwieldy, erratic, and sluggish.

But, as the great tension would suggest, the plan came at a steep price:

At the company that has always prided itself on drawing at least one-third of sales from products released in the past five years, today that fraction has slipped to only one-quarter.

The author and a host of academics then lay bare the tension:

Those results are not coincidental. Efficiency programs such as Six Sigma are designed to identify problems in work processes—and then use rigorous measurement to reduce variation and eliminate defects. When these types of initiatives become ingrained in a company’s culture, as they did at 3M, creativity can easily get squelched.

The tension here is clearly between exploring for what you don’t know (the protagonist) and exploiting what you already know (the antagonist). Between color and light, and drab routine.

The terms exploitation and exploration harken back to the oil companies who used to have (and had to have) two separate divisions. One division was responsible for exploiting existing fields, in which productivity was measured in barrels/day and $/barrel, and improvements could be proposed and tested with relative confidence. The skills of exploiting were disciplined management, analysis, and the routinization of work.

But wells inevitably dry up and market demands grow, so oil companies also needed a division that continuously explored for new oil fields. The skills of exploring for oil were independence, risk taking, intuition, and an ability to live out of a suitcase.

This tension was immortalized in the organizational literature by James March, one of the founding fathers of the field, in a brief 1991 article entitled “Exploration and Exploitation in Organizational Learning.”

There are profound differences, however, between searching for oil and developing a firm’s next new products or strategies. One of the biggest differences is that, when oil is discovered, there is little doubt that it’s oil, that the organization is capable of exploiting it, and that it will contribute to the bottom line in some way at some time. This is more akin to discovering a warehouse of widgets just like the ones you’re already selling. Regardless of whether you drill 6 wells or 6,000, if one of them is a gusher nobody debates whether this will cannibalize existing markets, not work at all, distract from our current focus resources, etc…

I can’t recall a single innovative new product that was obviously and unambiguously valued in it early days by the organization. So there is more to innovation than simply exploring for new ideas.

What is missing is a very significant step that lies between innovation and operations (between exploration and exploitation): execution. At least, that’s what I would call it. It’s the process of converting an idea, even a prototype, into a set of resources, procedures, metrics, and marching orders that can enable an organization to effectively replicate, scale, and manage the new venture.

I move around in the worlds of design and innovation and have met a lot of wildly creative people. Having good ideas is actually pretty easy for them. I also work with a lot of smart people in operations, and knowing how to ferret out problems, reduce variability, and manage others to task comes pretty easily to them. The challenge is in how these people work together. Good ideas only help the company to the extent they can be routinized–exploiting the exploration.

The big challenge in managing innovation lies, I would suggest, not in building up two very strong skills in innovation and in operations, but rather in building the bridge between them–of developing the people and processes that facilitate the routinization of novelty. Of turning good ideas into practical processes that the larger organization can value, adopt, implement, and manage.

Forget 3M–think about Toyota. They are leaders in manufacturing efficiencies and also at exploring the new frontiers of innovation automobiles. How have they managed the tension? Read any number of books on them (but the original Machine that Changed the World remains the best read) and you find that they are extremely effective at recognizing those ideas that can be routinized and doing so before their competition. Sometimes decades before. Consider the Prius. Ford and GM had many of the same technologies lying around R&D, but having the ideas is not the same as converting them into manufacturing routines, processes, supply chains, and ultimately customers. That’s execution.

With the obsession between innovation and efficiency, the skills to execute–and the people who have them–are being largely ignored in modern corporations. And certainly ignored within business schools. Which is a shame.

Old-style innovation

I had a nice read this weekend of the California and National Energy Efficiency action plans (links here). An interesting question lurks beneath the surface of these two documents.

The approach to increasing energy efficiency these two documents reveal seems directed towards either (1) state and national regulations (building codes, appliance standards, etc…) or (2) utility-driven efficiency programs.

I agree with the power of the former–codes and regulations are responsible for much of California’s leadership in per-capita energy consumption, having held relatively constant since 1974 while the rest of the country has practically doubled.

But energy efficiency programs face a difficult challenge. The diffusion of energy efficiency practices aimed at changing behaviors (ie adopting new technologies or practices) are primarily marketing strategies born in the 1940s and 50s. These are the same approaches that brought hybrid corn seeds to farmers in the 1940s, tetracycline to doctors in the 1950s, axes to Amazonian indians in the 1960s, tractors in Thailand, etc.–textbook “diffusion of innovation” recommendations. Essentially, a larger, wiser organization decides what’s best and pursues the diffusion of these policies to rural populations. And we’re living with the consequences today.

What’s changed in the meantime is a much better understanding that not all emerging technologies are best understood, let alone supported, through this centrally-driven diffusion model–no matter how smart the change agents are (and these folks are smart…I’ve met many of them). There are a great deal more grass-roots and entrepreneurial opportunities to promote innovation than fit within the traditional diffusion model.

In pursuing the broader penetration of energy efficient technologies into the market, some of these findings from the innovation literature come to mind:

1.Technologies evolve in use. This means early adopters get the first solutions, not the best ones…and sometimes this kills the potential for growth. Think how pushing early solar water heating, with it leaking plastic pipes, set the technology back decades. Pushing a technology before its time can do more harm than good.

2. The best technologies are not readily identifiable by single actors–even when those actors have lots of experience. If venture capitalists fail 9 times out of 10, what makes a utility or government bureaucrat (who allocates millions towards emerging technologies) any better at picking winners? Letting the market find and reward the right products and services may seem slower and less efficient, but don’t forget the tortoise and the hare.

3. Technologies live or die by their integration within (local) economic and political systems. This means supporting technological initiatives without supporting their local integration is like throwing seeds on a parking lot and expecting them to grow.

4. Successful ventures depend more on the team than the technology. For those technologies that need to be self-sustaining as business ventures (and most do), the team has more to do with the success than the original technical vision or market plans.

Simply put, any system that focuses too much on “technology” in the abstract and not on the particular details of any one implementation (from the technical details to the market to the team behind it) will most likely fail.