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Closing The Innovation Gap

October 12, 2008

I spent Saturday lunch at Via Vite on Fountain Square with a group of regional entrepreneurs in a forum where Judy Estrin discussed with us her book, Closing The Innovation Gap. Her’s is a seminal work discussing how our economic engine developed from innovation to the point where we measure progress with quarterly reporting and even more frequent guidance on the numbers. The unfortunate result is that room for true innovation in the corporate world no longer exists.

Judy’s premise of taking the long view is good. Still, I had difficulty digesting whether or not we, in an American business culture, could actually change our ways and allow an ecosystem of innovation to develop again. It took us 40 years to dismantle it. I can’t see us rebuilding it overnight. If we hope to continue to compete in the global economy, we’ll have to start.

Innovation matters. We can’t compete without it. Our corporate drive forward needs to find ways to incorporate ongoing change and innovation into our lives. Many times the foundations of these two ideas clash, and innovation is set aside due to the pressure for corporate profits now. Then it becomes clear that innovation doesn’t just happen. It can’t be mandated. It can’t be scheduled. Innovation requires the right environment.

After WWI, America’s business environment thrived on a foundation of research and innovation. In the ’70s companies stopped investing in research and focused on efficiency and production. There could be no room for surprises. Every input and output had to be measured. In the’80s and ’90s greed took over. And with the bursting of the internet bubble and 9/11 in 2001, business’ appetite for risk was undermined. So we find ourselves today in a business environment not conducive to innovation.

But it’s more than just the business “environment”. Estrin suggests that progress requires creating an ecosystem where innovation can thrive, an ecosystem where research communities, development communities, and application communities can find the right balance to sustain life. Balancing calls for leadership, funding, education, policy, and culture. Of these, leadership and culture are most important. The right leadership develops funding, education, and policy. The right culture allows for both top-down and bottom-up growth.

This ecosystem balances itself and thrives on the basis of 5 core values.

  1. Questioning – the ability to question from a perspective of curiosity, but moreso from a perspective of self-assessment. Be the critical optimist performing constant self-assessment in order to feed more data back into the process.
  2. Risk – the willingness to fail. Attitudes towards failure must change to support a culture of failing often and failing early. Embrace failure and allow the experiences to continue to funnel more data back into the process.
  3. Openness – Imagine together. Collaborate. Share the failures and their lessons. Continue to take in new data.
  4. Patience – For the researcher, patience is tenacity. For the business, patience is letting something develop rather than asking, “Is it done now? How about now? Okay, well when do you think?”
  5. And finally, Trust

Most companies construct disincentives to innovate all over the place. There is no room or time for questioning. You need to know up front whether or not an initiative will succeed. Failure is not a badge you wear on your chest, and the larger the failure the more quickly you’re shown the door. So why share the lessons? That only shines a brighter light on the problems and exposes your weaknesses. And because you have not only NOT added to the bottom line for this quarter, but you’ve taken from it, you can no longer be trusted.

Can we really deconstruct our disincentives? Can we develop an environment that allows profit and innovation to thrive together? Or are we past the point that we can fix it?

- Andy

Written by AndyErickson · Filed Under Business & Leadership 

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One Response to “Closing The Innovation Gap”

  1. Innovation - As essential as oxygen for entrepreneurial growth « CincyTech Startup O2 on October 12th, 2008 10:13 am

    [...] Judy Estrin’s new book “Closing the Innovation Gap!” Andy Erickson’s blog (TheFutureValueofBusiness) is a great synopsis of the content. Please read [...]

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