Monday, July 6, 2009

Why did I begin working with innovation systems?

In Complexity: A Guided Tour, Melanie Mitchell wrote about a series of questions that were being circulated among complexity scientists. I liked the questions very much and thought that they also applied to work on innovation systems. So, I’ve modified them for that application:

1. Why did you begin working with innovation systems?
2. How would you define an innovation system?
3. What is your favorite aspect /concept of innovation systems?
4. In your opinion, what is the most problematic aspect/concept of innovation systems?
5. How do you see the future of innovation systems?

I’m going to answer each of the questions in turn over the next several weeks. Hope you take the journey with me and enjoy the trip.

Why I began work on innovation systems

I think that I’ve always been interested in innovation. That interested turned in addition to all the other aspects of innovation as I grew older. Things like creativity, leadership, innovation systems, and many others at one time or another caught my attention.

My earliest memory of innovation was my fascination with the Tom Swift series of books. Tom Swift is the central character in five series of juvenile science fiction and adventure novels that emphasize science, invention, and technology. They had titles like Tom Swift and His Photo Telephone, one that predated the actual invention. The first book was published in 1910 and the latest one in 2007. The original Tom Swift has been claimed to represent the early 20th-century conception of inventors. Tom has no formal education past the high school level; his ability to invent is presented as "somehow innate". Tom is not a theorist but an experimenter who, with his research team, finds practical applications for others' research. I’m sure that these stories developed in me the concept of the lone inventor who could accomplish what organizations could not. And, the dream that a young person could accomplish what adults could not.

I also read the biographies of scientists and inventors, and science fiction (but not science fantasy). And, world fairs with their emphasis on science, technology and the future fascinated me, although I never attended one until I brought my own children to the one in New York in 1965.

I became educated in the power of technological change almost by osmosis as I heard the family story of my Grandfather and Great Grandfather Lehmann (my mother’s family). Although I must admit that I didn’t realize that I had learned something about technology until years later. My Great Grandfather Lehmann came over from a “suburb” of Berlin, Germany in the 1880’s as a teenager. He arrived in Indianola, Texas (a city that no longer exists having been destroyed by a hurricane) and migrated the few miles to Galveston, Texas. Galveston is an Island, actually a barrier sand island in the Gulf of Mexico. It had a good port and became one of the most prosperous cities in the United States until it was destroyed by a hurricane in 1900 that killed 8,000 people, still the most ever killed by a natural disaster in the US. Being a sand island, Galveston has no potable water. The water table was only a few feet beneath the surface, a fact I used to demonstrate to myself by digging a shallow hole in my Grandmother Lehmann’s back yard and watching it fill with water. But it was sea water.

What Galveston had a lot of was rain water. My Great Grandfather Lehmann was skilled as a carpenter, so he opened up a cistern business, building water capture systems for homeowners out of cypress wood and what looked like large barrel staves. As a young man, my Grandfather worked in the cistern business until technological change killed the cistern business in Galveston. When it became possible to drill a water well on the mainland and lay a large pipe under the bay, houses in Galveston had running water.

I remember as a kid that the water tasted like hell and sometimes looked almost as cloudy as milk, but modern technology had triumphed. My Grandfather kept his cistern for a number of years and the women always made ice tea from the cistern water and washed their hair with it proclaiming it better. It was. Eventually, though incremental innovation, the water was improved and even my Grandfather’s cistern disappeared.

My great Grandfather used horse drawn carts to carry materials, but my Grandfather had a car. Actually it was (I think) the first pickup, a Ford Model A with a wooden pickup bed and slats. As I remember I only got to ride in it once. It was a miraculous experience. The smell of the oil and the sound of an essentially unmuffled engine are sharp in my memory. Mostly, the truck sat on blocks in the garage and I played on it as a driver. He taught me what all the controls did. Magical things like the clutch, brakes, accelerator, choke and spark advance. The innovation was understandable.

After the 1900 hurricane in Galveston, a reliable and safe combined car and railroad causeway was constructed in 1912. When the cistern business was declining, the railroad business was expanding. One technology was waning while another was waxing. Both my Grandfather Lehmann and my Great Uncle Eades went into the railroad business. My Grandfather became an engineer for the Santa Fe and my Great Uncle became a car knocker for the railroad yard. A knocker was someone who jumped up on the coupling between two cars and knocked the pin out of the coupling so that the cars would come unhooked. As you can readily imagine, with the weight of those cars, being that close to the coupling when the cars came apart or were hooked together, was not a terribly safe occupation.

My Grandfather’s job seem much more romantic to me. He drove the trains, as I remember, from Galveston west to California. He worked on the steam engines and then the diesel electrics. As he grew older, his engineering was relegated to moving the engines around the train yard. Before all the safety concerns for kids, I got to ride on the engines with my Grandfather. Now that was impressive technology. The sounds, smells, heat, vibration and obvious power impressed the hell out of me. And, still to this day, I have a love affair with a steam engine. Better writers than I have described how the steam engine was alive. I’ll just say that it seemed alive to me because it breathed!
But this innovation was the product of the minds of humans. The principles were understandable. But how people could design and build such a beast was a mystery.

My father also worked for the railroad industry. He was a mechanic/electrician for the Pullman Company. The Pullmans were the sleeping cars on the passenger trains, and represented the top of the technology pyramid for comfort, security and service. At the end of his career, he was the assistant to the regional manager in St. Louis.

Then a wave of innovations hit the railroad industry. The interstate highway system became the infrastructure that led to many innovations in trucking. They also facilitated more travel by cars. And, innovations in aircraft built the air travel industry. Overnight travel by train disappeared quickly. The Pullman Company was hit fast and hard, and my father lost his job. He not only lost his job, but a major portion of his identity, a blow from which he never recovered completely.

At this point, I’m in college, armed with the life experience of the dualistic nature of innovation, and pursuing degrees in physics. Innovation can create and it can destroy. Schumpter coined the phrase “creative destruction” to capture the essence of innovation’s dualistic nature.

Innovation solves problems and it creates new ones. I chose a progressive view – that innovation also provides people with increased capability to solve problems. Often this increased capability is not in the same industry where it has created the problems, but in another area. And, sometimes people need help to adapt to change caused by innovation.

I vowed to my self to never be surprised by innovation in a way that would destroy me.

This meant for me as a college student that I must:

1. Chose a field where the cascade of innovations has just begun
2. Be aware and present
3. Be constantly learning
4. Become a futurist

I chose solid state physics for my field of study in graduate school, and ended up researching the electrical properties of silicon – the material that has become the mainstay of the electronics industry.

I went to work for IBM in Poughkeepsie, New York in the fledgling semiconductor industry. IBM was designing and fabricating germanium alloy junction transistors. But within a few years, silicon replaced germanium as the material of choice for transistors and integrated circuits. I worked armed with the belief that technological innovation was not only the way to solve problems for people but to make IBM successful. After eight years of working in this field I became aware of three things:

1. The future of the semiconductor industry was going to follow the inexorable drive to more transistors per square centimeter until it reached the atomic scale. (At the time we had 5 transistors per chip. It’s now over a billion.) And, while this is a formidable scientific and engineering challenge, it was not one really suited to me.
2. The cost of the electronic portion of products built with the integrated circuits was going to drop to essentially zero.
3. Technological innovation alone was not the answer to solving problems or making IBM successful in the future.

Two opportunities emerged in IBM that gave me a chance to work on what I then saw as a limitation on technological innovation – business practices. I was asked if I would like to become IBM’s resident manager at Texas Instruments (TI) in Sherman, Texas. TI was designing and fabricating some integrated circuits for IBM and I was to manage the contractual relations on site. That one year assignment gave me a chance to see how another semiconductor company operated. TI had a vastly different business model. I learned that there were many different ways to produce innovation.

At the end of this assignment, another opportunity was given me. I was asked to join a corporate task force on diversification for IBM. What we foresaw was the minicomputer and the microcomputer, and their embedment into devices that created data and coupled with application software. We chose instrumentation as the field of devices because we thought that IBM had some talent and expertise in that area. But, our major work was in creating business practices that would allow this fledgling effort to produce these products quickly, inexpensively utilizing the latest technology. The task force turned into another eight year experience that resulted first in the creation of IBM’s first independent business unit and resulted in an IBM wholly owned subsidiary that was eventually sold as IBM followed major consultants’ advice to focus on their core competencies. I spent a great deal of my time doing what is now called “process reengineering” 20 years before the term came into use.

Unfortunately what I discovered was that changing business practices, processes and procedures still was not the answer to unlocking the innovation potential of people and their organizations. Organizational culture ultimately controlled the type and amount of innovation.

I moved to IBM Austin as the technology manager for the site. When I arrived I found that that job was not available. So, for about a year, I studied the IBM site and the technologies of their products. The IBM site in Austin had started as a second source manufacturing facility for IBM’s Selectric typewriters. Manufacture of circuit boards had been added; then Word Processors. What I found was an organizational culture, depth of technical expertise and technical professionalism, and vision far different than what I had experienced in New York. I foresaw significant technological change affecting the product areas for which IBM Austin had the mission and a huge gap in organizational capability, and perhaps even capacity, to grow to meet those challenges.

I asked for and got funding to create and run a program to increase innovation and creativity. For the next 8 years I became a student, practitioner and teacher of creativity and innovation. The program became a model for IBM and grew to include about 60,000 technical professionals. What was obvious from the beginning was the need for a systematic model for innovation, methods to change organizational culture, measurements and how to encourage personal growth. IBM Austin became one of IBM’s most innovative development and manufacturing sites, as measured by patents.

I retired from IBM and within a few years had cofounded a consulting company based on the innovation system originated in IBM. Shortly, I co-wrote a book published by McGraw-Hill entitled Innovate! that described the innovation system. This formulation, driven by the precision required for a book at that time, became very mechanical. Over the years since, the model has become more organic.

Over the 17 years that I’ve been a futurist and innovation consultant I’ve internalized the innovation system and it has altered my perception, thinking and actions. Along the path I have added additional knowledge to the system on topics such as leadership, systems thinking, people, media ecology, collaboration, economics, web 2.0, complexity, chaos and futures thinking.

The basic principles embedded in this innovation system for organizations are:

• Innovation is not a role to be missioned but a means to accomplish all organizational objectives. Everyone in the organization can and must be innovative. The scope of innovation must include everyone directly. Nine different types of innovation are required to meet this condition (incremental product, distinctive product, breakthrough product, incremental process, distinctive process, breakthrough process, incremental procedure, distinctive procedure and breakthrough procedure).
• An innovation strategy must balance opportunities and threats, organizational capability, organizational capacity to change and stakeholder desires.
• The organization must be able to see into the future for a period of time at least as long as it will take the slowest part of the organization to change.
• Innovation that exploits change (social, economic, demographic, political, environmental) happening or about to happen will diffuse more quickly than innovation attempting to create change.
• Innovation that anticipates needs will delight. Innovation that once delighted will in the future only satisfy.
• Customers, competition, stakeholders, the organization, the people in the organization, technology and the driving forces for change external to the organization, and possibly even the market it serves are all part of an interconnected system. No part of the system can be considered independent of the others.
• Organizations with strongly embedded and sharply focused organizational values are efficient. Those with the same value characteristics that have those values focused on the opportunities of the market will also be effective.

One of my criticisms of other attempts on understanding innovation is that they resulted in special theories of innovation systems. My quest has been to find a general theory of innovation systems. I know I haven’t reached that goal yet, but I hope that I’m close enough to recognize it when I see it.

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