Thursday, November 7, 2013

Ten critical elements for an open innovation culture

Stefan Lindegaard, INTRAP

In our Leadership+Innovation community on LinkedIn, Chris Thoen who is a R&D Director at Procter & Gamble, asked which elements are needed in order to create an open innovation culture. Our community had an interesting discussion and I want to share the key elements that came up.

- Willingness to accept that not all the smart people work for your company. We need to work with smart people inside and outside our company.

- Willingness to strive for balance between internal and external R&D. External R&D can create significant value; internal R&D is needed to claim some portion of that value.

- Willingness to give part of the control to others. We don’t have to originate the research to profit from it. We don’t need to control everything from the cradle to the grave.

- No need to always be first. Building a better business model is better than getting to market first.


Democracy at Work: A Cure for Capitalism

This was an interesting and thought provoking book. The author, Richard Wolf, has written an intriguing and valuable history of the development of democratic capitalism. I found this part of the book very valuable. I also learned from his distinctions and history of the development of socialism and communism. He reverts back to the ideas of Karl Max and defines capitalism not in terms of markets and private property to ideas based on the means and goals of production:

“A capitalist system is, then, one in which a mass of people-productive workers-interact with nature to fashion both means of production (tools, equipment, and raw materials) and final products for human consumption. They produce a total output larger than the portion of that output (wages) given back to them.
The wage portion sustains the productive workers: it provides their consumption and secures their continued productive labor. The difference between their total output and their wage portion is called the "surplus," and it accrues to a different group of people, the employers of productive laborers: capitalists.

The capitalists receive the surplus from the productive laborers by virtue of a wage labor contract entered into between capitalist and worker. This wage labor contract specifies a particular commodity exchange. The capitalist agrees to buy-pay the worker regularly for-her or his labor time. The worker agrees to sell her or his labor time to the capitalist. The worker further typically agrees to use the tools, equipment, raw materials, and space provided by the capitalist. Finally, the worker agrees that the total output emerging from her or his labor is immediately and totally the private property of the capitalist
The productive laborers-those who produce the surplus-use the wages paid to them by the capitalists to buy the goods and services they consume and to pay personal taxes. The capitalists use the surplus they obtain from their productive employees to reproduce the conditions that allow them to keep obtaining surpluses from their productive employees. For example, they use part of their surplus to hire supervisors to make sure the productive laborers work effectively.

They use another part to pay taxes to a state apparatus that will, among other activities, enforce the contracts they have with their workers. They use another part of the surplus to sustain institutions (churches, schools, think tanks, advertising enterprises) that persuade workers and their families that this capitalist system is good, unalterable, and so on, so that it is accepted and perpetuated.

The workers who sign contracts with capitalist employers fall into two categories. Productive laborers are those directly engaged in the production of the goods and services that their employers sell; their labor yields the surplus that employers receive and distribute to reproduce their positions as capitalists. The term "unproductive laborers" refers to all those engaged in providing the needed context or "conditions of existence" for productive workers to generate surpluses. The unproductive laborers have their wages paid and their means of work provided by capitalists. The latter distribute parts of the surplus they get from productive laborers to pay and provide for the unproductive laborers.

In short, the capitalist economic system divides people into three basic economic groups: productive laborers, capitalists, and unproductive laborers. Just as the social context for the economic system-politics and culture-shapes and influences the economy, so the reverse also holds. To focus on a society's economic system, as this book does, does not mean that economics is any more important than politics, culture, or nature in the interaction among them that shapes every society. My focus on the capitalist economic system is driven chiefly by the widespread neglect of this dimension of today's social problems.”

He discusses the transition from private capitalism to regulated capitalism, and private capitalism to state capitalism (referred to by many as socialism). He makes little distinction between communism and socialism. And, he introduces the ideas of social capitalism.

The author develops his ideas for worker self directed enterprises. He introduces what I think is an unfortunate acronym “WSDE”. Weapons of mass destruction come to mind, “WMD”.  I found the latter part of the book discussing WSDEs to be a stretch and tedious. It’s certainly idealistic, and I am in no position, as a non expert, to judge this idea. I only know that it will be very difficult to gain acceptance and usage of this concept except in very special cases. There are just too many unknowns, and the barriers are enormous. The entire political-social-economic system is structured to fight this type of change. And, it’s not just the U.S. It’s the whole world.

Yet, here we are. All well known economic -political-social systems have either failed, are in crisis or are headed for a crisis. Let’s stay open and keep talking.

To read more, click here.