The Ecology of Innovation

A few weeks ago I delivered a keynote presentation at the Innovation Congress in Villach Austria. I spoke for about 30 minutes on the topic of The Ecology of Innovation to a group of over 600 participants. I began by saying that I wanted to leave them with three things:

  1. The image of a forest in springtime as a model for innovation
  2. The symbol of an infinity loop as a process of continual renewal
  3. A quote, “Nothing lasts unless it is incessantly renewed”

I then took them off to look at a lodge-pole pine forest and how it renews itself through fire. The core of such (temperate) forests is choked with hierarchy (tall trees) that hog the resources and don’t allow anything to grow underneath them. Thus innovation can take place only along the edges of the system and in open patches, where small-scale experimentation is possible. Fire opens up these innovation spaces while releasing the system’s resources that have been trapped in hierarchical structures. From there I went on to show how the same ecological processes operate in business organizations: enterprises are conceived in passion, born in communities of practice and trust, grow through the application of reason and mature in power. Here they become “frozen” – insensitive to what is going around them – which sets them up for crisis and destruction, but with the possibility of renewal. Conception, birth, life, death and renewal – these are topics central to an ecological perspective!

“Steering” the Enterprise

The ecological perspective is an inherently complex one. The ecological or systems view can be thought of as a three-pane window that operates in space and well as time. The result is a nine-box framework with management in the middle:


The three-level, nine-paned systems view

This perspective promotes the right questions about the dynamics at each of the three levels. At the product or component levels there are often fast-moving technological changes taking place. At the contextual level, political and institutional change becomes important. Clearly a manager is a person in the centre of a field of tension. This feeling was best conveyed by a single slide in the presentation. It shows the “steering wheel” of the enterprise that allows managers to navigate, using a well-known set of management “tools”:


The “Steering Wheel” of the Organization

The managers have to navigate between exploration on the one (left) hand and exploitation on the other (right) hand. Their ways of doing this can be grouped into four categories – according to this framework – power, management, leadership and culture. I didn’t have time to go into these in any detail, but I showed the steering wheel being turned left and right to keep the enterprise in a “sweet zone” between exploration and exploitation. To go “left” is to try something new and different and to court failure: to go “right” is to stick with the familiar and to risk falling into the crisis of a competency trap.

Supporting Evidence for This View

For the evidence to support this perspective of managers “in the middle”, alternating between the exploration for new opportunities and the exploitation of the most promising of them, I used MIT Sandy Pentland’s work. I have just reviewed his new book, Social Physics, and selected it as the best book of the year on innovation. In it he explains how he uses sociometers (smartphone-size instruments) to monitor multiple dimensions of body language (not content) on management teams. From a study of their interactions he can predict (with a surprisingly high level of confidence) which teams will do well on a variety of tasks. One of the things he looks for on creative teams is a “pulse” between exploration and exploitation and his measurements allow networks to “tune” themselves to the amount of these two activities they need.

In a broader context I think that measurements like Pentland’s, when used as feedback to allow teams and individuals to monitor and control their own interactions, point the way to liberating us from the tyranny of Key Performance Indicators (KPIs), the top-down management approaches that accompany them and the resultant crushing of innovation in large-scale organizations.

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