Wow. Yesterday was an interesting day. It started with a coffee meeting with a local architect who’s a friend. We discussed how the architecture industry is getting hammered. Then I ran into an old friend who’s a photographer. We discussed how the photography industry is getting hammered. Then a friend posted a link on Facebook about how the advertising industry is getting hammered. Then another friend posted a link on Facebook about how the design industry is getting hammered.

Oy vey. I feel like going out and getting hammered.

On the other hand, I’m positively optimistic. If businesses are to compete, they must become more innovative. If they are to become more innovative, they must become more creative. If they are to become more creative, they must begin to appreciate creativity better. They have to value creative culture and creative people. They have to learn to identify, recruit, hire, train, manage, sustain and retain creative people.

But we, the grasshoppers, have to let go of some old baggage ourselves. If we continue to battle 20th centuries bogeymen, we’re going to lose 21st century opportunities.

In one of the Facebook posts I noted above, the writer (a damned talented guy) closes his argument with this:

Well, this time let’s dissolve back to the year 1519. (Wavy lines, wavy lines.) Cortez and his marauders have come to pillage and destroy Mexico. The way forward is unknown. The size of the enemy, unknown. So to rally his men, the dude gives a pep talk of just three words. “Burn the ships.”

He removes the option of going back.

What if you burned your ships? What if you had to advertise a brand and you couldn’t use TV and print? Don’t ask me. I don’t know the answer. But I do know it’s probably time to burn the ships and step into the jungle.

My advice? If you see ships, you’re hallucinating; there are no ships. They sunk a decade ago.

Look at the opportunity ahead of you. The significant business opportunity of embracing creativity, design and innovation. Figure out how to multiply your skills and talents— share, engage, lead— become a catalyst. The artifact is dead; be the ‘experience’ you talk about so much.

And quit whining.

“Who are YOU? said the Caterpillar
“I hardly know, sir, just at the present–
at least I know who I WAS
when I got up this morning,
but I think I must have been changed
several times since then.”

I’m not a fan of the traditional ’strategic’ thinking. My experience is business managers haven’t much of a clue about what strategy is. I know that sounds arrogant, but ask someone about their strategy and they’ll hand you a spreadsheet of their plan— often little more than an extended ‘to do’ list. That’s if you’re lucky. Worse, they’ll force you to sit through their slide deck. You know it’s true.

What does impress, however, is how the top layers of most organizations present the very idea of strategy— as if it’s something mysterious; something that requires their particular level of genius. And pay grade. Everyone else’s job is to be the ant and implement. Because traditional strategic thinking follows the laws of gravity and, like sewage, flows downhill.

Implementation must be measured, of course. How can the ant be held accountable if its actions aren’t measured? And, since Peter Drucker warns us that strategy and structure must be aligned, if the ant fails in its efforts to implement, then the organization must either re-org or re-tool. It stands to reason. Because the strategy and those who created it can’t possibly be at fault. To question this ‘truth’ is to risk your future at most organizations.

This isn’t to say that planning and measuring aren’t important. They have their appropriate place. But we’ve gotten to the point in the business world to where the tail is wagging the labrador. To question measurement or accountability is an act of blasphemy and high treason.

Such dogmatic acceptance of machine-age business thinking models has a severe limiting effect on organizations who have a strategic need to innovate. Such devotion to these traditional beliefs may advance a business leader’s short-term individual agenda, but will seldom advance the mission of an innovative business. Organizations who create such cultures will struggle to recruit, hire and retain great creative talent.

At New Kind, we believe that innovative organizations compete stronger when they have a mission. A real mission. Something you can understand. Something you can see. Hold onto. Bite into. Something you can join.

Once you have a true mission, goals can be set. Simple goals. Measurable goals, perhaps. Inspirational goals. If you do it right “a-man-on-the-moon-before-the-end-of-the-decade” type goals. Then the next question follows: what is your strategy for meeting your mission.

But first you must know who you are. And this is the most important strategic question for innovative organizations— those whose leadership possess the courage and self-awareness to answer it.

“Who are you?”

For the second half of the 20th century, business leaders aggressively pursued a strategy based on becoming the most efficient, most productive player in their industry. In an age where many companies were bureaucratic and lazy, out-of-shape competitors were numerous. Those companies who were first or best in advancing the most well-oiled, machine-like structures often enjoyed a distinct competitive advantage.

But one can argue that productivity is now more of a commodity. Fat organizations are hardly the norm. The competitive landscape has changed.

When conditions change, strategy must change. And as Peter Drucker warned, so, too, must structure. If the ‘machine model’ is to be replaced, what will replace it?

Many of us believe the answer lies in innovation. Not innovation as technology. Or innovation in the form of walled-off ‘experts’ in a sterile laboratory. But open innovation. Culturally-driven creativity. True entrepreneurial activity. Practical, dynamic innovation, strategic at the core.

It makes sense then that executives and their human resources departments should employ a strategy to compete based on their ability to identify, recruit, hire, train and retain an innovative— more creative— work force. The bad news is that virtually everything businesses and business leaders do in terms of management and corporate leadership, research shows, is the polar opposite of those things they should do to build a creative work force. And the experience of this misalignment is devastating to creative workers.

Creative people are different. They insist upon being different.

In Aesop’s classic fable— The Ant and the Grasshopper— the ant works hard all summer putting up grain for the winter. The grasshopper plays and enjoys the summer. He concentrates on fun and entertainment. Music, wine and love command his attention– he celebrates the summer feasting on the fresh grass that’s freely available.

Winter comes soon enough and the grasshopper finds himself at the ant’s door begging for shelter and food. The ant explains that he barely has enough to get his family through the winter. He enjoyed the lovely music all summer, but he can’t help his friend. The grasshopper freezes to death. And Aesop warns us “It’s better to prepare for the necessities of life.”

It is easy to view creative workers as grasshoppers– unconcerned with the realities of business competition, lacking commitment to the hard work required to compete and having no respect for the waste of unproductive and inefficient play. Unfortunately, accepting this point of view causes a serious conundrum for business leaders in need of innovation. This leader has to adopt a different point of view.

That should be easy. Because the truth is that creative workers are, in fact, ants. When they are engaged, no teams or individuals work harder, less selfishly or more passionately than creative workers. In a sense, they are really /ants/ who think they’re grasshoppers.

But when creative workers are not engaged, no amount of executive proclamations, management control initiatives, structural re-orgs, documented processes, metrics, money, company events, or internal ‘communications’ campaigns will motivate them.

Sticks and carrots don’t work on grasshoppers. Even the fear of death doesn’t motivate them. Because they know a secret– Aesop’s grasshopper would have been fine if he could have just caught a flight to Rio.

When creative workers are not engaged, they will leave; the best and most talented exiting first. And they will start again somewhere else.

Lately we’ve been working with the public sector on some community building efforts. In a recent session we introduced a team to open source principles, general use of collaborative web technologies, and the latest on-line civic participation work. Then, we asked them to do some searching on their own for public sector platforms or campaigns for participation.

Here’s what they came up with during the short span of time. You may have seen most of these sites, and many more are out there. The team was quick to point out that some organizations are definitely doing it better than others. If you have stellar, or not-so-stellar, examples share them.

Open Government Innovations Gallery
Santa Cruz Budget
Wikified Army Field Guide
CDC IdeaLab
Regulations.gov
Apps for Democracy
Massachusetts Open Data Initiative
Data.gov
Kansas Transportation Online Community

Clearly, it’s no longer groundbreaking. And, as people make that necessary switch from evangelist to practitioner, the question should be: Are we paying attention and doing things as effectively as we can?

Not all these efforts have the same aim, and with the ever-maturing taxonomy of all things open it’s important to know what model is best suited for the situation. But, what we’re interested in is community building. The most basic distinction we can make is the difference between the two often-thrown around terms crowdsourcing and open source, as David and Chris each wrote here and here, respectively.

This is where the real work and next frontier for practitioners exists. It’s not just technology, press releases, or prize money. Rather, it’s the overall strategy, design, and message of the platform (loosely defined) constructed and carried out as a coherent method for creating and engaging a community.

There are some things to pay attention to here. They might be brushed off as questions and challenges, but more importantly they’re opportunities to do things well.

-Is what we’re asking of the community in line with interest and ability?

-Are there clear goals; ones either agreed to or developed by the community?

-Is this platform reinforcing or improving a representative democracy and all that comes with it, rather than replacing or detracting from it?

-How sustainable is the community, should it be a short-term or a long-term effort?

-Do we have a way to measure the health of the community and the know-how and tools to guide it when needed?

-Are the legal and technical dimensions set appropriately so that innovation happens within and external to the community?

-Do we bring the right physical world characteristics, attitudes, and norms that we want and maybe discourage the ones we don’t want?

-Do we have an idea of even what this “we” means and where that “we” should fall on the spectrum from free-for-all to facilitator to despot?

These are just a handful of the things we work on and pay attention to daily (along with my collaborators at Georgia Tech). Anyone embarking on a community building or participation project, especially in the public sector, needs to be, too. Community building like many things will always be more of an art than a science, but with the growing examples out there we need to do a better job generalizing knowledge from both successes and failures.

Tinkering with a brand, whether public or private, and requesting the participation and precious time of others, is not something where you just roll out a platform and hope. We can and should get to the point where there is a degree of certainty in practice. And, of course, share the knowledge.

Design Thinking proponents are often at odds with advocates of Six Sigma and other quality-driven, process programs. I have been no exception. It is not that I don’t recognize the powerful competitive advantage such programs have driven over the past three decades. But in an age where quality is often a commodity, it seems reasonable that other innovative models should be considered. And given the unquestionable success of design thinking strategies and open collaborative models in the marketplace, can anyone doubt there are powerful alternatives to consider?

However, perhaps the question doesn’t have to be either/or?

Recently, Sara Beckman wrote an interesting article in the NYTimes— Welcoming the New, Improving the Old. In it, Beckman argues that the different world views of design thinking and six sigma-type quality systems can and should co-exist. Both belief systems— from the designer perspective that pushes boundaries to surprise and delight to the incrementally measured process where workers meet deadlines and margins — are meaningful. “The most successful companies,” Beckman writes, “will learn to build bridges between them and leverage them both.”

Of course, Beckman is correct. Any holistic design thinking process has to incorporate analytical thinking and process, relevant measurement, and incremental improvement. “I’s” have to be dotted. “T”s must be crossed. Advocating for creative culture and process does not  mean advocating against meaningful measurement and accountability.

The key question to consider is which process/culture will drive the most competitive advantage given the current challenges an organization faces. If an organization has been making it’s people act like robots for a long time and needs to change, perhaps Six Sigma is not the choice to make. On the other hand…

Tim Brown of IDEO, who recently published his first book Change By Design, thinks “perhaps we should think of design thinking and Six Sigma being part of a cycle, each feeding the other to create new and improved products, services and experiences. Of course the biggest challenge will be to build business cultures that are agile enough to incorporate both.”

Brown positions the challenge elegantly enough. But the complexity behind his simple declaration is staggering. Where would we begin? As a proponent of open collaborative models, I believe firmly in the competitive power such community-driven innovation serves. It’s so messy though for someone who believes in the order and engineered process of Six Sigma.

If I take this as a design challenge, I need to know more. And I’m wondering, are there good case studies that show how large organizations are attempting to do this now— combine Six Sigma and Design Thinking into a thoughtful cycle of process and culture?

I’d love to hear about them. Or anything close.

New Kind Parter and Chief Design Officer, Matthew Muñoz, has been selected as one of 30 participants in this year’s U.S. National Design Policy Summit on December 1 in Washington, DC. At the Summit, Matt will be collaborating with leaders from professional design, design education, and government organizations to develop and set strategic priorities for the U.S. National Design Policy Initiative.

The U.S. National Design Policy Initiative represents the governmental plan of action to support design as a means of increasing U.S. economic competitiveness and improving democratic governance. The philosophy that design is imperative in the process of governmental innovation isn’t a new one. President Jimmy Carter wrote in 1978, “Good design can help us meet our commitment to improve the efficiency of government…and reaffirm our concern for the human side of government.” And how do we ensure good design? Design policy. The National Design Policy Initiative seeks to make this happen.

Muñoz and his fellow 2009 Summit participants are tasked with: 1) developing the strategic priorities for the U.S. National Design Policy Initiative; 2) finalizing the membership of an American Design Council; 3) gaining a sense of the priorities for design from the U.S. Department of Commerce; 4) engaging the wider design community in national design policy; and 5) developing a set of case studies that demonstrate the value of design.

Muñoz participated in the 2008 Summit as a researcher and facilitator.

If you’re interested in following along, the Summit will be broadcasted live via UStream.tv. You can also keep abreast on Youtube, Facebook and Twitter.

We can talk about creativity and innovation all day long, meld the culture, design the space, set up the infrastructure, and have a repeatable process for bringing ideas to market; but, the ultimate constraint and arbiter — making all other efforts useless — is the legal system.

Protecting something as intellectual property is about balancing returns to society and compensation to a creator. We want society to benefit from a creator’s creation, but enough incentive must compel creators to do their thing.

Enough being the key word and one big, gray space. If a government misses that mark of protection in either direction, society can lose out on innovation. The issue is this mark changes based on the type of intellectual property. Business methods, when protected, have a different balance of returns to society and creator, than software, and pharmaceuticals.

Not that everyone views it that way or the law treats it that way, which is why a current Supreme Court case is important to watch.

Monday, the Court heard Bilski v. Kappos, a case that brings business method patents to the forefront. Previously, the Federal Circuit ruled Bilski’s business method wasn’t patentable because it wasn’t “…tied to a particular machine or apparatus, [nor did it] transform a particular article into a different state or thing.”

Bilski is calling into question the efficacy and legitimacy of what’s called the “machine-or-transformation” test. By telling Bilski his business method wasn’t protected, the Federal Circuit may have invalidated existing patents for business methods.

But, bringing into question the machine-or-transformation test may also have implications for the software industry. At one end, since source code must be run on a machine to do anything, it could be interpreted all software is patentable.

Or, in the view of the Software Freedom Law Center, source code is simply an algorithm we can comprehend, and algorithms themselves aren’t patentable.

Additionally, there are economic arguments that creativity and innovation in software just doesn’t really work that way. Allowing patenting of software led to significant societal inefficiencies like patent thickets, bloated legal departments, patent trolls, and risk-averse companies—all wasting money and limiting innovation.

Just thinking about business methods, does having a legal-based incentive to come up with a new way of doing business increase the rate of new business creation or improve the quality of innovation?

Without the protection, does the effect of essentially forcing businesses to compete on other aspects (really, compete at all), rather than just on who did it first, outweigh what we would gain from preserving/expanding business method patents?

(Of course, this is the economic view, and potentially only figures into a portion of court decision making.)

Leaving the issue of software aside, the Justices showed quite some skepticism of Bilski’s claims yesterday:

“Let’s take training horses,” said Justice Antonin Scalia. “Don’t you think that some people, horse whisperers or others, had some … insights into the best way to train horses? Why didn’t anybody patent those things?”

“I think our economy was based on industrial processes,” responded [Bilski's lawyer].

“It was based on horses, for Pete’s sake!” said Scalia.  “I would really have thought somebody would have patented that.”
(Joe Mullins Reports in American Lawyer)

It’s predictable, but still interesting to see who lines up on each side, or who actively doesn’t choose a side in the amicus briefs.

For a longer treatment on the economics of innovation, check out this book.

In the software development industry the results are in and open source is the winner. As Matt Asay predicts in a recent blog, future dialogues about open source will be less about evangelism and there will be more focus on putting open source into practice.

Which forces us to look, fundamentally, at exactly what we’re putting into practice? Open source software? Or open source itself? What do we mean when we say open source?

At New Kind, we believe that open source is— simply stated—  a beautiful and effective way to scale creative thinking and culture. What is amazing is the rapid acceptance of “open source” beyond software development. Today businesses are looking at open source as a way to create new business models, new management strategies, new marketing, innovation and community-building paradigms.

As we’ve noted before (and will, no doubt continue to note) evangelists in this broader understanding of open source include many of the world’s most influential business thinkers including Gary Hamel, Roger Martin and Tom Peters. Two weeks ago I watched Coke’s VP of Global Branding— David Butler— introduce open source as a powerful branding/design concept to AIGA’s national conference for professional designers. These speakers are not referring to open source software.

But, through the proven success of the open source software development model, in part, they have discovered the competitive power of such creative collaborative, design thinking cultures. And they are advising today’s business leaders to rapidly adopt these new kinds of models across their organizations; internally and externally.

Acceptance will be slow among executives who are just now being introduced to open source creative models. Hamel says they are locked into “archaic beliefs” that must be changed if they are to remain competitive. It took nearly 15 years for the technology acceptance; how long will this take?

The time is now. For organizations where innovation is now a strategic necessity, open source creative cultures are a powerful if frightening alternative to the habitual thinking of analytical-driven, MBA-type cultures. As Martin’s book The Responsibility Virus makes clear, fear is a powerful force that shuts down innovation. Most executives and senior managers have little clue how strongly fear influences their thinking and actions, and the effect that has on the competitive positioning of the organizations they lead.

Open source and design thinking are anecdotes. But there are countless traditional players— individuals and corporations; large and powerful— who have no interest in seeing new competitive threats to their status quo arise. Open source is revolutionary change; landowners seldom start revolutions. These players will not welcome the change open source promises. And they will not play nicely.

Such opposition will look for evidence that open source doesn’t work. To borrow Roger Martin’s language, “reliable” actions will trump more “viable” solutions. When they find ‘reliable’ evidence, they can and will be ruthless adversaries. Open source practitioners must not be naive; evangelism can become a detriment in this environment. Even the Christian Bible (a fair prophet on evangelism) warns, “Faith without works is dead.”

In that context, Matt Asay is correct. Evangelist must begin to play a secondary role to the practitioner. And if Malcolm Gladwell is right, then it takes 10,000 hours for an individual to grasp the nuance and expertise necessary to play that role. That’s a small community of practitioners.

That’s the next challenge for open source.

……………………..

additional resources:

https://www.mckinseyquarterly.com/ghost.aspx?ID=/Strategy/Innovation/Innovative_management_A_conversation_between_Gary_Hamel_and_Lowell_Bryan_2065

http://www.rotman.utoronto.ca/rogermartin/publications.htm

Hopefully, many of you are aware of a project Matthew Muñoz and I have undertaken with Leslie Boney — www.changepapers.org. In a recent post, one of our readers posted this quote from Machiavelli:

“One should bear in mind that there is nothing more difficult to execute, nor more dubious of success, nor more dangerous to administer than to introduce a new system of things: for he who introduces it has all those who profit from the old system as his enemies, and he has only lukewarm allies in all those who might profit from the new system.

This lukewarmness partly stems from fear of their adversaries, who have custom on their side, and partly from the skepticism of men who do not truly believe in new things unless they have actually had personal experience of them. Therefore, it happens that whenever those who are enemies have the chance to attack, they do so in a partisan manner, and those others defend only hesitantly.” — Niccolo Machiavelli

Amen. The Designer’s dilemma.

But that leaves us with little hope. With little hope, how will we have the heart to compete. As the musical Damn Yankees tells us, “You gotta have heart.” [honestly, did I work too hard to make that connection? of course]

Here’s my response that I thought I’d share with you here….

Machiavelli’s quote is spot on. Afterall, land owners seldom start revolutions.

Evolution is fine when one has thousands or millions of years to change; short-term change is more revolutionary in nature. Machiavelli underscores the risk leaders accept when they begin any short-term transformational endeavor.

What is also true is that design/innovative strategies are more commonly used by more desperate competitors. Necessity is the mother of invention. While power, control and other factors were powerful strategies to employ while competing in the Industrial Age, recent evidence is that they are not sustainable in today’s world. They fail society and the businesses themselves overwhelmingly as we try to compete today.

Now we find our institutions facing greater risk, perhaps, than we ever before. From the US Department of Defense to our entire banking system to the UNC Educational System to companies like WalMart and Microsoft, innovative change is a necessity. We are all more desperate.

And here is a fundamental understanding our society and leaders need to understand quickly: Innovation is a creative endeavor.

If we are to compete, we must innovate. If we are to innovate, we must create.

Competing = creativity. That’s the math.

Creativity demands a culture/climate that differs greatly from what we generally experience in our schools, businesses and public institutions today. These institutions must become more creative cultures.

So, is our resolve to compete in this environment great enough for us to overcome the obstacles Machiavelli predicts?

And, can we take on this challenge in ways that prove the worth of such change iteratively, while we reduce risk, and drive fast, efficient and productive new ways to compete? As we better engage our work forces and citizen populations?

That is the challenge. We believe the answer is yes. We’ll discuss these very issues in the upcoming Change Paper #06.

When I first entered the corporate world five years ago after nearly twenty years of running my own business, I was definitely a fish out of water. As a direct report to the CEO, I participated in many of the most important conversations taking place in the company. Being a designer, I often had points of view rather different from the other executives sitting around the table. Sometimes, after offering such a point, I would find them looking at me like I was insane.

The last two days I’ve posted blogs based on articles in recent editions of MITSloan Management Review and the Harvard Business Review. I thought I would share a sample of the best quotes from these magazines— today I’ll focus on HBR (JULY/AUG 2009); tomorrow I’ll look at the MITSloan. While these thoughts and research-based ideas may be new to the business world, they are not to the design world.

The Big Shift— Measuring the Forces of Change

“One of the easiest but most powerful ways firms can achieve the performance improvements promised by technology is to jettison management’s distinction between “creative talent” and the rest of the organization. All workers can continually improve the performance by engaging in creative problems solving, often by connecting with peers inside and outside the firm.”

from HBR; July/Aug 2009; “Leadership in the New World”

“An executive team on its own can’t find the best solutions. But leadership can generate more leadership deep in the organization.”

“Embrace disequilibrium— keeping people in a state that creates enough discomfort to induce change, but not so much that they fight, flee, or freeze.”

from HBR; July/Aug 2009; “Strategy in the New World: The 10 Trends You Have to Watch”

“Corporate leaders need to demonstrate to civil society that they understand popular and political concerns related to executive compensation, risk management, board oversight, and the treatment of employees facing layoffs.”

Management models “need to incorporate more-realistic version of human behavior— most likely by drawing on behavior economics, becoming more dynamic, and integrating real-world feedback— and… business leaders need to get better at using them.”

Regulation in the New World: Government in Your Business

“The changes afoot have been on the horizon for some time, thanks to long-term trends such as deepening public distrust of business.”

Shareholders First? Not So Fast…

“Why should past labor (capital) receive so much preference over current labor (employees)?”

“Consider that there are literally scores of recent studies showing the gains in profitability and productivity that companies have made— not by putting investors’ interests first but by implementing high-commitment work practices. These include investing in training, decentralizing decision making, and having pay contingent on organizational, not just individual, performance. Other sources show the benefits companies reap from customer loyalty and high levels of customer satisfaction.”

[DB NOTE: I was struck by the use of "high-commitment" rather that "accountability" in the paragraph above. Machine parts need to be "accountable" but innovative organizations thrive via deep personal commitment. Fodder for a future blog]

Restoring America’s Competitiveness

“Corporate management must overhaul its practices and governance structures so the no longer exaggerate the payoffs and discount the dangers of outsourcing production and cutting investments in R&D.”

“Stop blaming Wall Street for short-term behavior… When companies promise to increase returns quarter after quarter, that’s what Wall Street expects. But when they articulate a credible long-term strategy and demonstrate a capacity to execute that strategy, the capital markets have given them the necessary room to achieve it.”

“Managers would serve their companies more wisely by recognizing that informed judgment is a better guide to making such decisions than an analytical model loaded with arbitrary assumptions. There is no way to take the guesswork out of the process.

“Only be rejuvenating its innovative capabilities can America return to a path of sustainable growth.”

Sane or insane? You decide. More tomorrow…