Institutional innovation, Mark Twain and John Seely Brown
His book The Power of Pull, co-written with John Hagel III, works off their recurring theme that “management practices and corporate institutions are fundamentally broken.” The sub-title—how small moves, smartly made, can set big things in motion—is a great description of the power of design as strategy.
In a recent article they published for the Harvard Business Review, they describe six fundamental shifts in the way we work. In their discussion of one shift in particular—Asia is the new global center of innovation— Brown and Hagel illustrate a fundamental problem that I describe in my post the grasshoppers’ revenge:
the concept of institutional innovation — as yet anyway — is all but invisible to most Western executives.
In a world where it is virtually a given that most organizations must be innovative to compete—where creativity is therefore a strategic imperative—western executives and business leaders are blind to the cultural and structural changes that must occur for their organizations to compete and win.
What we see time and time again is that western business leaders continue to believe wholeheartedly in the systems and processes and structures of their time and tribe—the MBA-driven mantras of the ’80s and ’90s—regardless of new data and research regarding clear changes in the competitive landscape. And, sadly, regardless of the continual dismantling of the U.S. economy and its competitive position.
Perhaps we shouldn’t be surprised. It is a business bromide that you get what you incent. Our business leaders have been generously rewarded over the past three decades. That may explain why, as Seely and Hagel tell us, they simply can not see that there are alternatives. But, while they have done well for themselves, we are finding that they have not done as well by their customers, long-term shareholders, employees and the communities they serve.
Mark Twain warned us,
“it’s not what you don’t know that hurts you, it’s what you know that ain’t so.”
Institutional innovation—a business imperative today—is dependent upon creative workforces. If your goal is to incent creativity, then you must see that culture trumps structure. Business leaders who are willing to accept this truth will find a competitive advantage in the 21st century. But, first, they’ll have to be willing to see something that, presently, they can’t even conceive exists.