Innovation's Organizing Principles

Sources
Of Themes that Led to Prototype Principles

See separate Bibliography here

Summary

The idea of valid first principles for innovation is to make explicit what is tacit and implicit. The themes and sample source material that led to the prototype principles are explicated in this section.

The content of the text is the themes that I noticed early in this project. I used this write-up of the themes and sources, prepared mainly during the second half of 2010, to arrive at a configuration of principles. That configuration then evolved, due in part to whole new chunks of expert resources. Those new resources continually reinforced the thematic fundamentals, and at first, I incorporated new excerpts in this document. There was a point, however, when I stopped doing that, in part because I think there is value in conveying the original signals that I noticed, including perhaps providing fodder for a better translation of the themes into principles.

Although this "sources" text preceded the final form of the four prototype principles, it is organized similarly. The four principles are summarized here for quick reference:

#1 -- Innovation's essential function is resource leverage and its form is offerings, for change by way of value.

Innovation's function and form fits: within both the commerical and social production systems; as a complement to science and invention; as a function shared with the practice of entrepreneurship; and as the end of tools such as "intellectual capital" and "design thinking."

#2 -- Innovation methodology's basic structural unit is an effective customer-facing hypothesis.

#3 -- An effective innovation hypothesis integrates particulars of purpose, knowledge, and cognitive processing.

#4 -- Passion and vision are fundamental to practitioners' personal-level "why" of pursuing innovation.

Quick Links to "Sources" Sections:

• Themes of Function ("What & Why")
• Themes of Method ("How") -- Overview
• Themes of Method ("How") -- Relative Detail
  • Purpose
  • Knowledge
  • Cognitive Processing

A. Themes of Function

• A large genus united by "leverage"
• Means to leverage is customer utility and/or production efficiency
• Standard of performance is “large” – high leverage and broad scale
• Developed in the commercial sector but broadly pertinent & boundaries flexible
• Pre cursor to a knowledge-based economy where knowledge is the “only meaningful resource.”
• An imperative within sustainable development

Addressing the “what” of innovation and entrepreneurship involves definition, which is a necessary but challenging starting point. That's because the most enduring aspect of definition for innovation and entrepreneurship may be elusiveness, including an absence of consistent distinction between the two terms. Each term has been associated with a large genus. However, when it comes to what has made each term most meaningful, or noteworthy, thought and action leaders have spoken consistently to the overlapping function of resource leverage -- generating more value from the same resources or the same value from fewer resources.

1. From early thinkers: a large overall genus united by the hallmark function of "leverage" --

In the first half of the twentieth century, economist Joseph Schumpeter described entrepreneurship as a “large genus”: “(S)pectacular instances” such as “railroad construction in its earlier stages,” the “motorcar,” and “colonial ventures” fit within “a large genus which comprises innumerable humbler” instances “down to such things as making a success of a particular kind of sausage or toothbrush.”[1]

 

Further, a large genus is consistent with what Jean Baptiste Say had established a century earlier. When Say coined “entrepreneur” as an economic term, his first example was of a knife grinder who undertook to produce without land (“self industry”).[2] However, throughout his early nineteenth century treatise, Say cast entrepreneurship as the human (or knowledge) equivalent of a new tool or machine that advances productivity. Instead of machinery, the entrepreneur provides “the application of acquired knowledge to the creation of a product for human consumption.”[3]

 

Say made limited use of the label, "innovation," typically discussed separately from entrepreneurship and without explication. However, Say made it clear that the function of increasing yield on resources, or leverage, is what matters most to production. This is “the acme of industry”:

(The new tool or machine’s) obvious effect is to make less labour requisite for the raising the same quantity of produce, or, what comes exactly to the same thing, to obtain a larger produce from the same quantity of human labour.— And this is the grand object and the acme of industry.[4]

Further, like Schumpeter, Say’s examples made clear that the highest standard for the genus of entrepreneurship was large, or “spectacular,” advances in productivity. Schumpeter described the standard as “reforming or revolutionizing” the production system, or “creative destruction.”[5] Especially at this high end of the large genus, “the entrepreneur acts with confidence beyond the range of familiar beacons and overcomes resistance to change.”[6]

Charting the large genus of productivity advances, with an axis for amount of leverage and another for extent of scale, the standard of success -- whether for a single enterprise, an industry, or a national economy -- would fit into the top-right quadrant of high leverage and broad scale. However, all four quadrants represent advances in productivity because there is leverage in all four quadrants.

 

2. United by the means of customer utility and efficiency --

In the context of Say’s framework, shifting resources from lower to greater yield occurs through:

• expanding utility to customers with newly conceived offerings; or
• increasing efficiency.

Say noted that aspects of each means to greater commercial yield – utility and efficiency -- placed the function of the market in the context of a broader set of societal functions. For example, when advances in utility are the source of realizing greater yield, Say clarified that utility is determined fully by customers, leaving it to “the moralist and the practical man the several duties of enlightening and of guiding their fellow-creatures.”

… It is universally true, that, when men attribute value to any thing, it is in consideration of its useful properties; what is good for nothing they set no price upon. To this inherent fitness of capability of certain things to satisfy the various wants of mankind, I shall take leave to affix the name of utility.* …

 

(T)o create objects which have any kind of utility, is to create wealth; for the utility of things is the ground-work of their value, and their value constitutes wealth. …(T)here is a creation, not of matter, but of utility; and this I call production of wealth.[7]

 

… *It would be out of place here to examine whether or not the value mankind attach to a thing be always proportionate to its actual utility. The accuracy of the estimate must depend upon the comparative judgment, intelligence, habits, and prejudices of those who make it. True morality, and the clear perception of their real interests, lead mankind to the just appreciation of benefits. Political economy takes this appreciation as it finds it – as one of the data of its reasonings; leaving to the moralist and the practical man, the several duties of enlightening and of guiding their fellow-creatures, as well in this, as in other particulars of human conduct.[8]

Similarly, Say noted that it is a function of public management to steward a nation’s natural resources, And for efficiency-based advances in the production system, Say noted that the advantage to the nation’s “wealth,” or overall standard of living, could represent temporary disadvantage to a set of individuals, as machines reduced the need for human labor. Compensating for this displacement might occur within the production system itself (e.g., via advances in total production). However, on the whole, Say depicted important complementary dynamics between a market-based production system and a broader societal system.

 

3. Modern Voices --

Modern voices have reinforced the continuing pertinence of Say and Schumpeter’s fundamental ideas and indeed have argued for preserving them. In terms of fundamentals and perspective across commercial and social systems, the voices of Drucker and Prahalad stand out. Core themes within Drucker’s 1985 primer, Innovation and Entrepreneurship, include preservation of fundamentals such as advances in total productivity, utility, and leverage:

An innovation is a change in market or society. It produces greater yield for the user, greater wealth-production for society, higher value or greater satisfaction. The test of an innovation is always what it does for the user.[9]

Of course we know that … innovation is an economic, not a technical term.[10]

Drucker’s 1985 primer treated “innovation and entrepreneurship” as singular – as if those three words should be read as one. He argued that innovation and entrepreneurship do not represent stages. Instead, the practice as a whole pursues greater yield on resources: “Innovation is the specific tool of entrepreneurs."[11] Innovation is a “diagnostic discipline” and the “knowledge base of entrepreneurship.”[12] To move from incidental to systematic innovation and entrepreneurship involves active “search for and … exploitation of new opportunities for satisfying human wants and human needs.”[13] Entrepreneurs need to search purposefully for the sources of innovation …”[14] As with Say, the result of higher productivity and greater yield is what matters.[15]

 

Prahalad too emphasized the centrality of leverage within entrepreneurship:

All entrepreneurship is about aspirations greater than resources.[16]

It’s not enough to get to the future first, one must also get there for less.[17]

Further, in The New Age of Innovation, Prahalad and co-author M.S. Krishnan not only reinforced the enduring principle of customer determination of utility, they extended it to the degree of “N=1.” Within this overall model, the variable “N” represents the customer, and “N=1” means that production must consider every individual customer’s needs (along with the full set of global resources as the relevant set of resources).[18] Most noteworthy, Prahalad and Krishnan described this degree as representing "a movement in process" within the commercial production system, "not a choice."[19]

 

Altogether, I take from these themes the following fundamental function of innovation and entrepreneurship:

--resource leverage via expansion of customer utility or advances in efficiency;

--with the greatest leverage and scale representing the highest standard within a large genus of practice.

 

4. Beyond Startup Businesses and Beyond Conventional Commercial System --

Both Drucker and Prahalad called for applying innovation and entrepreneurship both broadly and systematically. To begin, they clarified that the practice pertains at least as much to large and existing enterprises as to small and/or new enterprises (as did Say and Schumpeter). Drucker held that larger, existing organizations have more resources for innovation and entrepreneurship, and Hamel and Prahalad declared a fundamental premise that the “the age of incrementalism is over.”[20]

 

Both Drucker and Prahalad also spoke to extending applications beyond the standard commercial system. With the conception of the “base of the pyramid,” Prahalad presented a vision of viable commercial potential within the developing world, as one intelligent means to economic development.[21] Drucker used the term “social innovation” throughout his 1985 primer, arguing:

Say was primarily concerned with the economic sphere. But his definition only calls for the resources to be “economic.” … (Entrepreneurship) pertains to all activities of human beings other than those one might term “existential” rather than “social.”[22]

 

… (I)nnovation is an effect in economy and society, a change in the behavior of customers, of teachers, of farmers, of eye surgeons – of people in general. Or it is a change in how people work and produce something.[23]

Moreover: “There may be greater scope in the U.S. for social innovation in education, health care … than in business.”[24] And:

What we need is an entrepreneurial society, in which innovation and entrepreneurship are normal, steady, and continuous.[25]

 

5. Precursor to Knowledge-based Economy --

By 1993 Drucker strengthened his admonitions for broad and systematic applications of innovation and entrepreneurship within the context of a “post capitalist” society, in which knowledge is the only meaningful resource. His essential message: Learning to use knowledge toward advancing productivity, which all organizations must do, means learning to practice innovation. A knowledge-based economy means an innovation-based economy.

 

The skilled-craft practice of innovation and entrepreneurship can be viewed as the precursor to the practice of knowledge work broadly in the post capitalist society:

(K)nowledge is the only meaningful resource today … The knowledge we now consider knowledge proves itself in action … These results are seen outside the person – in society and economy, or in the advancement of knowledge itself.

 

The traditional ‘factors of production’ – land (natural resources), labor, and capital – have not disappeared, but they have become secondary. They can be obtained … provided there is knowledge. And knowledge in this sense means knowledge as a utility, knowledge as the means to obtain social and economic results.

 

Every organization of today has to build into its very structure the management of change…

 

Every organization … will have to learn how to innovate – and to learn that innovation can and should be organized as a systematic process.[26]

At this time, Drucker was explicit in reinforcing and even strengthening his case for innovation in the social and public sectors, as he held that the post capitalist stage “changes fundamentally the structure of society.” “It creates new social and economic dynamics. It creates new politics.”[27] Capitalism and society are fundamentally interrelated. With this:

Social innovation is as important as new science or new technology in creating new knowledges and in making old ones obsolete. Indeed, social innovation is often more important.[28]

 

Government … is going to be the most important area of entrepreneurship and innovation over the next twenty-five years.[29]

One of the primary labels attributed to Drucker is “prescient,” and indeed his 1990s and subsequent writing heralded dynamics that are associated increasingly with challenges of U.S. capitalism vis-a-vis society (e.g., in 2011, increasing circulation of ideas such as Michael Porter’s conceptualization of “shared value” within the context of “rethinking capitalism” and McKinsey & Company global managing director, Dominic Barton’s, view regarding capitalism for the long term).[30]

 

6. Emergence of Social Entrepreneurship Movement --

As of the 21st century, within the context of recent broad visibility of activity labeled social innovation and entrepreneurship, leaders of thought and action have reinforced both urgency and the crucial and fundamental function of leverage within the social production system:

The social entrepreneur asks, “What is the most highly leveraged way that you can help speed up the change process?”[31]

 

The (social) entrepreneur engineers a permanent shift from lower-quality equilibrium to a higher quality one.[32]

 

(High-impact) non-profits use the power of leverage to create tremendous change. … They influence and transform others in order to do more with less.[33]

The measure of “doing good” is creating leverage. Organizational form is secondary: “These approaches could be pursued through for-profit, nonprofit, or hybrid organizations.”[34]

 

7. Innovation within Sustainable Development and “Renewal” --

Finally, the societal issue of sustainable development has prompted a global-level imperative of innovation, which by virtue of its size alone blurs boundaries between the commercial and social production systems. Within a 2007 panel discussion held at the University of Michigan, entitled, ”Is Consumerism Sustainable?” the panelists concurred that “innovation” is the answer … “either gradually or by crisis.”[35] It is up to innovation to advance yield on natural resources to at least maintain the standard of living among developed populations while also improving the standard of living among developing populations. Together, these can be viewed as opposing imperatives, and Jeffrey Sachs adds that “political will” will need to complement innovation.[36]

 

John W. Gardner and others used the term “renewal” in the second half of the 20th century to refer to “not just innovation and change”… but “also the process of bringing the results of change into line with our purposes.” Gardner noted too: “The only way to conserve is by innovating.”[37] In 2011, renewal is an active element of dialogue among leading voices. As one example, designer Roberto Verganti has advocated for moving beyond user-centered design to what amounts to forward-centered design.

 

Thus, as society at large faces the overarching and omnipresent need for advancing yield on resources, it seems that one important, if not essential, lever would be deep and shared understanding of the fundamental purpose and practice of innovation and entrepreneurship, in support of conversion from skilled craft to methodology. Instead, the terms have become omnipresent, but fundamental and shared understanding has not.

B. Themes of Methodology as Skilled Craft

Advances in productivity begin with human conception of what “could be” and are completed with the realization of change in society or the economy. So how have successful practitioners of innovation and entrepreneurship as skilled craft produced the conceptions and associated advances? What are the fundamental aspects of what leading practitioners do to create resource leverage? How and why do they do it?

Viewing the essential methodology as depicted by thought and action leaders over time and across sectors suggests that enduring fundamentals of “the innovation method” include the following attributes:

• Three necessary elements are seamlessly integrated day to day as a way of life: purpose; knowledge; and cognitive processing.


• The particularities of each element are as important as their integration.


• A “style of thought” that fuels and mediates the dynamic integration of these three core elements becomes so intuitive that it may be more a matter of “style of instinct.” Learned intuitive sensibility and discernment regarding resource leverage supports effective integration of the elements, or mastery.

Below I expand upon the nature of the methodology associated with the skilled craft and how practitioners have used the methodology to produce resource leverage, first as an overview and then with more detail. This description of fundamentals represents connections of the themes as I observed, or interpreted, them. I share many examples of the sources within the overview and detailed sections.

Overview

For each fundamental element of innovation's practice as skilled craft – purpose, knowledge, and cognitive processing – thematic particularities are these:

Purpose – Motivational profiles may vary, but successful practitioners achieve resource leverage. Even if a practitioner’s driving motivation is personal wealth or “to create,” success is defined by resource leverage. Skillful practice features sensitivity to, and sensibility about, leverage, which includes sensitivity to, and sensibility about, creating new customer utility. Innovation practitioners see opportunities to create utility that will realize leverage in the context of production systems.

 

Knowledge -- Innovation and entrepreneurship requires “pertinent” knowledge, which means enabling a sound diagnosis for leverage. Pertinent knowledge is not necessarily elite or even consciously-held; it might be ordinary and/or tacitly held. Four thematic strands of knowledge are: industry (technical and operational); customers; general human and social dynamics; and “anything and everything.” (For the social production system, industry knowledge would include, for example, the public education industry, the public health industry, etc.)

 

Cognitive Processing -- In contrast to wide variation of knowledge levels, innovation's hypotheses draw fundamentally upon higher-order thinking, especially skills of analysis and synthesis, plus strong practical intelligence. Generating innovation hypotheses features combined critical, creative, and practical thinking, toward “paradigmatic imagination” – “the ability to see possible … connections before one is able prove them in any way.”[38] Practitioner discernment is fundamental to effective new connections. Effectively acting on hypotheses features cognitive skills that are practical in nature.

Given innovation's purpose of resource leverage, new connections are hypotheses about “what could be as new value to customers” and "how it could become" an offering that catalyzes new yield. This contrasts with the scientific method’s incorporation of the paradigmatic imagination for hypotheses regarding “what is” or invention's hypotheses regarding "what could be technically". A new connection for innovation can be viewed as a “lever-based vision” for advancing productivity.

 

The hypothesis may originate in an early, undeveloped form, but once it is developed, the specific and purposeful vision resulting from the new knowledge connection serves as a bridge to action:

Knowledge --> Lever-based vision --> Action

There is a substantial difference between this type of vision – a lever-based picture of what could be that is based on a new connection of pertinent knowledge – and a vision that is based on aspiration but not on developed hypotheses about resource leverage.

 

Also, because a conception for leverage incorporates knowledge of operations and customers, the initial connection may imply at least a foundation of how to apply it. For example, when Wendy Kopp conceived of Teach for America, she realized that the idea relied on a recruitment model that would feature the early, aggressive, and selective characteristics of investment bank and consulting firms' recruitment of the same talent pool.

 

Further, because the combinatorial processing that leads to a lever-based vision is based on existing knowledge, an “effective” new connection can be as compelling to others as it is to the conceiver. Bruner described that new connections within the paradigmatic domain are “beheld” commonly; anyone who understands the elements connected can see the new combination.[39] It is both new and noteworthy: “The triumph of [paradigmatic imagination] is that it takes one beyond common ways of experiencing the world.”[40] However, in short order the surprise takes on a quality of obviousness.[41]

 

With the example of Facebook, Time Magazine notes: “Facebook employees get treated well … but make no mistake: the main attraction is Zuckerberg’s vision.” Time quotes a current vice president “who was doing a master’s in artificial intelligence” and initially thought Facebook would be a waste of time:

And the interview completely changed my mind. I saw the vision.
I came in, and I saw it on a whiteboard.[42]

For practitioners of the skilled craft, it is especially difficult to separate purpose from cognitive processing. Sensitivity to resource leverage is linked to “seeing” opportunities and to the drive to address them. For example, Samuel Zell, a benefactor of the Zell-Lurie Institute for Entrepreneurial Studies at the University of Michigan’s Ross School of Business, commented:

Part of the motivation is from having perspective that’s different … You look around and say, “I can do that better.” And want it to be better. It’s an attitude of thinking of solutions.[43]

Bill Drayton, to whom the term “social entrepreneur” is attributed, describes any entrepreneur’s vision as an active process of “how tos.” The driving purpose of resource leverage and associated pertinent knowledge base makes the hypothesized levers about how tos:

Take a how-to issue – “How are you going to solve this problem?” – and push them from the first to the second to the third to the fourth level of the challenge. The real entrepreneurs love that. Because that’s what they spend their time thinking about in the shower in the morning and they don’t have anyone else they can talk to about it.[44]

The “how to” attribute can make an idea all the more lifelike and guiding to all who participate in acting on it. Clayton Christensen and Michael Raynor describe that “innovative ideas emerge in half-baked formed,” but a deliberate vision is underway.[45]

 

Even if a new conception emerges in a flash of insight, it is grounded in knowledge and in intuitive sensibility regarding the “how to’s” of resource leverage within the operations context. Although the standard for the practice is high leverage, the same fundamental integration of elements generates any amount of leverage, from modest amounts to “creative destruction.”

 

Hypotheses for resource leverage constitute innovation methodology's basic structural unit, acting alone or in interaction with other hypotheses. The practice draws upon these hypotheses not only for breakthrough ideas but also for the day-to-day tasks that make an idea a reality.

 

Ideas for leverage suffuse the practice throughout all phases and tasks. “LSD millionaire” and entrepreneur, Augustus Owsley Stanley III, is said to have built his (at-first legal) business on the initial, foundational insight that others would share his personal interest in knowing the source of the product:

As he told The San Francisco Chronicle in 2007, he had set out only to make a product he knew he could take, because its ingredients were known … “And my friends all wanted to know what they were taking, too,” Mr. Stanley said. “Of course,” he added “my ‘friends’ expanded very rapidly.”[46]

But Stanley’s essential customer-insight lever was integrated with wide-ranging supplemental levers that led one observer in 2011 to compare Stanley’s “entrepreneurial qualities” to those of Steve Jobs:

Like Mr. Jobs, Mr. Stanley was fanatical about quality control. …

Owsley LSD was curated like a varietal wine and branded as evocatively as an iPod — “Monterey Purple” for a batch made expressly for the 1967 Monterey Pop festival …”[47]

 

Integration as "Style of Thought" --

A medium that relates all three fundamental elements (purpose, knowledge, and cognitive processing) dynamically may be what learning theorist, Jerome Bruner, called a “style of thought”:

It may well be that the style of thought of a particular discipline is necessary as a background for learning the working meaning of general concepts.”[48]

Bruner offers the example of “function” as an organizing concept in biology, where increasing experience with the subject can bring the meaning of function increasingly to light.[49] For innovation and entrepreneurship, “leverage” may be a similarly foundational style of thought, where increased experience with the practice could bring the meaning of resource leverage increasingly to light, including its dependence on customer utility.

 

“How to” is another possibility for a distinguishing innovator/entrepreneur style of thought. With operations as the innovator/entrepreneur’s channel of expression and high-leverage offerings as its form, “leverage” and “how to” both are integral to the practice.

 

Zell observed: “An entrepreneur is capable of looking at a situation and envisioning how to get from here to there. An entrepreneur sees opportunities and solutions.”[50]

 

And Gregory Dees, founder of Stanford University's Center for Social Innovation, noted: “An entrepreneurial mindset is always asking ‘how to’ make something happen.”

 

Richard Clarke, former U.S. counter-terrorism czar, may have been describing an entrepreneurial style of thought, or something akin to it, when he asserted that the difference between “geeks” and “nerds” is that “Geeks get it done.”[51]

 

With technology as an increasing factor in innovation and entrepreneurship, there may be an increasing “geekepreneur” species of entrepreneur. This would fit with innovation/entrepreneurship as the precursor to a knowledge-based economy; however, the knowledge required goes well beyond the technical.

 

Whatever the label for innovation's developing style of thought, it seems clearly linked to a developing intuitive familiarity with resource leverage. Successful practitioners of the skilled craft describe early and regular experiences with the practice and its effects that led them to pursue increasingly larger projects.

 

Similarly, David Kelley, a founder of the design firm IDEO and founding figure within Stanford University’s Hasso Plattner Institute of Design (known as the d.school), describes “creative confidence” as an element of practitioner development and effectiveness.

 

The more that everyone involved in the practice has developed the style of thought or intuition – from a two-person venture or project to a team within a large, organization-wide effort -- the more likely it seems that the work can come together as the genuine collaboration that results in synergy. With a shared lever-based vision plus shared intuitive familiarity with resource leverage, team members could be especially well positioned to move together – to improvise and build on one another’s strengths and knowledge.

 

In successful cases, a vision that begins as a mental picture of "what could be" would be transformed increasingly into actuality, or in the best cases into an actuality that exceeds the original picture. With the most effective entrepreneurial team, total performance would be greater than the sum of parts.

 

Within larger teams or organizations, shared understanding of a lever-based vision alone can facilitate effectiveness and potential synergy. The need for understanding the lever-basis of the vision is reinforced broadly. For example:

If one of your employees doesn’t know why they’re doing their job, then you’re really losing out.[52]

 

The strategy must make as much sense to all employees as it does to top management.[53]

Within a global, knowledge-based economy and an overall ingenuity epoch, the innovator/entrepreneur’s fundamental style of thought may represent what needs to become for society overall the equivalent of an orchestra’s shared score. No matter what one’s version of participation, from creator of vision to support figure, the score seems pertinent at every level: individual, team, organization, industry, production system, and society. For decision makers regarding deployment of resources there may be no more important understanding.

 

On a societal level, effective first principles for innovation could serve to clarify the fundamental “what” and "why" of the practice, plus the fundamental “how.” An established, high-quality set of principles could provide one crucial lever within an overarching vision for converting the practice effectively from skilled craft to methodology.

 

Themes of Method -- Relative Detail

Quick Links to Sections within Relative Detail:

• Purpose
• Knowledge
• Cognitive Processing

This section, which adds relative detail to the above overview, remains about essential, organizing principles of innovation’s methodology. The detail remains about themes that span and unite the work of thought and action leaders throughout the large genus of practice for innovation and entrepreneurship.

1. Purpose

Motivational profiles may vary, but successful practitioners achieve resource leverage -- generating more value from the same resources or the same value with fewer resources. Even if a practitioner’s motivation is strictly personal wealth or mainly “to create,” success is defined by resource leverage, and successful practitioners' personal aspects of purpose are consonant with resource leverage. Skillful use of the method features sensitivity to, and sensibility about, leverage, which includes sensitivity to, and sensibility about, creating new customer utility.

Successful practitioners have an “action bias”[54]; however, their sensitivity to, and sensibility about, resource leverage not only drives them to address opportunities for leverage, it supports them in doing so effectively. It drives them to find levers that are effective in order to act. Their orientation is to opportunity. The “glass is half full” means that there is an effective lever that can be identified and acted upon. For example, in a 2010 publication, the Drucker Institute quoted Drucker:

"The characteristic of the innovator is the ability to envisage as a system what to others are unrelated, separate elements. It is the successful attempt to find and to provide the smallest missing part that will convert already existing elements."[152]

Bruner held that "invention is discernment," linked to intuitive sensibility that is associated with depth of knowledge. Risk is a by-product of conviction in a vision of opportunity, and successful practitioners’ developed intuitive sensibility regarding both resource leverage and a production system subject area supports risk management:

“They’re not control freaks; they’re quality control freaks.”[55]

 

“Entrepreneurs have an opportunity orientation that leads them to see possibilities and to think in terms of how they can get something done, rather than seeing the problems and thinking of … why they can’t.”[56]

 

“(The work is) led by people with intolerance for excuses.”[57]

 

"(Design thinking) is based on the 'design attitude,'" which features messiness that leads to clarity and "assumes that it is difficult to design an outstanding alternative, but once you have, the decision (to choose it) ... becomes trivial." [57-1]

Research and other resources indicate that motivational profiles vary. However, as a creative practice, there is often an element of intrinsic motivation, and money tends to be secondary to other motivators.

"The truth is that entrepreneurs are rarely motivated by the prospect of financial gain, because the odds of making lots of money are clearly stacked against them. Instead, both the entrepreneur and the social entrepreneur are strongly motivated by the opportunity they identify, pursuing that vision relentlessly, and deriving considerable psychic reward from the process of realizing their ideas."[58]

 

"Of three dominant motivations … power, affiliation, achievement … entrepreneurs are motivated primarily by achievement."[59]

 

“Most successful entrepreneurs say that their primary motivation has been to build something lasting, not to make a lot of money.”[60]

Jacqueline Novogratz, founder and CEO of the Acumen Fund, quotes a then “71-year-old entrepreneur who defined his breed as”:

"… the most stubborn and persistent people in the world. Entrepreneurs see possibility, an idea, and won’t stop, regardless of the obstacles, until they make it happen. They aren’t necessarily the smartest people in the world, but they are the ones who have the guts and the heart to do whatever it takes to make dreams come real."[61]

Similarly, domains of application tend to reflect an innovator/entrepreneur’s personally held values and interests. However, an advance in productivity requires that others adopt what is introduced, and as Say established, utility is determined fully by the adopters. Thus, for a connections-based practice, the ultimate, most powerful connection may be between an entrepreneur’s personal passion – his or her internal values – and the external world’s values.[62]

 

Prahalad advised a cohort of Acumen Fund Fellows: “Don’t do (this work) … for morality only. Do it because intellectually it’s the most exciting thing you can aspire to as a young person.”[63]

 

And Steve Case, co-founder of AOL and chair of the Startup America Partnership, has described entrepreneurship as a model of “people, passion, and perseverance.”[64] “People” refers to a team’s shared belief in, and passion for, the vision of what could be. And perseverance includes all that goes into the “overnight success” that is “ten years in the making.”[65]

 

Similarly, Drucker held that:

"Innovators … need to be temperamentally attuned to the innovative opportunity. It must be important to them and make sense to them. Otherwise they will not be willing to put in the persistent, hard, frustrating work that successful innovation always requires.[66]

Finally, a team of researchers identified passion as a primary factor in entrepreneurs’ persistence or tenacity:

To achieve high goals requires enormous energy and stamina. When goal-directed energy is sustained over time, it is called persistence or tenacity. Pursuing an opportunity is never easy; failure at some point or in some respect is an inevitable part of the process. What sustains such effort over long periods? One factor is high self-efficacy or task-specific confidence …. The second factor is, strangely enough, love. …

 

More precisely, it is a passionate, selfish love of the work. Some commentators like to pretend that businessmen’s core motive is to selflessly serve their employees and society. We argue, in contrast, that ego is a central motive. The true or rational egoist passionately loves the work; they love the process of building an organization and making it profitable. They are motivated to do what is actually in their own interest—that is, to do everything necessary.

 

Surprisingly, there have been virtually no quantitative studies of the role of passion in entrepreneurship. One exception is the study by Baum et al. (2001). Although not shown in that report, when Baum entered passion for the work as a separate variable along with 29 other variables from five domains (personality, situational motivation, skills, strategy, and environment), passion had a direct significant effect on firm growth.[67]

 

Drive to make the world a better place? --

Among the themes of purpose within the work of thought and action leaders, there is a sub-theme of “drive to make the world a better place.” For example:

Why Serial Entrepreneurs Can’t Stop --

“Their secret? In a word: purpose.”

“Serial entrepreneurs want to make a buck, sure. … But what they really want, above all, is to change the world. (In psychiatry this attribute is known as generativity--a passion to improve the planet for successive generations.) Revolutionizing industries might be one approach; combating an injustice or influencing policy are two more.

Changing the world is a quest. And that work is never done. ”[68]

The strength of purpose within this sub-theme gave me pause. As the Kauffman Foundation’s CEO has pointed out, commercial entrepreneurship improves a society’s overall standard of living -- "All entrepreneurship is social."[68-1] Nonetheless, I puzzled over the theme and circled back to sources. (It had seemed as if entrepreneurship was more of a fit with the social production system than the commercial production system.)

 

Eventually, I wondered if the purpose of generativity might be especially characteristic of those contributing the advances that fall into the “top-right” quadrant of high leverage and broad scale. For example, when Say described the reasons the highest caliber of entrepreneurial talent is rare, within a context of what is now known as "commercial" industry, the nature of talent he described sounds like the highest qualities of leadership:

(T)his kind of labour requires a combination of moral qualities, that are not often found together. Judgment, perseverance and a knowledge of the world as well as of business. … (T)he requisite capacity and talent limit the number of competitors for the business of (entrepreneurs).[69]

Similarly, Schumpeter described the early capitalist entrepreneur as “just another leader,” evolving from and displacing the feudal system …[70] This nature of talent also sounds like the leadership qualities that Inc. Magazine’s editor calls “mojo” in the book, Small Giants: Companies that Choose to Be Great Instead of Big, referring to a rare breed of leader within the domain of privately held businesses (not bound to the shareholder purpose).[71]

 

In general, I began to find (or notice) new evidence for the sub-theme of passion directed to “generativity.” For example, from reflections of a radio program’s host about a founder of Twitter:

I will never forget the young founder and chairman of Twitter leaning forward in his seat at the Clinton Global Initiative, telling me that social networking technologies should reinforce the value of human relationship — ultimately driving us towards new ways of connecting physically as well as digitally. My sense is that while his passion lies close to his surface, he is rarely invited to give voice to it. It is counterintuitive to many casual analyses of social networking’s dangers.[72]

Also, from a late 2009 cover article of the Harvard Business Review:

What motivates innovators to question, observe, experiment, and network more than typical executives? They want to make history … put a ding in the universe … disrupt in the cause of making the world a better place.[73]

Bill Drayton, to whom origination of the term “social entrepreneur” is attributed, remarked:

What differentiates the entrepreneur who is going to change a pattern at the scale we’re looking for from other people? I think the heart of it is that entrepreneurs, for some reason, deep in their personality know, from the time they are little, that they are on this world to change it in a fundamental way. They will not be satisfied expressing an idea. … Entrepreneurs have in their heads the vision of how society will be different when their idea is at work, and they can’t stop until that idea is not only at work in one place, but is at work across the whole society. And in business, this is called marketing – going beyond the invention in the garage. The same thing is true in the social arena.[74]

Further, Drayton's own vision for changing the world is rooted in a society of changemakers that sounds much like Drucker's notion of "an entrepreneurial society." Drayton described his initial work of establishing a fellowship of top-flight social entrepreneurs as making possible a second-stage vision as “everyone a changemaker”:

"What we must do now is increase the proportion of humans who know that they can cause change. And who, like smart white blood cells coursing through society, will stop with pleasure whenever they see that something is stuck or that an opportunity is ripe to be seized. Multiplying society’s capacity to adapt and change intelligently and constructively and building the necessary underlying collaborative architecture, is the world’s most critical opportunity now. Pattern-changing, leading social entrepreneurs are the most critical single factor in catalyzing and engineering this transformation."[74-1]

And in Time Magazine’s long cover article about Mark Zuckerberg as 2010 Person of the Year, the theme of “making the world a better place” is primary. (This is in striking contrast to the “Social Network” film-based account of Zuckerberg and Facebook – acknowledged as fiction – and of which Time says: “This (film) character bears almost no resemblance to the actual Mark Zuckerberg.) For example, Time says of Zuckerberg and the Facebook organization:

The (headquarters) hums with high purpose, a feeling that the world is changing for the better, and this is where the change is coming from. …

Zuckerberg loves being around people … He’s spent his whole life in tight, supportive, intensely connected social environments … He didn’t build Facebook so he could have a social life like the rest of us. He built it because he wanted the rest of us to have his. … It grew because it gave people something they wanted. …As for money, his indifference to it is almost pathological.[75]

Zuckerberg’s firsthand comments about the “Social Network” film speak to how much the “improve the world” purpose of the skilled craft practitioner of innovation/entrepreneurship might be misunderstood by society broadly:

But the biggest thing that thematically (the film) missed is the concept that you would have to want to do something – date someone or get into some final club – in order to be motivated to do something like this. It just like completely misses the actual motivation for what we’re doing, which is, we think it’s an awesome thing to do. … For me, computers were always just a way to build good stuff, not like an end in itself. … The thing that I really care about is making the world more open and connected. What that stands for is something that I have believed in for a really long time.[76]

Other evidence for the sub-theme of making the world a better place comes from a variety of management thought leaders. For example, it fits with Drucker’s argument that commercial companies create disincentive for the innovation and entrepreneurship that is needed for a nation’s overall economy when senior executives’ compensation is more than 20-fold the organization’s lowest compensation.[77] And “An engineer will not be motivated to make a speculator rich.”[78] Further, from Hamel and Prahalad, among others:

Companies that create the future are constantly striving to better the human condition.[79]

 

As much as anything, foresight comes from really wanting to make a difference in people’s lives.[80]

If the sub-theme of drive to make the world a better place represents a “species” of innovator/entrepreneur, it would seem to be a species suited well for either the commercial or social system. In terms of persona, this species would combine operations-based entrepreneurship with direct stewardship and leadership. “Philanthrocapitalism,” a term associated with socially engaged billionaires such as Warren Buffet, Bill Gates, and now Mark Zuckerberg, may be closely related.

 

Finally, a very different innovator/entrepreneur species, or persona, may also serve as a resource for making the world a better place based on the intersection between the need for generativity and innovation and entrepreneurship’s overarching purpose of resource leverage. This is a segment of the “new ruling class” – the “super rich” in a “winner-take-most” economy. One investigative journalist and author described that this group feels “disgust” with the U.S. population’s general incompetence at productivity (which may relate to cultural phenomena that Schumpeter held would be associated with capitalism failing based on success).[81] At the same time, this persona has a “geeky enthusiasm” for the world of ideas and is drawn to high-leverage opportunities to reshape the world.[82]

 

This group may not be taking the lead in identifying and advocating particular "make the world a better place" opportunities, but they respect resource leverage. Thus, for high-quality ideas, they are a potential collaborative resource, both intellectual and financial.

 

Overall, the unifying purpose of resource leverage within the skilled craft of innovation/entrepreneurship is likely to have an increasing role in “making the world a better place.” It may be coinciding with a strong, and perhaps increasing, drive to do so as well.

 

2. Knowledge

Innovation and entrepreneurship requires “pertinent” knowledge, which means enabling a sound diagnosis for leverage. Pertinent knowledge is not necessarily elite or even consciously-held; it might be ordinary and/or tacitly held. Four thematic strands of knowledge are: subject area technical and operational; customers; general human and social dynamics; and “anything and everything.”

 

The shipping container, viewed as one of the highest-leverage innovations of the 20th century, did not require new or advanced knowledge.[83] Nor did the McDonald’s introduction of standardized fast food.[84] Drucker depicted the innovation that is borne of new knowledge (both scientific and nonscientific) as the “cutting edge of the knife,” supported by a much broader base of innovation.”[85] Similarly, in the realm of “social problem solving,” thought leaders Charles Lindblom and David Cohen noted that “ordinary knowledge” plays a significant role.[86]

 

It may seem obvious that knowledge – or more specifically, understanding – is a fundamental element of innovation and entrepreneurship, but the basic dictum for knowledge is a visible and explicit theme among thought and action leaders.

a. Subject Area: Technical and Operational --

Pertinent knowledge begins with the call for deep subject-matter knowledge, encompassing both technical and operational knowledge:

The “entrepreneurial move” is from intelligibility to innovation.[87]

 

“To say something is new one must know if it has been tried before.”[88]

 

“If you deeply understand the problems … you will find solutions of value.”[89]

 

“Innovate only where you understand.”[90]

 

“The more familiar the parts, the more striking the new whole.”[91]

 

“You can’t improve what you don’t understand.”

 

“The good intuiter may have been born with something special, but his effectiveness rests upon a solid knowledge of the subject, a familiarity that gives intuition something to work with.”[92]

 

“Creativity requires mastery of the medium in which the work is to be done.”[93]

Say noted the importance of the practical knowledge gained from hands-on operations experience given the operations-based channel:

I have said, that the cultivator, the manufacturer, the trader, make it their business to turn to profit the knowledge already acquired, and apply it to the satisfaction of human wants. I ought further to add, that they have need of knowledge of another kind, which can only be gained in the practical pursuit of their respective occupations, and may be called their technical skill. The most scientific naturalist, with all his superior information, would probably succeed much worse than his tenant, in the attempt to improve his own land. A first-rate mechanist would most likely spin very indifferently without having served his apprenticeship, though admirably skilled in the construction of the cotton-machinery. In the arts there is a certain sort of perfection that results only from repeated trials, sometimes successful and sometimes the contrary. So that science alone is not sufficient to ensure their progress, without the aid of experiment ….[94]

Similarly, Drucker held that diagnoses for effective change require depth of understanding of the overall operational area of change:

(Diagnosis) … requires judgment … It requires knowledge of the business, of its products, its markets, its customers, its technologies. It requires experience rather than analysis alone.[95]

 

b. Customer knowledge --

The fundamental premise that productivity advancement is based on customers’ response to an offering, which is based on their perception of expanded utility, has endured and also gained strength. Attunement to this premise may also be among the most important elements of the successful entrepreneur’s style of thought and instinct. Similar to Say’s emphasis on customer utility for a market-based system of production, Drucker pointed out that the need for a customer orientation is as obvious as it is little observed:

Above all, we know that an entrepreneurial strategy has more chance of success the more it starts out with users, their utilities, values, realities. … ‘But this is nothing but elementary marketing,’ most readers will protest, and they are right. It is nothing but elementary marketing.”[96]

In the 21st century, thought and action leaders echo this fundamental principle:

“A successful new business is built on customer insights.”[97]

“It is enlightened self-interest to do a better job of understanding customers.[98]

 

"The common starting point is always the consumer ... A team needs to find a way to let go of their own biases and know their target consumer inside and out."[98-1]

 

"The customer is boss." [98-2]

Further, this principle pertains -- along with other fundamental organizing principles of innovation and entrepreneurship -- to any domain of application. Augustus Owsley Stanley III, is said to have built upon an “effortless grasp of his peer group and its appetites,” which included an appetite for quality LSD, at “the time Madison Avenue was at sea about how to reach the so-called youth market of the 1960s.”[99]

 

Within the tech industry, Steve Jobs displayed early on a seemingly effortless understanding of the industry’s more generally hard-won learning that utility is determined by users: "We're the ones who are stupid" if consumers can't use these devices. Others who understood this early, such as Alan Cooper, called for the industry overall to catch on. In The Inmates are Running the Asylum, Cooper spoke directly to the industry's need for the learning, essentially echoing Jobs' statement above.

 

In Ann Arbor, Menlo Innovations was borne of its founders’ similar pioneering attunement to the productivity of designing software to match users’ needs. In establishing the firm, Menlo trademarked the term “high-tech anthropology.”

 

The tech industry may have learned this fundamental aspect of innovation and entrepreneurship slowly, but it did so surely, solidifying concepts such as “user-based design,” “human-computer-interaction,” “usability,” etc.. These lessons seem closely related now to an emerging pattern within social innovation and entrepreneurship, as described within this site's cases of social innovation.

 

"Design thinking's" customer orientation represents an evolution of the tech industry’s increasing link to “design.” Within the conceptualization of “design thinking,” principles of user-based design are extended and applied broadly. In Change by Design, Tim Brown, CEO of the design firm IDEO, provides a framework and methodological guidelines for design thinking. One core principle is understanding users, including the functionality of empathy for developing any new offering that intends to advance utility:

“Empathy (is about) connecting with those observed at a fundamental level. … It is perhaps the most important distinction between academic thinking and design thinking. … The mission of design thinking is to translate observations into insights and insights into products and services that will improve lives.”[100]

(Bill Drayton, too, has emphasized the fundamental fit of empathy within social entrepreneurship and changemaking.)

 

Throughout the design industry, thought leaders have served as a leading force in advancing frameworks for innovation that incorporate insightful understanding of customer needs and values.

 

At Stanford University’s d.school, subject area knowledge and customer knowledge both are incorporated within design methods aiming at innovation. This type of initiative fits into other broadening efforts to relate specialized subject-area knowledge more closely to user knowledge. For example, in his introduction to the 1997 Harvard Business Review volume on Innovation, John Seely Brown refers to an article that argues for the great potential that can result from enabling research technologists “to traffic in” the space of customer needs and compromises:

In “Breaking Compromises, Breakaway Growth,” George Stalk, David Pecaut, and Benjamin Burnett discuss how to listen for conflict in the marketplace and how to tap into the value that is trapped in the compromises that customers have been forced to make. “The most important compromises are forced on customers simply because companies have lost touch with those customers’ needs. Finding and breaking those compromises can unleash new demand and create breakaway growth.”

 

By changing the discourse and enabling research technologists to traffic in these ideas, we are facilitating the movement of inventions into the marketplace. And this is what we mean by “innovation”: invention implemented.[101]

Further, the concept of “customer capital” – mutual learning between firm and customer -- has emerged based on the new reality that the main resource for advancing productivity is knowledge.[102] In Intellectual Capital Thomas Stewart described that customer capital (one of three types of knowledge-based capital) represents a “shift of focus from selling to learning”:

The high ground of data is mutual learning: If only you knew what your customers want, you could sell more to them. If only your customers knew what you could do, they would buy more from you. … Value creation is more and more a collaboration between buyer and seller.[103]

Stewart cited research indicating that customer capital was the “single most important influence on revenue per employee and profit per employee.”[104]

 

Likeminded thought leaders such as Prahalad and Krishnan have emphasized “co-creating” offerings with customers. Again, the model in The New Age of Innovation takes the importance of customer utility to the extent of considering every individual customer’s needs within the context of an overall model that is about innovation as a basic way of doing business. Serial entrepreneur and educator, Steve Blank, offers a model of “customer development” that includes co-creation combined with Geoffrey Moore’s model of new product acceptance from Crossing the Chasm and more.[105]

 

At the same time, criticism of “user-centered” has emerged within the context of sustainable development. Indeed, design thought leader Roberto Verganti has argued that “user-centered innovation is not sustainable.”[106] Verganti proposes actively incorporating a priority for sustainability within the design process, including a beneath-the-surface approach to understanding customers’ values and potential interests. The challenge is greater as is the risk of failing to realize customer adoption, but in Verganti’s view sustainable development is more important, and the integration can be accomplished. (In Change by Design, the framework that Brown advances is consistent with this essential integration.)

 

Verganti’s challenge to integrate sustainability with customer utility can be viewed as a macro application of Roger Martin’s general notion of “integrative thinking.” In The Opposable Mind, Martin described that “the practice of holding oppositions together can produce particularly powerful new combinations.”[107] Verganti argues:

Only forward-looking executives, designers, and, of course, policy makers may introduce sustainable innovation into the economic picture. They need to step back from current dominant needs and behaviors and envision new scenarios. They need to propose new unsolicited products and services that are both attractive, sustainable, and profitable.

 

It is only within the framework of a vision-centered process that users can provide precious insights. There are indeed some people who are already adopting sustainable behaviors. However, they are rare exceptions. Only leaders and designers who are driven by a vision and who explicitly search a priori for those sustainable behaviors can tune out the unsustainable needs of 99% of users and focus on the few exceptions.

 

One such person ... is not at all user centered in his approach … He wants to find sustainable behaviors. Therefore, he refuses to look at dominant consumption. Rather, he explicitly searches for the needle in the haystack: local fringe communities that have already found sustainable solutions for everyday living. He then engineers these solutions and proposes them at a larger scale.[108]

 

c. General Knowledge Beyond Subject-Area --

Beyond understanding one’s own enterprise, including its users, two themes stand out regarding enduring, fundamental categories of knowledge within the skilled craft of innovation and entrepreneurship:

-- general human and societal dynamics, including change dynamics;

-- “anything and everything.”

i. General human and societal dynamics

Fundamentally: “Innovators and entrepreneurs are in the business of change.” And it is humans within societies who do the changing. The market is based on dynamics of human behavior within societal contexts. The tech industry’s experience with patterns of adoption for new offerings has generated models of “change” as a knowledge resource. Though these models have been generated from new technology experience -- such as Geoffrey Moore’s Crossing the Chasm – the models may be generalized to many other fields.[109]

 

In the social production system, knowledge of human and social dynamics, and change in particular, has special meaning. For example, many social system offerings aim at human development and behavioral change (often difficult change). For a variety of reasons, the social system has faced perennial difficulty in catalyzing change, and models of change specific to the social production system are receiving increasing attention.

 

Similarly, “insights into the human condition” is a strand of knowledge and understanding discussed by thought and action leaders across sectors. For example, of Zuckerberg, Time Magazine wrote:

There are other people who can write code as well as Zuckerberg … but none of them get the human psyche the way he does. …Wherever it comes from, this acute awareness of how other people’s brains work characterizes all of Zuckerberg’s projects. … Whereas earlier entrepreneurs looked at the Internet and saw a network of computers, Zuckerberg saw a network of people.[110]

Academic thought leaders Lindblom and Cohen noted, with reference to social problem solving: “In the larger view, … questions about research and policy making are transformed into challenging questions about man, his brain, politics, and society.“[111] And Bruner, quoting Freud, wrote: “Effectiveness is not a product of utopia but rests upon insight into the human condition.”[112]

 

Finally, to facilitate the potential of innovator/entrepreneurs to make the world a better place, “knowledge of the world” would be appropriate, to borrow Say’s phrasing. The Kauffman Panel on Entrepreneurship Curriculum in Higher Education related knowledge of the world directly to insights into human and social dynamics:

We cannot improve a world we do not understand, and we cannot advance if we do not comprehend ourselves, our strengths, limitations, and motivations.[113]

 

ii. Broad knowledge, often seemingly “unrelated”

Guided by the drive to advance productivity, a project on the mind of a successful practitioner of the skilled craft of innovation and entrepreneurship becomes an unconscious filter through which everything, including memory, is scanned for potential value. With “connection” as the source of creative conceptions, seemingly unrelated knowledge often becomes integral. One prominent example is the story of Steve Jobs and MacIntosh fonts in which Jobs drew upon incidental experience learning calligraphy at Reed College:

I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating … None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography.[114]

Explaining this common phenomenon throughout the history of innovation, Steven Johnson notes:

Concepts from one domain migrate to another as a kind of structuring metaphor, thereby unlocking some secret door that had long been hidden from view.[115]

 

Other projects linger in margins of consciousness … physician by day; other projects too. … ‘slow’ multitasking – multiple interpretive systems … Chance favors the connected mind.[116]

In this vein, David Kelley and Tim Brown have espoused the value of “T-shaped people” (a term attributed to McKinsey & Company) -- people possessing depth in a specialized area along with broad knowledge. This shape facilitates effective lever-based connections. Brown associates a T-shape with a disposition to collaboration and thus a strong resource for an interdisciplinary team with collective ownership, as opposed to multidisciplinary, with individuals focused on self interest.[117]

Similarly, a Harvard Business Review article on the “Innovator’s DNA” described “networking” as a source of broad knowledge and insight among innovators. Networking was one of four “discovery skills,” or patterns of action, associated with the production of insights.

3. Cognitive Processing … “Only Connect”

In contrast to knowledge, innovation always requires higher-order thinking. It requires a combination of critical and creative thinking, which is categorized as “paradigmatic imagination” – “the ability to see possible formal connections before one is able prove them in any way.”[118] The innovator/entrepreneur’s hypothesized new connections are about levers to increase yield on resources.

 

[Note: Two sets of resources pertinent to this section are reflected in the prototype principles, but not in the text below. Those two sets are: (i) recent research findings from neuroscience; and (2) less visible research findings from a body of focused work on the topic of "creativity."

• The latter body of work, developed mainly during the last quarter of the 20th century, is said to have represented at the time the largest government funding for social science. The funding was short in duration, but the work was fundamental to my processing of the first principles.


• The findings of neuroscience have served mainly as a check on consistency.


• Overall, I found the additional sets of resources to provide valuable added dimensions to the text below. They didn't change it; they enriched it.]

 

The paradigmatic mode of thinking fits within what Bruner described as two broad modes of thought: paradigmatic and narrative. In describing the paradigmatic mode, otherwise known as logico-scientific, Bruner referred to science: “attempts to fulfill the ideal of a formal, mathematical system and description and explanation.” However, the notion of a system fit with the general stream of work with respect to innovation's expression of imagination.

 

For both paradigmatic and narrative imagination, critical and creative thinking are integrated. As Bruner put it: “(T)he left hand (is) trying to transmit to the right.”[119]

"(T)he fact and symbolism of the right hand and the left – the one the doer, the other the dreamer. The right is order and lawfulness … Its beauties are those of geometry and taut implications. Reaching for knowledge with the right hand is science. Yet to say only that much of science is to overlook one of its excitements, for the great hypotheses of science are gifts carried in the left hand."[120]

Bruner drew too on another’s description: “making combinations that ‘reveal to us unsuspected kinship between … facts long known, but wrongly believed to be strangers to one another.”[121] For innovation's purpose of catalyzing new yield in a production system by way of new value, the same type of combinations of unsuspected kinship are consistent with thought and action leaders' descriptions of effective ideas.

 

Within the separate “narrative” mode of thought, narrative imagination is achieved when the left hand joins the right within this mode. It leads to “good stories” and “gripping drama.”[122]

 

a. Only Connect … New connections are built from existing parts --

Within either of these two modes of thought, Bruner established the working definition of “creating” as “effective surprise,” which results from new combinations of existing knowledge, or “combinatorial activity”:

"An act that produces ‘effective surprise’ – this I shall take as the hallmark of a creative enterprise.”[123]

 

"The content of the surprise can be as various as the enterprises in which men are engaged. It may express itself in one’s dealing with children, in making love, in carrying on a business, in formulating physical theory, in painting a picture."[124]

Though surprise is unexpected, “effective” surprises tend to have a quality of obviousness about them:

"Surprise is … the unexpected that strikes one with wonder or astonishment. What is curious about effective surprise is that it need not be rare or infrequent or bizarre and is often none of these things."

"Effective surprises … seem … to have the quality of obviousness about them when they occur, producing a shock of recognition following which there is no longer astonishment."[125]

The quality of obviousness fits with what is often viewed as the ultimate compliment to a new idea: “This is obvious … Why didn’t we think of this sooner?” A compelling new idea may seem more practical than creative. Yet, Bruner also notes: “The triumph of effective surprise is that it takes one beyond common ways of experiencing the world.”[126]

 

b. "Invention is discernment" --

Further, “effective” is a crucial modifier of “surprise.” Bruner notes that only a “small minority” of new combinations are effective. He also held that discernment is integral to the cognitive activity, positing that "invention is discernment":

To create consists precisely in not making useless combinations and in making those which are useful and which are only a small minority. Invention is discernment, choice.[127]

Bruner hypothesized that discernment is associated in part with one’s development in a field of knowledge, resulting in an “intuitive familiarity”:

I suspect that in each empirical field there is developed … a kind of ‘intuitive familiarity’ … that gives him a sense of what combinations are likely to have predictive effectiveness and which are absurd.“[128]

The notion of intuitive familiarity fits with the emphasis on subject-area knowledge among thought and action leaders: “Innovate only where you understand.” On this point, prominent designer and author about design, Donald Norman, notes that the value of “fresh eyes” can go only so far:

Today … designers work on organizational structure and social problems, on interaction, service, and experience design. Many problems involve complex social and political issues. As a result, designers have become applied behavioral scientists, but they are woefully undereducated for the task. Designers often fail to understand the complexity of the issues and the depth of knowledge already known. They claim that fresh eyes can produce novel solutions, but then they wonder why these solutions are seldom implemented, or if implemented, why they fail. Fresh eyes can indeed produce insightful results, but the eyes must also be educated and knowledgeable.[129]

Gardner noted that creativity extends the benefits of subject-area knowledge:

Creativity requires mastery of the medium in which the work is to be done, but it requires something more.[130]

Gardner held too that this extension is associated with “a trait misunderstood”:

The truly creative person is not an outlaw, but a lawmaker. They bring about new relatedness, connect things that did not seem previously connected, sketch a more embracing framework, move toward larger and more inclusive understandings.[131]

Bruner’s premise “that all of the forms of effective surprise grow out of combinatorial activity – a placing of things in new perspectives”[132] is widely held in present day and in direct association with innovation and entrepreneurship. In 2010 Steven Johnson wrote of the history of innovation: “Good ideas are not conjured out of thin air; they are built out of a collection of existing parts (conceptual and/or mechanical).[133]

 

Paradigmatic imagination extends the benefit of critical thinking by integrating it with creative thinking skills and practices. To begin, it integrates the three top skills on Bloom’s Taxonomy of thinking skills: evaluation, analysis, and synthesis. In Tim Brown’s account of the creative process, analysis and synthesis are “equally important”:

The creative process … relies on synthesis, the collective act of putting pieces together to create whole new ideas. Once the data have been gathered, it is necessary to sift through it all and identify meaningful patterns. Analysis and synthesis are equally important, and each plays an essential role in the process of creating options and making choices.[134]

Similarly, Ken Robinson speaks to coupling "the evaluative and the generative," with the generative medium varying (e.g., for science, the generative medium is "argument"). For innovation, offerings would constitute the main medium of expression.[134-1]

 

However, beyond this type of classification of thinking skills, with synthesis the skill typically categorized as “creative,” an HBR volume on Knowledge Management addresses the broader domain that Bruner described as the “right hand’s ways of knowing.” For example, this volume described the function of giving internal access to images and symbols, such as metaphors, within productive combinatorial processing:

(C)reating new knowledge is not simply a matter of “processing” objective information. Rather, it depends on tapping the tacit and often highly subjective insights, intuitions, and hunches of individual employees and making those insights available for testing and use by the company as a whole. … (E)mbodying tacit knowledge in actual technologies and products requires managers who are as comfortable with images and symbols … as they are with hard numbers.[135]

Another example of alternate ways of knowing may be the realm of “mindfulness” that Jon Kabat-Zinn describes as a largely untapped source of creativity in the West. In general, Bruner described the “how” of arriving at effective new combinations as a matter of connecting the technical with “inspiration.” There can be more to the practice than thinking and knowing skills, but structures of thinking and knowing are fundamental.

c. Internal conditions and external conditions –

The work of various thought leaders, Bruner included, associates the creative process with both internal and external conditions, or ecosystems, and the reciprocity between internal and external conditions. Johnson detected external ecosystems as a powerful correlate with innovation, or “great ideas,” over a period of centuries, but also cautions sensitivity to the pitfall of “group think.” Johnson notes that innovation is not “the wisdom of the crowd but the wisdom of someone in the crowd.”[136] And Gardner argued: “All innovation begins with the individual.”

 

The need for fertility within both the internal and external systems is prominent. Further, the thematic descriptors of fruitful conditions are consistent for both levels. These descriptors include: openness; flexibility, and complexity.

i. Openness

Johnson describes external ecosystems as the means to innovation’s requirement of getting more “parts on the table” to enable new connections. As a general premise, Johnson notes that openness is fertile: “If there is a single maxim that runs through this book’s arguments, it is that we are often better served by connecting ideas than we are by protecting them.” Johnson identified seven patterns that he found to correlate with individuals’ generation of innovation throughout several hundred years, with most featuring the reciprocity of internal and external conditions:

The argument of this book is that a series of shared properties and patterns recur again and again in unusually fertile environments. The more we embrace these patterns the better we will be at tapping our extraordinary [individual] capacity for innovative thinking.[137]

Seely Brown points out the nontrivial incongruity between the premise that “knowledge and intellect grow exponentially when shared” and the observation that organizational and cultural systems are not structured to reward the sharing. In addition to novel practices such as the “spider web” organization that brings people together quickly for a charge and then disbands them, innovation productivity will require “cultural norms with reward systems tailored to the purpose.”[138]

 

Bruner too spoke of external openness. Of a year-long participant observation of a “highly productive invention group,” Bruner’s most general conclusion was:

The effectiveness of group members consisted in their sense of freedom to explore possibilities, in their devotion to elegant solutions, and in the interplay among them that, in effect, made each man stronger in the group than individually.[139]

Both Bruner and Gardner spoke of internal “openness” as well, as a condition of creativity found “in most highly original people.” Gardner’s description included:

More significant than their receptivity to the external world is their exceptional openness to their own inner life. They do not suppress or refuse to face their own emotions, anxieties and fantasies. They are better able to “relinquish conscious control and to face … the impulses and imagery arising from more primitive and unconscious layers of the personality.” … They have fewer internal barriers or watertight compartments of experience.[140]

In this vein, Johnson described the historically productive pattern of the “slow hunch.” And Gardner noted: “Creative engineers let their hunches … come to the surface, where the uncreative ones would tend to censor them.”[141]

ii. Flexibility

On the internal trait of flexibility, there are similar reinforcements. Gardner explained this trait’s function within those who are highly original:

(T)hey do not persist stubbornly in one approach to a problem. They can change directions and shift strategies. They can give up their initial perception of a problem and redefine it. … Related to this flexibility is a trait psychologists have called a “tolerance for ambiguity.” … They do not find it difficult to give expression to opposite sides of their nature at the same time. … The advantage of this fluidity is that it permits all kinds of combinations and recombinations of experience with a minimum of rigidity.[142]

Again, Martin echoed ideas about cognitive flexibility within his account of “integrative thinking" within, The Opposable Mind, where he described that “the practice of holding oppositions together can produce particularly powerful new combinations.”[143]

 

Further, in a report of research conducted to determine “how expert entrepreneurs think,” the overarching finding was that experts rely on “effectual reasoning,” which exemplifies flexibility as a way of life. With this flexibility, resource leverage suffuses their lives at every level, encompassing matters great and small:

Brilliant improvisers … they constantly assess how to use their personal strengths and whatever resources they have at hand to develop goals on the fly, while creatively reacting to contingencies … As much as the ability to concoct new products, it is (a) tendency to riff off whatever ideas or materials are handy that defines entrepreneurs as a creative breed.[144]

Flexibility was central to Seely Brown’s introduction to the HBR volume that encompassed a wide variety of approaches to individuals working together in a creative process. Seely Brown stressed the need for flexibility to engage a repertoire of approaches:

To do things differently, we must learn to see things differently. Seeing differently means learning to question the conceptual lenses though which we view and frame the world ... To see differently, we need new intellectual constructs.[145]

iii. Complexity

Multiple sources speak to the value of “complexity” in generating productive new combinations. Brown argued that “complexity is the most reliable source of creative opportunities.[146] And in the words of Oliver Wendell Holmes:

I would not give a fig for the simplicity this side of complexity, but
I would give my life for the simplicity on the other side of complexity.

At the same time, Gardner notes an important inner condition for making either external or internal complexity productive: Highly original people can “tolerate a wild profusion of ideas and experience” because of their capacity to “find order in experience.”[147] And this tolerance is associated with “profound confidence in” one’s capacity to bring some new kind of order. (This is similar to David Kelley’s description of “creative confidence” as a crucial developmental trajectory.)

 

Thus, making complexity productive requires a tolerance that is borne of confidence in one’s capacity for effective paradigmatic imagination. In other words: some level of skill leads to a confidence that leads to a tolerance for complexity that leads to discernment of effective connections in the midst of the complexity.

 

Such confidence, it would seem, would result from development borne of fruitful practice with paradigmatic imagination. The practice could begin from genetic predisposition, environmental conditions, or both, but something must get it started, and it is productive outcomes that is likely to keep it going and developing into increasingly capable discernment and associated confidence.

iv. Absorption

Among other inner conditions of creativity, both Gardner and Bruner included in their lists sustained commitment and energy: “(Highly original people) are wholly absorbed in their work.”[148] They experience unusually strong intrinsic motivation.

 

For paradigmatic imagination applied to innovation and entrepreneurship, the inner condition of absorption is widely noted, with a strong element of intellectual engagement. Drayton holds that entrepreneurs “think about how to's in the shower.” Schumpeter spoke of entrepreneurs’ “joy of creating.” And again, Prahalad counseled Acumen fellows not to engage in the work for moral reasons only, but because “intellectually it’s the most exciting thing you can aspire to as a young person.”[149]

 

An individual's absorption and intrinsic motivation can be both shared and united. A clear and compelling lever-based vision can promote shared absorption within an operating environment, from small team to large organization. Further, the more that everyone in the environment shares an overall innovator/entrepreneur style of thought and general lens of resource leverage, the more likely the prospect for reciprocity, synergy, and a flexibility that is combined with focus. Optimally, a team improvises in the mode of a jazz combo.

 

v. Not responsive to conscious efforts to control it

 

There is a theme too of original thinkers being able to facilitate, but not will, creative outcomes. Gardner noted:

The creative process is often not responsive to conscious efforts to initiate or control it. It is unpredictable, digressive, capricious. The role of the unconscious mind in creative work is substantial.[150]

Drucker held that “innovative opportunities do not come with the tempest but with the rustling of the breeze.” At the same time, Drucker declared: “Successful entrepreneurs do not wait until the muse kisses them. They go to work.”[151] In other words, among successful practitioners of this skilled craft, the technical work continues as does the guiding purpose of leverage.

 

d. For the Innovation and Entrepreneurship Purpose --

The practice of innovation and entrepreneurship represents one application of the overall framework of paradigmatic imagination reflected above. Again, within the context of Ken Robinson's notion of combining "the evaluative and the generative," innovation's medium of expression for this combination would be offerings.

 

The purpose of resource leverage and the form of offerings affects which “parts on the table” are relevant to connections regarding new value to customers; it affects which knowledge is pertinent. The purpose and medium may also color aspects of the innovator's version of creative (cognitive) processing. However, it seems more likely that the distinction rests mainly with the innovator's integration of generally creative processing with innovation's distinctive purpose and distinctive strands of pertinent knowledge.

 

For example, whether applied to science, invention, or innovation, Steven Johnson uses the term “exaptation” to describe the detection of a fruitful new connection for one domain based on borrowing an example from another domain. The Ten Faces of Innovation labels this approach to innovation's purpose as "cross pollinating," and Gary Hamel noted that is natural for industries to move at different speeds and natural to observe and borrow from others’ examples. As an example, food writer, Mark Bittman, invoked the model of taxing cigarettes within an argument for taxing unhealthy food to promote public health.

 

Further, a Harvard Business Review article on “The Innovator’s DNA” (followed by a book with the same name) emphasizes the innovator’s practiced “discovery skills” in association with combining elements of disparate venues -- the more diverse the knowledge the more connections. The article argues that insightful connections are generated from “discovery drive” and “discovery skills” associated with broad knowledge: questioning, observing, experimenting, and networking .[154] (It would be interesting to know if a similar drive and skill are associated with new connections within hypotheses for science and invention.)

 

Other themes, such as "observation" and "diagnosis," are similarly associated with innovation's medium for combining the evaluative and generative and may similarly be a matter of integrating this type of processing with innovation's purpose and knowledge strands:

Observation is associated with an orientation of looking “outward,” which encompasses observation of customers, the marketplace, general societal trends and dynamics, and more. Zell described that entrepreneurs are “extraordinarily observant.”

 

Observation could include looking across domains, as with exaption, or association. However, the successful practitioner’s observation is described also as sensitive to what Roger Martin and Sally Osberg termed "suboptimal equilibrium." Perception includes skill at “seeing” (evaluating) when an operation is or isn’t broken, when it could be much better (as one of Zell's examples), when there is a gap or incongruity or missing link in functioning (within Drucker's examples of innovation's limited set of sources), when there is positive deviance that could be developed, and so on.

 

Drucker linked observation to diagnosis, depicting innovation’s combinatorial processing as “diagnostic” and “perceptual fully as much as conceptual.”[153] Nicholas Lore identifies "diagnostic reasoning" as a form of problem solving based on "the ability to leap to accurate conclusions without using a logical, step-by-step approach"; rather, it involves "quickly seeing a relationship between apparently unrelated facts." Others refer to lateral, rather than linear, processing. (Lore contrasts diagnostic reasoning with "analytical reasoning."[153-1])

 

Drucker associated innovation's diagnostic processing, or leaps, at least partially, with a sensitivity to systems. In a 2010 publication, the Drucker Institute quoted Drucker:

The characteristic of the innovator is the ability to envisage as a system what to others are unrelated, separate elements. It is the successful attempt to find and to provide the smallest missing part that will convert already existing elements.[152]

"Finding" plus "providing" reflects the combined evaluative and generative. Like medicine, innovation's leaps involve both diagnosis and treatment. An hypothesized new value proposition in the form of an offering embodies both diagnosis and treatment. And innovation's versions of processing may feature this linkage, at times seemingly fused and at other times beginning with "partially formed" ideas, which may be processed “in the shower” and beyond.

 

Models and Tools

Observation linked to innovation's purpose is thematic within innovation's scaffolding. On a "tutoring" basis, the McKinsey consultant who hired Drayton commented on a training of the eye that he received from Drayton, which involved a sensitivity to innovation's purpose of resource leverage (and implicitly to pertinent knowledge):

He taught me to look for the non-obvious ways to gain leverage times ten on an issue.[155]

Such tutoring seems similar to the account of the observation-oriented medical apprenticeship that led Sir Arthur Conan Doyle to invent the character of Sherlock Holmes, rather than practice medicine. In both cases there is an account of teaching purposefully discerning observation and perception.

 

Similarly, beyond tutoring, models and tools for generating innovation hypotheses emphasize guidance linked to innovation's distinctive integration (of purpose, knowledge, and processing) or to elements of the integration. The tools address thematic innovation practices such as purposeful observation and diagnostic reasoning. For example, Clayton Christensen proposes viewing customer needs through the lens of the jobs they need to get done. Drucker held that all innovation results from one or more of seven “symptoms,” which can and should be actively observed and monitored. Goldsmith identifies four “discovery methods” within the context of the social production system for identifying a catalyst for transformative change.

 

IDEO’s design thinking process begins with a brief of a problem to be addressed and emphasizes observation that is empathetic and includes “”watching what people don’t do and listening to what they don’t say.”[156] Then it builds on this approach to detecting opportunity with processes for designing an effective treatment. The more interdisciplinary the team involved (not multidisciplinary, Brown emphasizes), the better the prospects for hypotheses that represent high-leverage opportunities.

 

With Prahalad and Krishnan’s model of “N=1; R=G,” the “glue” that enables applications of the model to work is commitment to structured processes of continuous analytics, featuring observation applied to quantitative data:

Competitiveness favors those who spot new trends and act on them expeditiously. Managers must develop insights about new opportunities by amplifying weak signals.[157]

At this quantitative end of the observation spectrum, the modeling of complex systems may represent another emerging tool associated with innovation methodology.

 

Further, intellectual capital’s three primary forms illustrate the blending of tools: “Customer capital” focuses upon mutual learning between customer and practitioner, oriented to qualitative methods. “Structural capital” organizes and distributes strategically collected data for:

• rapid knowledge sharing
• collective knowledge growth
• shortened lead times
• more productive people[158]

And “human capital” denotes human resources possessing both pertinent knowledge and innovation capability, including capability in generating and using customer capital and structural capital.

 

In selecting and using models and tools, it seems likely that both selection and use would benefit from consciousness of the fundamental principles of innovation that are being supported. Further, the tools could help cultivate deepening understanding of the principles.

In describing its creativity-seeking culture of "freedom and responsibility," Netflix describes that the most creative people are ten times more effective than the average creative person. In an ingenuity epoch, it matters to shift the overall distribution of creative capability.

Innovation models, frameworks, and tools can guide and foster the powerful fundamentals of innovative practice. And increasing mastery of fundamentals, rooted in literacy, could support robust use of models and tools, including discerning selection of models and tools and effective assimililation of emerging resources.

 

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