The Study of Innovation – A
Mythic Quest
Liisa Välikangas
Director of Research
Strategos Institute
Berkeley-Finland Day, October 18, 2002
The Quest (1): Escaping the cold
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The Quest (2):
Fighting the windmills
Cervantes: Don Quixote
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The Quest (3): Making money
Why did Sancho Panza follow Don Quixote?
Don
Adventure
Sancho
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The Quest (4):
Orbiting the giant hairball
Gordon McKenzie
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What I will talk about:
• Myths related to innovation as
management practice
• Quests related to research on
innovation
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Myths of Management Practice
1. The case for innovation can be made
financially and a priori.
2. There is a “clean” solution (a process or a
structure) to the problem of innovation.
3. You get what you pay for, including
innovation.
4. There is a (qualitative, manageable)
difference between winners and losers.
5. Failure disqualifies an innovation.
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Myth 1. The case for innovation
Q: “We are thinking about making our company
more innovative. Can you tell us, however, how
we can measure the value innovation creates?”
A: “Happy to do that. Can you tell me first,
please, how you currently measure the value
your HR, legal department, and top
management creates annually?”
(They don’t call back.)
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Myth 2. There is a “clean”
solution
Staff
member(s)
submit an
idea as a
proposal.
Proposal is
rejected.
Proposal is
rejected.
Project is
abandoned
Project is
abandoned
Project remains
uncommercialized
No
No
No
No
No
Does initial
GC screening
panel accept
proposal?
Does extended
GC panel
accept
proposal?
Does project
pass through
tollgate
meeting?
Does project
pass through
tollgate
meeting?
Does business
unit want to
commercialize
project?
Yes
Yes
Yes
Yes
Yes
Project transfers
to business unit.
Maybe
Test and Mature Phase:
Project team addresses
issues raised by
screening panel.
Action Lab(s)
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Myth 3. Pay for innovation
• “If you put too much emphasis on financial
rewards, greed takes over.” Leo Roothardt,
Shell GameChanger
• “People engage in radical innovation not
because they get paid for it, but because they
want to.” Gene Meieran, Intel Fellow
How do you pin the shadow of the future on
the Invisible Hand?
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Myth 4. You can tell a winner by
looking at it
The Null Hypotheses:
“Tim Draper is wrong in 99.99% of cases but
when he is right, he is really right.”
The difference between innovative and notso-innovative people is that the successful
ones try more often.
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Myth 5. Failure (yes, there are
some bad ideas)
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Myths in Innovation Research
1. Researchers and practitioners have
interests in common.
2. Describing corporate realities is
straightforward.
3. We have a theory of organizational
value creation.
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Quest 1. Rigor and practice
We know a lot more about what
managers ought to do than what they
are actually doing.
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Researcher and Practitioner Articles
Survey of Two Management Journals
(November 2000 to October 2002)
30.0%
25.0%
Percentage
Emphasis Among
Seven Most
Frequent Topics
20.0%
15.0%
10.0%
5.0%
0.0%
Le
i
sh
r
e
ad
p
n
I
nn
tio
a
ov
m
Hu
c
Harvard Business Review
an
s
ce
r
u
so
e
r
tw
Ne
ks
or
n
ig
es
z
ni
a
g
Or
a
na
it o
ow
Kn
ld
le
/
ge
le
ni
ar
ng
n
ou
b
/
rie
a
d
s
d
Administrative Science Quarterly
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And the answer always is….
Thinking out-of-the-box
A long-term view
Trust
Motivation (and commitment)
A license to fail small
An external (customer) focus
Courage
Leadership
Time
A common vision
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Quest 2. Whose reality?
An employee?
A PhD student?
A professor?
A journalist?
A consultant?
A case writer?
A best-selling
author?
A manager?
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Warning: An advertisement
Strategos Institute is building a professional
research organization that studies
management-as-is yet seeks to contribute to
its further development. In our view:
• Organizations would benefit from management
practice that is more innovation-friendly.
• Management research would benefit from studies
that are less institutionally indebt.
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Quest 3. How do organizations
create value?
• By exploiting labor
• By getting a discount (Save 30%!) relative to a
market transaction
• By specializing, coordinating, and taking risks
over time
• By sustaining institutions and social structures
that make life and work (sometimes)
meaningful
• By sustaining complex relationships and
investments over time so that innovation can
mature
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Innovation is not enough: The
challenge of renewal
Innovation as experimentation is
relatively well understood.
Connecting innovations to core business
competencies, assets, and infrastructure
is not well understood (within the
existing organizational context).
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Call for Innovation Research
Need research that is:
1.
2.
3.
4.
5.
Rooted in management capability
Seeking to advance management practice
Theoretically informed, conceptually enlightened
Empathetic to the practitioner
Addresses the continuous negotiation between
change and continuity in a firm
6. Adds to our understanding of how firms create
value
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Contact information:
Dr. Liisa Välikangas
Director of Research
The Strategos Institute
lvalikangas@strategos.com
1 650 233 1100 ext. 239 (or 1 650 851 2095)
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