[...] radical innovations do often come from people who don’t know what has been or can’t be done. I once had a student who worked as an earlier employee at Invisalign (those clear braces that replace the ugly wire things), and he told me that none of the members of the original design team had any background in traditional braces or dentistry.

He goes on to mention specific benefits of ignorance, particularly when you are dealing with a well-worn domain of knowledge.

I am generally sympathetic to this argument, given the importance of “social bumping” (the unintentional exposure to diverse ideas and perspectives) to problem solving and creativity.  Think about the radical innovation in the music and mobile communications industries brought about by Apple.  Radical change did not come about by sticking a bunch of industry veterans in a room and asking them to rethink the very foundation of their business.  It came because smart, talented people on the outside reconceptualized those industries.

I especially like Sutton’s suggestion that companies think of problems in terms of their general type instead of the specific industry they are in.  So rather than assemble a team of seasoned experts in retail apparel to solve the problem of declining market share in the face of lower priced competitors, you would assemble individuals who have grappled with the general problem of lower priced competition in multiple industries and domains.  The idea here is that other approaches may have been successful outside of the retail industry that are nevertheless applicable.  Since these solutions come from outside of retail they could represent a “radical innovation” once imported, giving a company a significant advantage (at least in the short term).

This isn’t to say that domain expertise is worthless or counterproductive.  I think the distinction can be made in terms of incremental change and radical change (which Sutton makes in his Weird Ideas That Work)–similar to Kuhn’s distinction between normal science and revolutionary science.  In the incremental area, domain expertise is quite helpful and the distribution of domain expertise to ignorance should be weighted towards the former.  When it comes to radical change (or what Sutton might term radical innovation), however, that distribution needs to shift to at least 50/50, if not skew more heavily towards ignorance and outsiders.  Often times companies manage this by creating separate work streams for normal and innovative operations, with Research & Development fitting into the latter area.  The trick is to not wall-off normal and innovative folks.  Complete separation means you will miss opportunities to mix the two knowledge bases together.

Creative teams made up of both incumbents who knew each other and newcomers who didn’t, however, were more likely to produce hit shows. Uzzi says that’s because teams with too many overlaps in their social networks are less creative — the team members all know the same stuff. Teams that aren’t networked at all, however, aren’t good at sharing what they do know. The most successful teams were those in which everyone knew one or two others but not everyone — and not no one.

Moreover, innovation and creativity are more likely to blossom when people are exposed to various ideas and knowledge that are outside of their narrow expertise.  This is more likely to happen in a network with a higher percentage of weaker ties, versus overlapping redundancy:

“Creativity depends upon a person’s ability to take ideas and information that may be well understood in one area and bring it into a new area where it’s suddenly received as invention,” Uzzi says. Therein lies the productivity potential of social networks — they take whatever useful material is circulating and put it together in new ways. “Much of creativity is just new combinations put together from different pieces of information and material,” Uzzi says. “That’s how networks can really amplify creativity.”

For that reason, Uzzi suggests that organizations subvert the “proximity principle,” or people’s tendency to create networks from those around them. “The problem with the proximity principle is it tends to create homogeneous networks that lack diversity,” Uzzi says. “To undo the proximity principle . . . locate people from different specialties in the same area rather than keeping all specialists located near each other.”

Bottom line: businesses should think about how to optimally organize their workers for innovation.  Critical to this is encouraging what I would term “social bumping“–the process of being exposed to new and diverse ideas on a frequent basis.  If work environments are organized in such a way where workers only interact with people they share strong ties with they are less likely to be exposed to new and diverse ideas (since those we share strong ties with typically have access to the same knowledge and interests as we do).  The key is to leverage–and increase access to–the weak ties of workers, since these ties are the pipelines of new and diverse knowledge.  As mentioned in an earlier post, this can include helping people build diverse social networks, promoting the co-mingling of various subject-matter experts (e.g. internal rotations, inter-firm collaborations), leveraging social network technologies that encourage broad reading and sharing of knowledge (particularly the knowledge that flows from weak ties), and encouraging people to share their ideas and perspectives when they might otherwise feel as though it wasn’t their place to speak up.

The first question, of course, is whether an offensive or defensive system could be subject to copyright.  The authors say it’s plausible:

Indeed, in the 1980s, James R. Smith applied for a copyright on his “I-bone” offensive formation (he claimed that the formation was equivalent to choreography and therefore copyrightable).  We can find no record showing that the U.S. Copyright Office granted registration (although they did grant a copyright to a book describing the I-bone).  Patent protection extends to new and useful “systems,” and a well-developed football offense might be characterized this way.  It might also be characterized as a “method of doing business” — a category of inventions which are also patentable (with some restrictions) under U.S. law.  So intellectual property law might conceivably step in, but it never has.

So if it is feasible, why hasn’t it been done?  The authors offer three reasons:

First, the stories of football innovation often involve coaches that are struggling to find a way to win with players of inferior talent.  Effective innovation may be the only way to level the playing field, at least temporarily.

Second, football coaches are incredibly short-term thinkers.  The rewards of winning are immense — one Super Bowl victory makes a career — and this means that they are focused on winning now, and less deterred by the prospect of losing their edge over the long term.  An innovation that gives any advantage — even a temporary one — is worth exploring.

Third, even though there are no protections against copying in the long term, there are practical barriers that prevent immediate copying and ensure a short period during which the innovator can’t be imitated.  Innovative plays and formations can be copied relatively quickly. What’s far less quick is the process of rebuilding a team to take advantage of the innovation.  Employing any complex formation requires players to be retrained.  Often, it requires a different type of player too — the spread offense favors smaller, speedier offensive players and places less emphasis on enormous offensive linemen. (i.e. first-mover advantage).

All three of these sound plausible, but my question is why are they focused on coaches?  Each coach develops their schemes while under the employ of a team.  They leverage team resources to develop the schemes, they test them at practice and during games using players, coaches, and equipment paid for by the team, etc.  Even if the coaches are focused on the short-term (although this varies based on the length of their contracts and where they are in those contracts), teams are more likely to focus on the long-term.  Teams build their roster based on the needs of the particular schemes developed by the coaching staff.  They then invest large sums of money over multiple years in players that fit those schemes.  It strikes me that a monopoly on that scheme for a period of time would be quite advantageous to those teams.

I’ve written about this topic previously, and Ridley’s perspective lies fairly close to my own.  We tend to think of ideas as 1) creations of single, brilliant individuals, and 2) unique in history, rather than derivative.  Narratives of great discoveries suggest that ideas are created de novo from individual minds.  However, if we take the time to deeply explore many of the greatest breakthroughs in science, art, etc, we find that the greatest ideas are the result of communities of thinkers and their combination, in unique and creative ways, of pre-existing ideas.  To use Ridley’s metaphor, communities take existing ideas and breed them.  That reproduction results in mutations and recombinations, which create a new species of idea that is superior to existing populations of ideas that we all then benefit from.  Knowledge creation has an evolutionary and communal character to it.

It further reinforces the importance of creating conditions that facilitate the intellectual transmission of diverse ideas and perspectives (what I’ve called “social bumping“).  This can include helping people build diverse social networks, promoting the co-mingling of various subject-matter experts, and encouraging people to share their ideas and perspectives when they might otherwise feel as though it wasn’t their place to speak up.  As Ridley says during his talk, “We all know little bits, but none of us knows the whole.”  Given that is the case, we would be wise to design an environment that maximizes the mating of diverse ideas.

Today we take these words for granted, along with the notion that people have the right to overthrow a tyrannical government and decide for themselves how they would like to be governed.  And even while the ideas were not utterly original at the time, the formal declaration of them and the subsequent revolution that was launched against the world’s mightiest empire was.  It was an amazing example of innovation and entrepreneurship in the political and social realm.  Certainly, the revolution and subsequent founding of the United States has been subject to the famous dictum “when the legend become fact, print the legend“, but even after we peel back the mythical veneer we find a history that is both impressive and impactful.

It is hard to imagine how different the world might look today had these 56 men not affixed their signature to this declaration.

Happy 4th of July!

The work in this paper and that of many others, suggests that this traditionally-struck ‘devil’s bargain’ may not be beneficial. First, there is increasing evidence that intellectual property protection does not increase innovation. As we saw in section 2.2, studies carried out over 40 years do not find that firm managers are inclined to increase their innovation investments due to the availability of patent grant protections. There are also many examples in which strong intellectual property rights may have impeded subsequent progress (Dosi, Marengo and Pasquali, 2006; Merges and Nelson, 1994). Indeed, recent empirical work has actually shown a negative relationship between patenting and subsequent progress in both biotechnology (Murray and Stern 2007) and software (Bessen and Meurer 2008). Second, the ascendent user and open collaborative innovation models that we have discussed in this paper mean that alternatives that are open by participants’ free choice — and to the economic benefit of those participants — are now ascendent alternatives to the traditional, closed producer innovation model. And openness, as we noted above, increases social welfare, other things equal.

I love counter intuitive research like this.  I am not sure if I completely buy it, but I love that it problematizes a foundational assumption about the creation and subsequent growth of modern economies and technological advancements.  It’s always good to challenge our intellectual sacred cows from time to time.

My first reaction is that they might be right, but I don’t think the observation that not all innovation is driven by the desire to monetize an invention invalidates or throws into serious question the value of patents and intellectual property rights.  To be sure, many innovations that have come out of the private sector were the result of internal problem solving that leads to a marketable product.  However, without the ability to patent and monopolize that technology for at least some period I wonder whether companies would be so quick to commercialize these internal innovations.  It costs a significant amount of capital and resources to commercialize an asset.  Regardless of the motive, the market may be deprived of some new technology because a company determines that it will cost too much for an uncertain return without patent protection to sell the product.  Additionally, what’s to stop their competitors from adopting the technology to not only sell, but to solve what is likely a similar, internal problem?

I’ve got to go back and dig into the article more–lot’s to chew on with this topic.

It reminded me of a concept I’ve been toying with for a while–free-rider businesses.  Mancur Olson discussed the problem of free-riders and the incentives that produced them in his classic The Logic of Collective Action.  Large groups have trouble creating public goods since each individual has an incentive to free ride on the efforts of others (since the good is non-excludable, meaning there isn’t a practical way to prevent specific individuals from benefiting from the public good once it’s produced).  In many instances there will be individuals or small groups that have a large enough incentive to create a particular good, thereby creating the opportunity for their work to be exploited by free-riders.  My thought was that there are some business that are free-riders, or at least benefit from this practice.  Free-rider businesses are those that develop a product or service that relies in some significant way on the physical resources or creative content produced by others without providing compensation to those third parties or having helped create the resource or content themselves.  In most cases, the third party resources serve as a critical input (sometimes even the main content) for a firm’s key product or service.  The most obvious example of this type of firm is Google.

The core of Google’s business is to mine, analyze, and organize the massive amount of content produced by third parties on the web. In this way they are dependent on others to create a critical input, an input that they don’t pay for (Ed. although, the recent deal with Twitter is an exception to the rule). Media mogul Rupert Murdoch has publicly characterized the practice of news aggregators and, in particular, Google’s use of this content as “theft”. One can easily scan the Internet and stumble on other examples.  Certainly the explosion of data and content that the Internet has facilitated creates an environment that is quite conducive for firms of this type.

The Airnergy product, on the other hand, would be an example of a free-riding device that relies on some kind of physical input or infrastructure. Airnergy is leveraging a preexisting infrastructure built and maintained by third parties who, to my knowledge, would not be compensated for the use of their WiFi networks. It’s as if the WiFi networks have become a massive public good that, after being established by a small group of actors that had a greater interest in their existence, can now be leveraged by all sorts of players free of charge. (I am still trying to figure out how this is not illegal.)

Noah and I tried to think if this was a trend unique to this time period or if there were historical analogs. We couldn’t come up with one at the time, but after some reflection I can think of a couple.

One would be the automobile industry. While manufacturers do not leverage some kind of input for their product they do rely on the physical infrastructure that makes car travel possible (i.e. roads, bridges, etc.). However, the difference here is that the physical infrastructure they rely on was established and is maintained by the government, who funds that work through taxation (which automakers must pay).

To be fair, the term has somewhat of a harsh connotation, and I certainly don’t mean it to. I’ve been struggling to come up with a term that more accurately reflects the relationship I’ve been thinking about. These businesses do provide something of value (to consumers, if not to the source of those inputs or the greater society at large). Additionally, these businesses are developing their own unique and innovative offerings that happen to leverage these inputs. For example, no one questions the innovative value of Google’s PageRank or the utility of LinkedIn or Facebook.

As I said, it was an idea I have been toying with and I am obviously still trying to work through the logic.  Would be curious to hear others thoughts on this.

When Robert Menschel, a senior director at Goldman Sachs Group Inc., was considering deals involving large consumer companies such as Procter & Gamble, he would pick the brain of fellow club member Ed Meyer, the former chief executive of Grey Advertising.

“We were all young kids starting out, and it is easy when you are so involved in building your career to lose touch with other people who are outside your field,” says Mr. Menschel, who has been at Goldman Sachs for 55 years. “It helped me to understand why other people do what they do—which is important in life and in business. You don’t learn anything from talking to sameness.”

The Wednesday 10 comprised, at various points, more than 20 men; the goal was a number small enough to maintain intimacy yet large enough to ensure that at least 10 members would show up for each of the monthly Wednesday-night meetings. No more than two representatives of any one industry were permitted. The idea was to combat insularity, to keep the men connected to people and events outside their own professions.

The engineering of the group is particularly interesting: keep the group small enough so members could develop some sense of intimacy, but large enough to ensure decent and consistent attendance; and ensure that no single industry was overrepresented.  By ensuring diverse membership the group could benefit from an exposure to ideas and viewpoints from outside their day-to-day professional circles.  Additionally, the members would invite guest speakers for each session, further benefiting from a diverse membership that could tap into various experts from all sorts of fields.

There are, of course, questions to what extent the group succeeded in maximizing diversity and guarding against sameness.  However, the fact that these individuals in late 1950 were cognizant of these issues and tried to guard against them by organizing the group in a specific way is quite impressive and instructional for folks living in the age of social media.

Now Helprin does make some valid points; however, I think on balance the conclusions he reaches about new technologies and techniques is overblown and based on his own biases and misunderstandings.  I’d like to speak to a few of them below:

Mark Helprin (MH): Before there was copyright, there was very little incentive for people to actually write things and assemble information. With the development of copyright, all that has increased.

I agree with Helprin here and there is quite a lot of excellent research (particularly by economic historians like Douglass North) to back up the notion that the institution of copyright and associated legal protections such as property rights, patents, etc, led to an explosion in creativity and economic development in the Western world.  So, point for Helprin.

Mary Kuntz (MK): [...]  There’s a lot of activity online right now that’s all about collaboration and crowd sourcing. And some of what gets produced that way people call art. I gather that you would take issue with that?

MH: I would. Crowd sourcing—to me, the words are a nightmare. The great achievement of Western civilization, anyway, has been to end the collective approach to things that marked the early history of man.

In other words, you were defined as part of a group. You were a serf. You were a peasant. You were a slave or whatever. And then in medieval times, you were a member of a guild. And the rights of the individual didn’t really count. What happened with the Greeks and then with Roman law and then over a long, long period culminating in modern times is that we have refined the rights of the individual. Now, obviously collaboration can be very powerful, and it’s important, and we do things in concert with one another. And we advance science that way and many things. But there’s really nothing that can substitute for one mind and one voice.

In a single thought, Helprin does two things: 1) illustrates that he does not truly understand crowdsourcing, but sees it as a threat anyway (and he is surely not alone here); and 2) his entire premise (“nothing can substitute for one mind and one voice) is based on a myth (that of the lone or heroic innovator/creator), one that is contradicted by the two sentences immediately preceding it.

First of all, Helprin’s conceptual connection between crowdsourcing and collectivism is utterly misplaced and flatly wrong. Just because a process or endeavor involves input and cooperation amongst a large number of people it does not mean that one is backsliding against the liberalization of society. I guess Helprin thinks we should disband all those pesky corporations that publish and ship his books, as well as those retail chains that put them in the hands of readers. The brilliance that is Helprin would be the proverbial tree falling in the woods with no one to hear if not for the collective efforts (ideas, labor, etc) of numerous individuals. All crowdsourcing does is provide an alternative (and, in some cases, a better) method for organizing individuals to tackle a collective task or to gather input and insights necessary for the accomplishment of some goal. There is no requirement that by taking part in crowdsourcing one must give themselves over to some collective identity. In fact, many people who participate in crowdsourcing do so during their spare time, and as an alternative to their 9-5 occupation (as Jeff Howe has noted, the process taps into people’s spare cycles). One might argue that crowdsourcing actually provides people with greater outlets for creativity, since those that are electrical engineers by day get a chance to solve complex design problems that have baffled bench chemists at Fortune 500 companies.

Second, Helprin falls into a familiar trap which is basing his argument on the notion that great creativity and discoveries is the result of single, heroic individual. This is hardly the case and there are piles and piles of research illustrating how collaboration is key. Helprin himself notes that advances in, for example, science are dependent on intra- and inter-temporal collaboration. We are better able to tackle complex problems when we have the benefit of diverse input. Additionally, our ability to create and come up with advancements is always dependent on previous work (“standing on the shoulders of giants“) and leveraging or combining creations by others. Scott Berkun, in his wonderful Myths of Innovation, sums it up well:

It wasn’t until the 1500s and the rise of the Renaissance that Western cultures grew comfortable acknowledging people’s creative abilities and individual achievements.

[...] Today, years away form the Renaissance, we’re still attached to the myth of the lone inventors. We do recognize collaboration and partnerships, but we often fall back on tales of lone innovators as heroic figures for reasons of convenience. We insist on isolating credit and dismissing the importance of others. Patent law, by design, credits one or a handful of individuals, assuming not only that ideas are unique and seperable, which is dubious, but that individual names can be given legal ownership of ideas.

Helprin didn’t invent the English language, the novel, the short story, various themes used in his work, and I guarantee that he has on more than one occasion drawn inspiration directly or indirectly from the minds and works of others. To paraphrase Keynes, in the long run everything is derivative.

What cinches Helprin’s lack of perspective for me is this exchange:

MK: Well, let me ask you something. This is just a hypothetical. What if you were working on a new novel and you got stuck on the ending, you just couldn’t find a way to wrap it up and make the plot work. And let’s say you put the problem to a wide following of smart, engaged, intelligent Mark Helprin fans. And one of them or several of them working together came up with the perfect solution. And you used their idea, which, in fact, was better than anything you would come up with. Would the novel that resulted be any less valid?

MH: I don’t know what you mean exactly by valid. But what I can say is I would never do that. If you look at the history of literature, it’s never been done that way. In school, they have what they call “brainstorming,” which I think is a comic-book word. They have what they call “writing webs.” They sit and they criticize each other’s writing, sort of like people in the Soviet on a factory floor.

And this is not the way that it should be. And I guarantee you that the product of this will be far, far less valuable than the product of somebody straining to do his best and taking responsibility for it also.

It’s never been done, so why bother; brainstorming is akin to forced collectivization under the Soviets; and he knows for sure that nothing ‘collectively’ produced could be as good as something produced by an individual.

There’s lots more there so I encourage you to read or listen to the entire interview. As I said, there are moments where Helprin makes solid points (points I agree with), but to say I disagree with his view on crowdsourcing, social technology, and innovation would be a massive understatement.

At the Institute for Marine Mammal Studies in Mississippi, Kelly the dolphin has built up quite a reputation. All the dolphins at the institute are trained to hold onto any litter that falls into their pools until they see a trainer, when they can trade the litter for fish. In this way, the dolphins help to keep their pools clean.

Kelly has taken this task one step further. When people drop paper into the water she hides it under a rock at the bottom of the pool. The next time a trainer passes, she goes down to the rock and tears off a piece of paper to give to the trainer. After a fish reward, she goes back down, tears off another piece of paper, gets another fish, and so on. This behaviour is interesting because it shows that Kelly has a sense of the future and delays gratification. She has realised that a big piece of paper gets the same reward as a small piece and so delivers only small pieces to keep the extra food coming. She has, in effect, trained the humans.

This kind of learning and ability to design innovative strategies to maximize payoffs is amazing.  I know humans that can’t think this strategically.

Be sure to read the entire article.