Innovation and Human Capabilities

John Steen wrote a series of  posts on why experts and crowds usually miss disruptive innovation and how to use networks to tap expertise and knowledge. I’d like to expand these thoughts a bit more towards the question: what’s the role of human capabilities in innovation? For elaboration, I’m going to combine two concepts I’ve recently come across:

In a terrific post, Nicholas M. Donofrio, Kauffman Senior Fellow and retired EVP of Innovation and Technology, IBM, comments on the need for transformation of human innovation capabilities:

“The innovation that matters now – the innovation that we’re all waiting for, even if we don’t know it – is the one that unlocks the hidden value that exists at the intersection of deep knowledge of a problem and intimate knowledge of a market, combined with your knowledge, your technology, and your capability … whoever you are, whatever you can do, whatever you bring to the table.”

“The kind of people who will be best able to seize these opportunities are those I call “T-shaped” as opposed to “I-shaped.” I-shaped people have great credentials, great educations, and deep knowledge – deep but narrow. The geniuses who win Nobel prizes are “I-shaped,” as are most of the best engineers and scientists. But the revolutionaries who have driven most recent innovation and who will drive nearly all of it in the future are “T-shaped.” That is, they have their specialties – areas of deep expertise – but on top of that they boast a solid breadth, an umbrella if you will, of wide-ranging knowledge and interests. It is the ability to work in an interdisciplinary fashion and to see how different ideas, sectors, people, and markets connect. Natural-born “T’s are perhaps rare, but I believe people can be trained to be T-shaped. One problem is that our educational system is still intent on training more “I’s. We need to change that.”

There are two consequences out of that: I-shaped experts need to transform towards T-shaped in order to thrive in the future. Moreover, companies need to align human resources and structures, so that the overall organization is able to act T-shaped.

Excellent posts by Tim Kastelle, Paul Hobcraft and Sheldon Laube have been published on the concept of the three innovation horizons – each of them is very worth reading. In this framework, Horizon 1 defines the current business, Horizon 2 a related business and Horizon 3 a completely new business that could disrupt the existing business. All of the authors conclude that skills and approach are different for each of the innovation horizons. This also affects the profile of deployed human innovation resources. As we move along the innovation timeline from Horizon 1 towards Horizon 3, a primarily I-shaped capability needs to change in favor of a pronounced T-shaped skill.

Let’s have a look at the three stages and required human innovation capabilities:

Horizon 1 represents the company’s core businesses today. It involves implementing innovations that improve your current operations. People most familiar with the needs of the existing customers and deployed technologies are in the best position to identify opportunities for incremental improvements. Here, experts with a deep knowledge in their respective field of activity are valuable and mandatory to drive these improvements. Incremental innovation is linked to current domain as it optimizes the already existing. It’s primarily related to further deepening existing knowledge and expertise in the current field of business activity.

Horizon 2 includes innovations that extend current competencies into new, related markets and/or technologies. Novel market/technology combinations require a connection of knowledge from diverse fields and functions. In addition to deep expertise in the respective fields, the integration of these knowledge domains gains of importance. Integrators need to be comfortable with acting at the intersection of disciplines and knowledge domains. These knowledge brokers are not just multidisciplinary and socially adaptable, but also exhibit other special psychological traits. They are highly effective in bridging clusters/silos and leverage knowledge flows and connections. According to Rowan Gibson, organizations often fail to implement those bridging structures:

“There are fixed reporting lines, committee groups, task forces, and so forth. Companies tend to consign innovation to a small cadre of ‘experts’ in specialized departments, and they end up having the same people talking to the same people, year after year, so they lose that conversational richness. In many ways, the organizational chart actually inhibits rather than increases the chances of making random, serendipitous connections.”

Horizon 3 consists of nascent business ideas and opportunities that could be future growth engines. These innovations have a potential to change industries and disrupt markets. In order to tap this potential, a further capability is required: the ability to question assumptions and to take different angles. Experts tend to assign too much weight to their own viewpoint and seem to be less able to adjust to, or even consider, other perspectives. Or as John Steen puts it: Expertise is valuable, but it also comes with a cost in terms of existing commitments to old ideas. In an excellent post Don Sull comments on this phenomenon:

“The human mind is hard-wired to reinforce existing maps, even in the face of dis-confirming evidence. Psychologists have documented a depressingly long list of cognitive biases that distort how people process new information and prevent them from noticing when established mental models break down. The “confirmation bias” refers to our tendency to notice data that confirms existing assumptions, and while ignoring or discrediting information which challenges our assumptions. When faced with data that doesn’t jibe with existing assumptions, people typically ignore it, discredit it, or force it to fit their model.”

He further suggests to increase the odds of spotting opportunities by exploring anomalies, or surprising outcomes that deviate from what is expected to happen. Anomalies may signal an external shift or indicate where initial assumptions are wrong.

Along the three horizons of innovation, the requirements for human innovation capabilities change. While common I-shaped experts are predominant for exploiting the current business (Horizon 1), they need to be enriched by complementary skills for exploring activities (Horizon 2 and 3). More radical innovation requires structures enabling knowledge flows, rather than keeping knowledge stocks. Crucial human capabilities concern making novel connections of ideas, the ability to overcome myopia as well as the integration of different angles. In addition to conventional experts, more T-shaped innovators are crucial to bridge and connect domains. Moreover, they are supposed to have the skill to create new meanings by combining diverse perspectives and questioning the status quo.

Tim’s Note: Ralph is a major contributor to the discussion of innovation on twitter. Several of us have been encouraging him to start writing more about it, because he has a great combination of theory and practical experience in the field.  We’re very pleased that we’re able to host this post by Ralph.