Conference PaperPDF Available

Escaping Gravity: Facilitating Disruptive Innovation in an Operate & Maintain Organization

Authors:
  • ETS, Princeton, NJ

Abstract

In his discussion of innovation at companies like Educational Testing Service (ETS), which have come to focus on “operate and maintain”, ETS’s VP and CLO T.J. Elliott describes how the non- profit organization has embraced three types of innovation knowledge: common language, innovation know- how, and mutual, reflective learning. He explains that it takes a radical dedication to these three knowledges to “escape gravity”. ETS’s innovation efforts are building its capacity to participate intentionally in all the dimensions of innovation, and to continue learning as an organization.
Smarter Innovation 01 Elliott 071114
EDITED BY KATRINA PUGH
Smarter Innovation: Using
Interactive Processes to Drive
Better Business Results
PUBLISHED BY
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III
Contents
Executive summary ................................................................................................................... IX
About the editor ......................................................................................................................XIII
Part One: Building an innovation ecology
Chapter 1: Escaping gravity: Three kinds of knowledge as fuel for innovation in an operate and
maintain company .....................................................................................................................3
By T.J. Elliott (ETS)
The gravity of success ................................................................................................... 3
A common language .................................................................................................... 4
Innovation know- how .................................................................................................... 7
Conclusion ................................................................................................................ 10
Chapter 2: Creating a culture of innovation ............................................................................... 13
By Jorge Trevino et al. (Quimmco)
QUIMMCO’s past, present, and future outlook ................................................................. 13
QUIMMCO’s foundation in knowledge management for innovation ..................................... 16
Social and operational integration: Striving to achieve cross- unit collaboration ........................ 16
Capabilities validation and development: Implementation of QUIMMCO Group’s 2020 vision . 18
A new way of thinking.................................................................................................20
Chapter 3: Knowledge accidents .............................................................................................. 23
By Herman D’Hooge and Debra Lavell (Intel)
The knowledge accident- prone individual ........................................................................ 25
Knowledge accidents in a culture of efficiency ................................................................. 26
Creating the environment for accident- prones ................................................................... 27
Outside- in ................................................................................................................. 27
Inside- in .................................................................................................................... 28
Desire to know, not need to know .................................................................................. 29
Invest in mindfulness .................................................................................................... 29
Physical space ........................................................................................................... 30
Chapter 4: Sitting in the white space ......................................................................................... 33
By Madelyn Blair (Pelerei)
Who were these special people who could live and thrive in the white space? ...................... 33
What kind of process helps us ordinary folks to sit in the white space? ..................................35
When innovation takes place in the white space .............................................................. 37
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Chapter 5: Four disciplines of a project team: Innovation DNA .................................................... 39
By Katrina Pugh (Columbia University)
The four team disciplines .............................................................................................. 39
From discipline to innovation ......................................................................................... 45
Getting started ........................................................................................................... 45
Part Two: Bridging
Chapter 6: Enabling the magic of generative conversations ......................................................... 49
By Erica Hansen (Columbia University, Intellectual Capital Exchange)
Setting the stage ........................................................................................................ 49
Know your people ...................................................................................................... 50
Know your topic ......................................................................................................... 51
Building trust .............................................................................................................. 51
Encourage open sharing .............................................................................................. 52
Session closure .......................................................................................................... 52
Facilitation and innovation ............................................................................................ 53
Case study: Facilitating the sharing across industries that drives innovation ............................. 53
Chapter 7: Broadli: Drinking my own champagne ...................................................................... 55
By V. Mary Abraham (Columbia University, Broadli)
How to find help ........................................................................................................ 55
How to connect ......................................................................................................... 56
Social capital and reciprocity ....................................................................................... 57
Broadli ..................................................................................................................... 58
Create a network of generosity ..................................................................................... 59
Chapter 8: Beyond netiquette: Discussion discipline drives innovation ........................................... 61
By Sheryl Skifstad and Katrina Pugh (Motorola Solutions/Columbia University)
Investing in collaboration to improve cycle time ................................................................ 61
Driving systems of collaboration to improve cycle time at Motorola Solutions .......................... 62
The four discussion disciplines ....................................................................................... 63
Initial analysis: Four discussion disciplines make a difference ............................................... 64
How can collaborative, online discussions improve time- to- market? ....................................... 66
Inclusion and translation for immediate innovation outcomes ................................................ 67
Integrity and courtesy for lasting community engagement .................................................... 67
Next steps for Motorola Solutions: Continuing to drive innovation through the four discussion
disciplines ................................................................................................................. 68
Next steps for research ................................................................................................ 68
Chapter 9: Emergence of the open collaborative community ....................................................... 71
By Karla Phylpo (Walden University)
Bridging organization .................................................................................................. 71
A radical idea: Open patents for community- based co- creation ........................................... 73
Understanding the need for personal self- fulfillment .............................................................74
Personas, worldviews, and values ...................................................................................74
Conclusion ................................................................................................................ 76
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Part Three: Social integration
Chapter 10: Effective meetings: The heart of innovation .............................................................. 81
By Robert Bogue (Thor Projects)
Too many meetings ..................................................................................................... 81
Meeting goals ........................................................................................................... 82
Do we need to meet? ................................................................................................. 82
Fundamental meeting skills ............................................................................................ 83
Advanced meeting and dialogue skills ............................................................................ 84
Dialogue mapping ...................................................................................................... 85
Measuring quality ....................................................................................................... 86
Conclusions ............................................................................................................... 87
Chapter 11: Innovation by design .............................................................................................. 89
By Susan Scrupski, Catherine Shinners, and Joachim Stroh (Change Agents Worldwide)
Introducing Change Agents Worldwide .......................................................................... 89
How we work, our practices ........................................................................................ 91
Network mindset and operating models .......................................................................... 92
Stewards, facilitators, leaders ........................................................................................ 95
The future of work ....................................................................................................... 97
Chapter 12: Thoughts in Progress ..............................................................................................99
By Jean Pagani (Monitor Deloitte)
Introducing Thoughts in Progress .................................................................................... 99
An extended conversation .......................................................................................... 100
Catalytic collaboration and reach ................................................................................ 100
Commercial impact and broad expansion ......................................................................101
Chapter 13: Innovation through the knowledge continuity process ............................................. 103
By John Hovell (BAE Systems)
The four steps of knowledge continuity .......................................................................... 10 4
The four roles that guide knowledge continuity ............................................................... 105
How to start knowledge continuity in your organization .................................................... 106
Result: Innovation, process improvement, and deep learning.............................................. 107
Part Four: Capabilities validation
Chapter 14: The benefits and liabilities of interacting for innovation: A quantitative model ............ 111
By Sheen S. Levine, Trish Gorman, and Michael J. Prietula (Columbia University/Deloitte/
Emory University)
The research: From field observations to a quantitative model ............................................. 112
The findings: When sharing benefits innovation; when it doesn’t .........................................115
To share, or not to share? ............................................................................................ 118
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Chapter 15: The findability framework: Establishing a foundation for smarter innovation ..............121
By Jeff Carr (Earley & Associates)
Innovation and knowledge- driven experiences ................................................................121
The data and information problem ................................................................................122
The findability framework ............................................................................................124
Chapter 16: The company body: Innovation as a necessary process of eliminating redundancy and
improving sustainability ......................................................................................................... 133
By Alma Dakaj (The Company Body)
Case study: Introducing the corporate body....................................................................133
The company body and innovation .............................................................................. 13 4
Networks .................................................................................................................136
Part Five: Market and industry exploration
Chapter 17: An entrepreneurial approach to corporate innovation .............................................141
By Lauren Perkins and Janine Buis (Perks Consulting)
The digital economy has changed the game ...................................................................141
1. Digital acumen ......................................................................................................142
2. Customer orientation ............................................................................................. 144
3. Agile execution .................................................................................................... 145
Leveraging entrepreneurial approaches for corporate innovation .........................................149
Chapter 18: Discerning peripheral vision: Telling monster from mirage in reading market shifts .....151
By Venu Vasuvedan (ARRIS)
Motorola: Mobile disruption in hindsight ........................................................................152
Disruption hides in large failures, not small successes ........................................................152
Managing the revenue- learning mix. .............................................................................152
Good- put and execution .............................................................................................153
Disruption inoculation: People and mindset .....................................................................153
Talent: Boundary trackers. .......................................................................................... 154
Mindset: Narrow and deep ....................................................................................... 154
Process goals: Fail fast; succeed faster .......................................................................... 154
Traditional organizational alternatives ............................................................................155
Innovation organization structure ideal: Rethink or triage?...................................................157
Conclusion ...............................................................................................................157
Part Six: Commercialization
Chapter 19: Commercializing innovative ideas in professional service firms .................................161
By Ralph Poole (Columbia University)
How can professional service firms capture the best new ideas and develop them into
market- ready solutions? ...............................................................................................161
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Customer loyalty: Building partner consensus ..................................................................161
DesignShop: Scan, focus, act ..................................................................................... 164
Supplier intelligence: Value prototyping ......................................................................... 165
Commercial off- the- shelf software (COTS) package implementation: Cross docking ................ 16 6
Weak signal research: Discovery day............................................................................167
Conclusion .............................................................................................................. 168
Chapter 20: Innovating the way we sell: Knowledge coverage models ........................................171
By Roberto Evaristo (3M)
Introduction ..............................................................................................................171
The fallacy that all sales training leads equally to higher sales ............................................171
Developing the next knowledge coverage model: Beyond territory and time management .......172
How to focus training to achieve effective knowledge coverage .........................................173
Conclusion ...............................................................................................................174
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Executive summary
SOCIETIES INNOVATE to improve quality of
life through better products and services, to
reduce poverty, to protect the environment,
and to fulfill human potential. After three
decades, research on innovation has
reached a rich inflection point. Innovation
writing up until recently has largely focused
on finding markets, getting cash, assembling
teams, meeting production requirements, and
disrupting the competition. Only recently have
innovation researchers begun to look at the
rich microprocesses that operate within the
interactions of individuals and groups. And
few of those researchers have focused on
the knowledge- related microprocesses. (In
this context, “knowledge- related” refers to
knowledge sharing, knowledge integration,
sense making, and filtering – all of which
play a role in catalyzing connections, testing
innovation candidates for potential, and
participating in myriad decisions about
markets, capabilities, and industries.)
Smarter Innovation explores these
knowledge- related microprocesses through
case examples, practices, and contemporary
research. Leaders in their field look at
the individual innovator, the team, the
organization, and the multi- organization
collaborative. The report considers the
drive toward innovation in the context of
organizations, markets, and economics.
Late 20th and 21st century researchers
of innovation – such as Peter Drucker, Eric
Von Hippel, Clayton Christensen, Andy
Hargedon, and Boynton, Fischer, and
Bole – have foreshadowed a move from
the macro to the micro. That is, the shift
from how organizations (usually personified
by the “leader”) invest and partner to how
individuals make sense of what they know,
how they perceive innovation opportunity,
and how they interact within and across
groups of individuals.
This report aims to shed light on
knowledge processes and microprocesses
for innovation. As knowledge practitioners
and researchers, the authors have a
particular interest in how people interact:
when ambiguity awakens insight; when
facilitation enables new connections; when
power asymmetries affect contribution; and
when challenging the status quo invigorates
creativity.
It’s the messy clash of knowings and
perceivings that animate our curiosity as
knowledge-practitioner authors. Smarter
Innovation contemplates the microprocesses
that fuel idea exploration and “bridging,
the microprocesses that socialize an idea
and that validate its promise within the social
fabric of the organization, those that fuel
(mis)interpretations of market signals, and
the microprocesses that inform or cloud our
collective judgments as product owners,
managers, and competition- watchers.
The report brings together the research,
knowledge, and experience of a global team
of knowledge practitioners, social artists, and
innovators. They are gifted in knowledge
disciplines such as knowledge transfer, social
media, storytelling, knowledge architectures,
strategy, and even the rigor of team- based
project execution.
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Executive summary
X
This report looks at innovation through
the prism of five innovation “dimensions”,
which reflect various knowledge- related
interactions in the path to market (or
operations) innovation. These dimensions form
a framework that is not a funnel or sequence,
but a collection of activities that are essential
to innovation success:
1. Bridging: Making sense of an idea
translated from one domain to the next.
For example, a meeting or crowd- sourcing
process integrating ideas across contexts,
as AirBNB merges auctions and regional
inventory, and Craig’s list merges social
and for- sale listings.
2. Social and operational integration:
Socialization and refinement of a new
idea across a network of employees
and/or partners. For example, a
company discussing a product innovation
on a social network, a community of
practice debating an idea, or a town hall
deliberating a process improvement.
3. Capabilities validation: Validating the
organization’s and individuals’ capabilities
and readiness to pursue the innovation.
For example, UPS’s introspection as it
assessed its readiness to go from shipper
to logistician.
4. Market and industry exploration: Using
collaborative microprocesses (and
data) to determine whether the market
or audience is viable. For example, an
eCommerce firm using decision heuristics
and clickstream data to identify unmet
site- visitor needs. Another example is a
retailer taking industry/competitive factors
such as prices and store locations, and
contemplating retaliation scenarios by a
region’s incumbents.
5. Commercialization: Considering
practicalities of pricing, positioning,
promotion, and production, again using
collective decision approaches. For
example, a family restaurant realizing
when it’s better to reprice, rather than
trim menu items, when the restaurant’s
reputation as the “one stop shop” is at
stake.
For organizations seeking to build an
innovation capability (or size up a partner
or acquisition) based on the physics of
knowledge- based interaction, this is a helpful
map.
Just as the dimensions described
above are not sequential or linear, nor are
the chapters of this report linear in their
approach. Several chapters explore more
than one dimension, and case studies
generally bring more than one dimension to
life in the context of a specific innovation,
or in the cultivation of an innovation
competency. While the Table of contents
shows the organization of the individual
chapters within this report, the “editor’s
notes” at the head of each chapter highlight
the diversity within and across the chapter
groups.
Throughout the chapters, terms like tacit
knowledge sharing, knowledge codification,
collective sense making, collective
intelligence, and customer analytics appear
frequently. These knowledge practices have
never been wrapped together in a coherent
way to address such a pressing problem
as innovation. As the global economy steps
out of its long recession, the winners will be
the innovators who expand opportunity and
prosperity for their employees, customers, and
societies by doing these practices well.
The authors contributing to this report
are eclectic. They discuss a variety of
human interactions (e.g., facilitating teams,
sense- making events, planning meetings,
social network discussions); a variety of
innovator competencies (“white space
sitting, “knowledge accident-prone”
and “agile entrepreneur”); and variety of
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XI
organization structures (incubator hybrids,
open collaborative communities). We visit
manufacturing, telecom, professional services,
and computer hardware industries, to name a
few. This extraordinary collaboration brings to
mind a prescient quote by philosopher John
Stuart Mill (1806–1873): “It is hardly possible
to overrate the value… of placing human
beings in contact with persons dissimilar
to themselves, and with modes of thought
and action unlike those with which they are
familiar… Such communication has always
been, and is peculiarly in the present age,
one of the primary sources of progress.1
The aim of this report is to aid just that
progress. Together we will boldly tread the
path towards smarter innovation.
Reference
1. Boynton, A., Fischer, B., and Bole, W., The
Idea Hunter, Jossey- Bass, San Francisco, 2011.
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Chapter 1: Escaping gravity: Three
kinds of knowledge as fuel for
innovation in an operate and maintain
company
In his discussion of innovation at companies
like Educational Testing Service (ETS),
which have come to focus on “operate
and maintain, ETS’s VP and CLO T.J. Elliott
eloquently describes how the non- profit
organization has embraced three types of
innovation knowledge: common language,
innovation know- how, and mutual, reflective
learning. He explains that it takes a radical
dedication to these three knowledges to
“escape gravity”. ETS’s innovation efforts
are building its capacity to participate
intentionally in all the dimensions of
innovation, and to continue learning as an
organization.
The gravity of success
What company would admit to not
wanting innovation? Yet, as many successful
organizations grow and mature, their
processes and controls exert a force upon
their members that can hamper the launch of
new products. The need to achieve efficiency
and quality, while satisfying the needs of
their customers via their products or services,
often makes companies into “operate and
maintain” (O&M) entities: organizations that
focus on doing the best possible with what
already exists, whether in capabilities or in
markets.1 While leaders understand that the
ultimate survival of any organization at some
point requires innovation (the entry of existing
products into new markets, new products into
existing markets, or – the most daring of all
– new products into new markets), they also
learn that to pursue true innovation for O&M
types is a challenge akin to escaping gravity.
Why is this the case? As John Kay
noted in Why Firms Succeed, whether
at the growing, expanding, or mature
stage of the organizational lifecycle, a
firm’s success depends largely on having
“distinctive capabilities” (relationships, brand,
intellectual capital) that have attributes which
others cannot replicate.3 Having attained
such a position, the leaders of a firm are
invested (both literally and figuratively) in
the preservation of those capabilities, not
in their transformation. The finite nature of
these leaders’ most important resource – their
attention – and the imperative to yield returns
in margin and mission compels them to worry
first (and often last) about the operation
and maintenance of current capabilities.
Unsurprisingly, an O&M organization’s
current activities are focused mainly on
those results that matter most this week, by
the end of the quarter, or at the latest by
the end of the year. That is what brings
success. The necessity to “keep things going”
sucks up most of the available time, money,
technology, “mindscape”, and even spirit. The
energy that could be invested in innovation –
creating the future – goes into maintaining the
present.
The world’s largest non- profit educational
measurement organization, Educational
Testing Service (ETS) advances quality and
equity in education for people worldwide
by creating assessments based on rigorous
research. Founded in 1947, ETS enjoys
substantial capabilities in intellectual property
(IP), research capacity, and reputation.
These forces are directed toward a mission:
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to evaluate, produce, and disseminate
information that advances the science and
practice of educational measurement and
research methodology, and to conduct
educational research with a special focus
on narrowing achievement gaps for learners
around the globe. With that “stock”,
innovation is necessary in order to transform
these new ideas into valuable services. The
challenge with accomplishing this kind of
innovation, as Andy Hargadon has written,
is that this is “an uncertain undertaking, one
that is fraught with risk, that takes resources
away from our current commitments and
activities; that forces people to learn wholly
new skills and perspectives or be put out
onto the street”.4 In an O&M culture of
“certainty and risk-aversion”, the interests of
many, understandably, are wedded to the
continuation of “current commitments and
activities”. The prospect of needing to learn
“new skills and perspectives” simultaneously
may seem to devalue the existing ones –
those that made the company successful
in the first place – and to thrust us into the
unfamiliar and uncomfortable position of
“not knowing. The knowledge of “how we
do things around here, our practices and
processes, supplies the gravity that both
keeps things organized, and dampens the
desire for innovation.
My colleagues and I in the chief
learning officer (CLO) unit at ETS formed the
hypothesis that three kinds of knowledge
might prove useful in attaining the “velocity
necessary for innovation to launch” at ETS:
1. A common language to describe our
current and desired states;
2. Specific innovation know- how; and
3. The mindset of mutual learning.
Notice the distinction between the first and
the latter two kinds of knowledge. That is
the difference between “know- what” and
“ know- how”, between episteme and techne.
We realized we needed both kinds of
knowledge.5
There are other kinds of knowledge
involved in innovation. For example,
technology transfer is at the heart of many
specific inventions. There are also other
essential components, like the creation of
an independent new product development
(NPD) unit with an officer as leader, and the
formation of a specific innovation strategy.
All of these are important, but our team first
focused upon our three kinds of knowledge
for our experimental interventions. We started
by constructing a way of speaking to each
other about innovation.
A common language
At ETS, we decided early on that we would
not attempt to advance these three kinds
of knowledge with all of the more than
3,000 members of our organization. As
Jean- Luc Doumont states in Trees, Maps, and
Theorems, communicators need to determine
a specific target for messaging – “Effective
communication… implies someone else:
it is about an audience.” We wanted an
audience that possessed some accountability
for making growth and innovation (G&I)
happen.
To select that group, we analyzed the
annual performance objectives of our top
500 directors and managers. We asked
the officer for each area to assert which of
their team members had true accountability
for what we called “non- organic growth
and innovation: those new products that
were not simply extensions or incremental
advances in existing markets. Officers
embraced the exercise. This support allowed
us to start forging a common language
about innovation. Less than 80 of the 500
top directors and managers were identified
as having any such accountability. Later
interviews with those chosen revealed
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that many also carried substantial O&M
objectives, and regularly postponed or de-
prioritized innovation work because of such
responsibilities. Those interviews also brought
to light substantial difficulties perceived by
those in this “G&I network”, and many of
those difficulties related to our three kinds of
knowledge – common innovation language,
innovation know- how, and mutual learning
mindset.
Over two- thirds of those designated
innovators worked in ETS’s research and
development (R&D) section, which comprises
not only applied research but also statistical
analysis, psychometrics, and assessment
development. With this extraordinary
complement of scientists, the organization
has an impressive store of intellectual capital.
ETS’s global presence also brings it into
contact with customer problems directly
related to its mission of advancing learning
worldwide. Almost all successful innovations
must knit together these two different kinds of
knowledge – the research lab, and the client
contact. But first both sides need to speak a
shared language about innovation.
An O&M organization that has less
recent experience with innovation is also
unlikely to have done much sense- making
upon which it can draw to describe what
should be done, and how it should be
executed. For example, when someone says
“launch”, do they mean “launch and learn”,
“beta launch”, or formal “product launch”?
Each is different.
Getting even a select group, like our
target audience, to adopt a common
language for innovation is not simply a matter
of issuing a glossary or holding a class. In
most cases, we are not writing on a tabula
rasa. At ETS, we started by understanding
how each person currently envisioned
innovation. Once we had discovered the
source of their current working definitions –
the plethora of business books on the subject,
popular magazine articles, secondhand
anecdotes, or even just flights of individual
imagination – we could work to create an
effective common language. Moreover, we
wanted this language to be evidence- based
and pragmatic.
The creation of such a language may
bump up against certain interests. Clearly
constructed definitions may cause a “shock
of recognition: the company and its leaders
cannot escape the conclusion that almost all
of their previous efforts have fallen outside
the realm of actual innovation, and inside
the world of O&M. Negotiations around
concepts such as “innovation” and “product”
may seem absurd – most companies do have
access to dictionaries – but sense- making is
an everyday powerful (if, sometimes, invisible)
activity in organizations. The consequences
are significant if previous agreements about
definitions are now shown to be part of an
illusion about who the company is and what
it’s really doing in the way of innovation. In
the absence of CEO sponsorship, this first
phase of escaping gravity might rattle the
organizational hierarchy. Fortunately, at ETS,
strong support from two successive CEOs
made a huge difference.
One of the ironies of our efforts is that
ETS was founded upon what the influential
theorist Clayton Christensen would term
a “disruptive innovation; in our case, the
breakthrough was the introduction of a way
to make valid and reliable claims as to test-
takers’ academic potential on a very large
scale.6 However, much of the value that we
have presented in recent decades – even
as our psychometric research continued its
advances – has come from what Christensen
calls “sustaining innovation”: creating
incremental improvements to existing products
and serving existing customers.7 These
distinctions in our new “innovation language”
helped everyone to understand why our
efforts to create disruptive innovations
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successfully now often lack people who have
recent relevant experiences upon which we
can draw.
To aid the construction of our own
working definition of innovation, we invited
Vijay Govindarajan of The Amos Tuck
School of Business at Dartmouth to visit ETS
to talk about his “box 1, box 2, and box 3”
framework for understanding innovation. In
looking at how organizations’ initiatives map
to a spectrum of innovation, Govindarajan
offered a model in which “box 1” was
“managing the present”, “box 2” was
“selectively forgetting the past”, and “box
3” was “creating the future”.8 An important
point that he draws in this model is that an
organization cannot create the future while
simultaneously holding on to everything
that is currently working for them. This is an
important insight for an O&M organization
because current efforts are generally directed
toward what is currently working. Introducing
a language in which members of the
organization can look at distinctions between
what is currently being done, and what is
desired, is critical. Plans for, and execution
of, that future cannot happen without first
establishing a way of talking about it.
Vijay’s work made us realize that ETS
was, at best, a “box 1 innovator”, and that
we needed to find our way to boxes 2
and 3. Our use of this powerful framework
extended to conversations about business
strategy, finances, and staffing. We saw
that what we were doing fell into box 1
(“competing for the present”), and not boxes
2 and 3’s (“competing for the future”).
Using a combination of face- to- face
conversations and social media, we
borrowed language from Eric Ries’ 2011
book The Lean Startup to think of each new
product effort as a startup that should “exist
not just to make stuff, make money, or even
serve customers, [but also should] exist to
learn how to build a sustainable business.9
Ries believes that, “This learning can be
validated scientifically by running frequent
experiments that allow entrepreneurs to test
each element of their vision.” Such thinking,
which is absent in an O&M mindset, allows
our innovators to see their main task as
figuring out how to run experiments. They do
this – to add two other new phrases from Ries
to our new shared language – to test value
and growth hypotheses.
“The value hypothesis tests whether a
product or service really delivers value to
customers once they are using it… The growth
hypothesis… tests how new customers will
discover a product or service.10 The shift from
serving existing customers in a familiar way
to questioning whether our offer connects
to some hitherto- unknown customer need is
significant: we moved from the known to the
unknown, from comfortable process to new
experiment. Established products enjoy a
history of value; innovators need to discover
where value and growth will happen. And
they need a language that allows them to talk
about that activity.
Agreeing about the descriptions and
definitions of the competencies associated
with successful G&I was the last element of
this first “common language” knowledge that
we pursued. We informed that part of the
common language effort with the findings
of the joint McKinsey/Egon Zehnder study
on the subject.11 Through discussions led
by my colleagues, we constructed our own
customized version of that framework of
knowledges, skills, and abilities needed –
and, possibly, missing – at ETS.
To go beyond mere labels, we invited
Egon Zehnder to interview G&I network
members. My colleague Janet Gillease
worked further to customize the competencies
to cover ETS’ experience. Our resulting guide
allowed us to discuss development needs for
the organization, starting with the leadership
group. These included areas such as those
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Smarter Innovation: Using Interactive Processes to Drive Better Business Results
7
listed below (Egon Zehnder competencies
in italics):
Ideation;
Building a business – not just building a
product (commercial orientation);
Focusing on the right new product
development with validated needs in a
customer population (marketplace and
customer insight);
Change and team leadership; and
Nexus skills: the ability to broker,
synthesize, and integrate a network
of ideas and resources including both
existing connections and new networks of
relationships.
This establishment of a common language,
including competencies for growth and
innovation, set us on our way to address the
second kind of knowledge- need identified:
innovation know- how.
Innovation know- how
As Larry Prusak and Tom Davenport pointed
out in Working Knowledge, imparting
know- how – especially to a beginner – is
generally thought to be harder than finding
it.12 At ETS, however, we had both problems.
While we had experts in every area of
educational measurement, we lacked
masters in “making connections between
people, ideas, and objects across the
broader landscape” in order to produce
breakthrough innovations.13 This meant that
we could not follow the proven practice of
having people apprenticed to a master inside
ETS: we had no such masters. “Parachuting
people, as senior employees, into the highly
technical world of educational measurement
had proven infeasible in the past. Our
approach, therefore, was to embed experts
in innovation temporarily within real ETS
product development teams. We had a
common language of innovation that made
the concepts more familiar to ETSers. Now,
in order to attain Vijay Govindarajan’s “box
2” (selectively forget the past), and/or “box
3” (create the future) innovation, we needed
a different skill set. In order to gain the
necessary new know- how, we undertook two
“embedding” projects: developing innovation
project practices; and developing skills in the
building of networks, or nexus skills, as we
described above.
Project practices- type know- how
Our hypothesis in this area was that there are
certain tacit project practices almost always
associated with more successful innovation.
Since we had relied upon Andy Hargadon’s
work in forming this hypothesis, we engaged
him and his partners at Fido Consulting as
our “temporary masters”. We specifically
asked that they participate in multiple groups
that were all working on a new product.
In this way, they were able to engage with
involved staff as issues arose, even though
they were observers and not “doers”. Some
of these issues may seem pedestrian –
unclear agendas, unfocused attendees, and
messy meeting management. Others were
of a more strategic nature: inquiring whether
sufficiently strong guideposts for product
development existed; noting when certain
tendencies emerged in the work such as
opportunism or risk- aversion; and arguing that
NPD leaders failed to establish clarity around
the issues involved in important decisions. All
of the projects provided opportunities for the
Fido team to engage, and thereby impart
know- how.
With research, IT, business units, and the
NPD team all involved, the Fido team were
embedded within ETS as we assembled
and delivered a new product. Those
involved knew the science and operations
of educational measurement, but they
needed to absorb the know- how of new
product development. Participants gained
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Chapter 1: Escaping gravity: Three kinds of knowledge as fuel for innovation in an operate and maintain company
8
new ways to interpret their situation more
effectively. For example, in one meeting
the Fido team guided several employees
“on the fly” to follow “the track” of market
requirements to product requirements, to
functional specification, and on to design
documentation, as a way of checking their
progress. It would have proven impossible to
simply apply such guidelines for tracing this
chain of reasoning. Instead, like apprentices,
those working on the new product had to
devise and manage these processes in the
context of the work that they were doing for
ETS. They also had to learn it and shape it
for themselves in the context of being in a
not- for- profit organization. Only by having
experts present who could ask the questions
that would lead to rigorous use of measures
of success, post mortems, and “inspect and
adjust” practices, could this important know-
how be distributed.
While the work of the outside experts
brought important knowledge to ETS for
achieving the kind of innovation we sought,
we were still left with gaps that we needed
to fill through our own learning, talent
recruitment, and continued consultation with
outside experts. However, we could translate
our new know- how into “new rules”:
1. Have a single accountable project owner
who manages “cradle to grave”;
2. Participants must commit to the project
both philosophically (to its vision), and
physically (somewhere between half and
full- time commitment);
3. Define clearly and follow roles for each
player in an NPD effort;
4. Match people to the work from the most
appropriate source, whether inside or
outside ETS, and acknowledge our limits
in embedding innovation know- how;
5. Use a common set of tools, and teach
everyone involved directly how to use
them; and
6. Discuss issues candidly and promptly
when they arise so that plans can unfold
quickly into deliverables.
This last point overlaps with the second
example of know- how that we learned
through embedding experts: nexus skills.
Employing nexus skills know- how
At ETS, as at other organizations, innovations
must combine existing technical elements,
often from otherwise unrelated sources. An
example could be combining a particular
algorithm for producing test items with a
specific platform for digital delivery, and an
array of channels for product distribution.
Yet, pathways for innovation between these
areas likely do not yet exist, because this
kind of scientific collaboration is new to
us. Putting products together requires that
those accountable possess the know- how
to establish a network that gives individual,
team, and organizational access to the
broadest range of potential elements, within
and outside the formal organization. Dexterity
in doing this is known as having “nexus skills.
As we learned with innovation project
know- how, nexus skills are best learned by
doing. Each individual, and the team as a
whole, needs to figure out how to broker the
exchanges demanded, and how to integrate
others’ contributions throughout the innovation
project.
In trying to add this type of know- how
to the work of one specific team, we used
a mental mapping exercise with almost
20 people involved in a particular new
product. The goal was to make their theories
visible and discussable. Our premise was
that, unless they understood how each of
them saw the project – how they thought
they would achieve success, what would
be required from whom within and outside
the team – they stood little chance of
integrating each other’s contributions, or of
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Smarter Innovation: Using Interactive Processes to Drive Better Business Results
9
establishing the networks needed to obtain
help elsewhere. Our mental map exercise
demonstrated that many – even contradictory
– definitions of success existed but, perhaps
more importantly, in some cases participants
found it difficult to envision what success
would look like at all. Most of them thought
in “silos”; the boundaries of their mental map
for innovation stopped at the limits of their
own unit. Few of them imagined any nexus
work – the connections with various people
they would need to make – as being part of
achieving innovation success.
By having these 20 people create these
mental maps, we were attacking the first
of Ronald Burt’s four levels of brokerage:
bridging “structural holes” (the gaps between
two or more individuals with complementary
resources, responsibilities, or information).14
Getting to the last of Burt’s levels –
synthesizing ideas from multiple sources – is
the essence of nexus work, and we continue
to strive, through practice, to develop the
“how to” that will allow such intentional and
consistent interdependence. In order to do
this, we need our last kind of knowledge:
understanding how to acquire a mutual
learning mindset.
Learning how to learn as knowledge
Innovation and invention are products of
teams, not individuals. Getting a number of
players at the heart of our identified G&I
network to speak a common language,
agree on a framework for innovation, and
refine their innovation know- how was only
part of what was necessary to move beyond
the O&M culture. As we withdrew the outside
consultants, the innovation teams needed to
“learn how to learn”. For example, if new
product efforts were seen as experiments
to produce learning, then the players had
to become more adept in devising these
experiments for learning. They had to expose,
question, revise, and share their own theories.
This entailed not just theories about how
some capability might address a customer
problem, but also theories about how the
team operated best, and how they needed to
“show up” and participate as individuals.
This last kind of knowledge, knowing
how to learn, is what Peter Senge and
his colleagues termed “personal mastery”.
Personal mastery is hard to acquire except
through rigorous reflection.15 Again the
O&M organization often is inimical to
such reflection. Action is valued above
any other mode; activities of reflection
may be derided as “paralysis by analysis”.
Part of this knowledge effort thus involved
countering such a position by pointing out
that “extinction by instinct” might be the fate
of an organization that failed to look at how
biases emerged in work, or that neglected
to ask if results invalidated their ideas about
how things get done.16
We saw these innovators needed to build
reflection into their work. Leaders needed
to set the example by asking authentic
questions, admitting to gaps in their own
knowledge, truly listening, and grounding
decisions in evidence. This last shift in
leaders’ behavior is critical. The difference
from an O&M environment is profound: NPD
is a voyage through a sea of unknowns,
whereas operational effectiveness is the
culmination of knowing many things with
great certainty.
Acquisition of this last of our three
“knowledges for innovation” is like finally
escaping velocity, and departing the O&M
atmosphere. It takes practice. Workers
are unfamiliar and perhaps uncomfortable
with what Bob Kegan and Lisa Lahey
term “holding our assumptions at arm’s
length”: not letting our assumptions hold
us; being able to look at our beliefs from
an outside perspective, rather than being
inseparable from those assumptions.17
The polite willingness to skirt issues with
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Chapter 1: Escaping gravity: Three kinds of knowledge as fuel for innovation in an operate and maintain company
10
fellow collaborators that Chris Argyris
and Donald Schon first wrote about 40
years ago still exists and makes gaining
this outside perspective on our actions,
and the results, even more difficult.18 Those
authors noted the frequent presence of
“undiscussables” in work organizations:
the ignored “elephants in the boardroom”
of topics such as failures, contradictions,
inconsistencies, incompetencies, rivalries,
and resentments. Therefore, the third kind of
knowledge requires intense facilitation by
skilled professionals to introduce safety and
help employees absorb these new habits of
reflection. Again, CEO sponsorship is critical,
but the most important work occurs in the
work groups charged with innovation, where
the habits of reflection must start.
Group reflection, rather than individual
reflection, is itself a significant shift. Since
O&M organizations have little experience
with innovation, they are susceptible to
popular mischaracterizing of the topic. One
of the most dangerous mischaracterizations
is the notion that new products are likely to
emerge from the work of a single individual
of genius. As Andy Hargadon notes,
innovation is more likely to come from
“moments when people, ideas, and objects
from different worlds come into contact… to
exploit those moments.19 Innovation is more
likely to be the result of a group of people
who have figured out how to work together
effectively than isolated creative geniuses.
This third kind of knowledge was, in part,
about reflecting on how to work together
effectively.
One framework employed at ETS
to engender reflection by groups was
“mutual learning”, as described by Roger
Schwarz.20 We worked with members and
teams to experiment with approaching their
innovation work, not as situations in which
they must advocate for their ideas in order
to “win the day”, but as instances for each
member of understanding that, while they
have information, so do others, and that
differences are opportunities for learning.
We encouraged people to state views,
ask genuine questions, share all relevant
information, employ specific examples, and
explain reasoning and intent. This “mutual
learning approach” incorporates the notion of
testing assumptions and inferences, which is
highly useful for innovation in any case.
Such conversations did not become
expansive spontaneously. They needed
structure, guidance, and practice, just as
we saw with innovation project practices.
Our approach was to provide specific and
general support: specific in the shepherding
of a particular work team through sessions to
devise strategic roadmaps; and general in
the review of mental maps to uncover reasons
for stalled progress overall. In both instances,
we encouraged and enabled greater
transparency among members, especially as
to how they reached conclusions about what
needed to happen next in the development
of new product. We tried to put them in a
position where they could not only learn
how to learn, but apply that “how to learn
knowledge” with each successive cycle of
new product development.
Conclusion
Our three knowledges we had identified
as necessary to create fertile ground for
innovation at ETS – a common language,
deep innovation know- how, and mutual
learning – are still in their early stages
relative to our almost seven-decades history
as a not- for- profit organization. We believe
that what we are doing will allow us to
launch innovations that escape the gravity
of our very successful, and very important,
O&M organization. However, to take the
metaphor further, losing altitude is always a
concern. We continue to work on all three
knowledges. In the uncertain and exciting
Smarter Innovation 01 Elliott 071114
Smarter Innovation: Using Interactive Processes to Drive Better Business Results
11
world of innovation, “proclamations of
possession or certifications of completion are
suspect”. Everything must be thought of as a
work in progress. Therefore, no end- point is
evisaged for these efforts. Without continuous
bolstering of these efforts, the forces of O&M
will keep innovation in check (while also
providing the benefits of monetary resources
needed for new product development). We
must refurbish our own know- how. We must
continue to invest in knowledge as the fuel for
innovation.
About the author
T.J. Elliott is vice president and chief learning
officer at Educational Testing Service (ETS)
in Princeton New Jersey. He is charged
with helping “ETSers” connect to the people
and knowledge they need to do their jobs,
and to develop individuals, teams, and the
organization so that they incorporate diverse
perspectives and add desired value. T.J.
joined ETS in January 2002 and created
ETS’s Learning for Business Results leadership
development program, and its Recognizing
Performance management system that year.
He also led the human resources function of
ETS from 2005 to 2012.
Before joining ETS, Elliott spent
seven years as director of research and
consulting design for Cavanaugh Leahy &
Co., an organizational development firm
headquartered in Lawrenceville, NJ. From
1989 to 1994, he served as vice president
of Longview Associates, a management
consulting company in White Plains,
NY. In these positions, T.J. designed and
implemented human resource, leadership,
knowledge- sharing, and strategy- development
initiatives for a variety of major corporations.
T.J. received his bachelor’s and master’s
degrees from Manhattan College and Nova
Southeastern University, respectively. He is
co- author of Decision DNA (Emerald, 2005),
and wrote the foreword to the second edition
of Work- Based Learning: Bridging Knowledge
and Action in the Workplace by Joe Raelin
(W iley, 20 08).
The work described in this chapter was
accomplished with his ETS colleagues Cheryl
Aaron, Janet Gillease, Ugochi Igbokwe, Kirk
Messick, and Willa Thomas, and the support
of Linda Tyler, vice president of new product
development at ETS.
References
1. This term in describing a particular type of
company culture shares some similarities with
Michael Porter’s “operational effectiveness”, the
“operational competence” and “operational
effectiveness” found in the “value disciplines”
model by Michael Treacy and Fred
Wiersema, and the “performance engines” of
Vijay Govindarajan and Chris Trimble.
2. Govindarajan, V. and Trimble, C., Beyond
the Idea How to Execute Innovation in Any
Organization; Porter, M., On competition,
Harvard Business School Press, Boston, 2008;
Treacy, M., and Wiersema, F., “Customer
Intimacy and Other Value Disciplines”, Harvard
Business Review, January 1993.
3. Kay, J., Why Firms Succeed, Oxford University
Press, Oxford, 1995.
4. Hargadon, A., “What Is Innovation?”, blog
post available at http://andrewhargadon.
typepad.com/my_weblog/2010/12 /what- is-
innovation.html.
5. Fantl, J., “Knowledge How” in Edward N.
Zalta (ed.), The Stanford Encyclopedia of
Philosophy, 2 014.
6. Stricker, L. J., ETS Research on Cognitive,
Personality, and Social Psychology, ETS R&D
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February 2013.
7. Christensen, C., The Innovator’s Dilemma:
When New Technologies Cause Great Firms
to Fail, Harvard Business School Press, Boston,
1 9 9 7.
8. Govindarajan, V., and Trimble, C., Harvard
Business Review on Rebuilding Your Business
Model, Harvard Business Press, Boston, 2011.
9. Ries, E., The Lean Startup, Crown Publishing,
New York, 2011.
10. Ibid.
11. Egon Zehnder International and McKinsey
& Company, “Return on Leadership:
Smarter Innovation 01 Elliott 071114
Chapter 1: Escaping gravity: Three kinds of knowledge as fuel for innovation in an operate and maintain company
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Competencies that Generate Growth”, joint
study, 2011, available at www.egonzehnder.
com/files/return_on_leadership.pdf.
12. Prusak, L., and Davenport, T., Working
Knowledge, Harvard Business School Press,
Boston, 1998.
13. Hargadon, A., How Breakthroughs Happen,
Harvard Business School Publishing, Boston,
2003.
14. Burt, R., “Structural holes and good ideas”,
American Journal of Sociology, 110, 2004.
15. Senge, P. Fifth Discipline Fieldb ook, Crown
Business, New York, 1994.
16. Langley, A., “Between ‘Paralysis by Analysis’
and ‘Extinction by Instinct’”, MIT Sloan
Management Review, Cambridge, MA.,
Spring 1995, available at http://sloanreview.
mit.edu/article /between- paralysis- by- analysis-
and- extinction- by- instinct.
17. Kegan, R. and Lahey, L., How the Way We
Talk Can Change the Way We Work: Seven
Languages for Transformation, Wiley, San
Fr a n cisco, 2 0 01.
18. Argyris, C., and Schön, D., Theory in Practice:
Increasing Professional Effectiveness, Jossey-
Bass, San Francisco, 1974.
19. See n. 13, above.
20. Schwarz, R., Smart Leaders Smarter Teams,
Jossey- Bass, San Francisco, 2013.
Smarter Innovation 01 Elliott 071114
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