Fostering Innovation

Recent studies on global competition suggest that successful organizations foster collaboration across departmental, firm, and national boundaries. Thus businesses derive competitive advantage from focusing on innovation in business models as well as from innovation in products. The nature of innovation is ever-changing and is now increasingly open, collaborative, multi-disciplinary and global. By encouraging innovation and creating new business processes and models, firms can differentiate themselves from their competition. While Kraemer and Dedrick focus on who benefits from innovation produced in their iPod project “The Value from Innovation,” CRITO faculty associate David Obstfeld is researching practices that managers can use to foster innovation.

Obstfeld’s research project “Brokerage, Social Networks, Knowledge-Based Innovation” just received major funding from the National Science Foundation. The study investigates how emergent combinations of social networks, knowledge and resources lead to innovation within and across organizations. These activities include the actions of connecting and introducing people, as well as the communication of new ideas, and the creation of new innovation projects. Obstfeld’s research aims to introduce a new model of organizational action, agency, and leadership. We met with him to discuss some areas of his research.

How do you define a broker in your research?

There is a lot of confusion in brokerage literature about what a broker is and does. For instance, does a broker play two people off against one another in a bidding process? Does Wal-Mart act as a broker with its different suppliers when it plays them off one another? Or, does a broker introduce and coordinate others, or take information from one entity and bring it to another?

My innovation research identifies a separate and distinct category of brokerage involving persons or organizations who connect other people or organizations. So there are many different forms of brokerage, but for innovation, this connecting type of brokerage often needs to be present. This connecting work involves what I call a “tertius iungens “ or connecting orientation -- the “tertius iungens” phrase is just the Latin for “the third who connects.”

In your research, do you find that it is the individual’s knowledge or social network which leads to greater involvement in innovation?

You often need both. I see four fundamental aspects of individual innovation involvement.

1. A stock of social and technical knowledge;
2. The ability to articulate that knowledge – if you can’t articulate your knowledge, it’s not going to be useful or valuable;
3. Social network – a valuable network of relationships and resources one can combine;
4. The skill itself with which one connects or pulls those people and resources together – that’s the tertius iungens idea I just mentioned.

To put it differently, individuals walk around with stocks of knowledge and social networks. Then, on top of that, they need to be able to articulate that knowledge and connect the key people – when all four of these are present, the probability of innovation occurring increases greatly.

It’s important to study how social network structure influences innovation, but we also need to see ways people act within those networks, and specifically how they connect to mobilize the action that makes innovation possible.

What are the greatest obstacles brokers of information face?

Everyone thinks having a lot of novel ties to discrete worlds is an advantage because they present greater opportunities. But the flip side to that is the challenge to translate skillfully and to mobilize action among diverse people who speak different "languages." This increases the innovation challenge exponentially, and the risk of failure. The challenge in these environments are phenomenal and now we have an increasing percentage of innovation that involves this type of work.

How does knowledge itself flow, how does it meet other knowledge, and how does it combine?

I see five “transformations” to articulating knowledge. These may seem obvious, but each are really important. To communicate knowledge you need to transform it from:

1. Private to public – moving your personal understanding out into the world so that others understand it;
2. Complex to simple – simplifying knowledge through analogies, metaphors, or narratives;
3. Past to present – bringing your past experience to the present situation;
4. Unstructured to ordered -- organizing your ideas into a logical order, either as a story or an argument;
5. From one language to another, or translation -- for example, from marketing to operations.

People often move through the world without noticing these dimensions. They are not aware that there are issues of skill involved. It is not good enough to know stuff – articulating it is crucial.

What are some management techniques required to more effectively leverage third party resources and deliver greater innovative outcomes?

Managers can ask themselves “What can I do as a manager to connect my people to other worlds and to encourage them to do this connecting work on their own.” This assumes, of course, that managers reflect and diagnose their own activity – do they have effective networks, and are they good at connecting people in those networks. Are they effective at communicating their ideas, which should be seen as achieving both mutual understanding and support for their ideas from people in other departments and organizations? An IT manager might describe to his staff how she re-framed an issue (translation) so that it could be grasped by someone in operations, marketing, or upper management. The same manager might point out to a subordinate how a brief illustration or story (complex to simple) might have had more impact than the long presentation the subordinate just made. Finally, the manager might work alongside an employee to plan a series of formal and informal meetings (tertius iungens connecting activity) through which the department might develop support for a new innovation. Developing these social skills is becoming an increasingly important managerial responsibility.

Given how business practices are evolving, we need to shift our attention from expertise alone to expertise and people’s capacity to mobilize innovative action. This is the kind of work that managers need to model and cultivate in their staff from day one.

Any new model of innovation must find ways to leverage the disparate knowledge assets. Today many of the world’s really bright people aren’t members of any single team but are distributed in multiple institutions globally, and many work in diverse disciplines. Will you be studying innovations between different disciplines?

Yes. We will be studying different types of organizations working across multiple national and cultural boundaries. We are also interested in capturing more dynamic environments where networks extend across firm boundaries. Although this is more difficult to study, this type of work is far more important than ever in the global economy. And as you might imagine, the ability to articulate or translate across cultural and country boundaries requires even more skill.

What is the unique contribution of this research? How does it fit in with what we already know?

Much of the research work looks at social networks, but less research compares these networks across organizations and even less examines the social processes that drive those networks.

David’s study aims to rigorously look at social processes in conjunction with social networks. He is looking to test a model that connects innovation from within the firm to innovation activity outside the firm. More information about David Obstfeld’s research can be found at http://web.gsm.uci.edu/~dobstfel/.