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If You Want To Innovate, Follow These 5 Rules

2013 October 23

Tony Stark is a prototypical innovator.  Brilliant and eccentric, he works alone in his lab and creates amazing things as if driven by a magical force.  He then goes to a cocktail party, fights some crime, cracks a few jokes and has a few laughs. Alas, Iron Man is a cartoon.

The truth is that innovation is a messy business where confusion and uncertainty reign.  There are late nights, petty arguments and a roller coaster of emotions ranging from euphoria to abject desperation.

Yet these days, innovation isn’t an option, it’s an imperative.  Technology is changing so fast that, you can’t expect your business model to last anymore.  Even if you’re successful, that success will turn to failure if it leads you to favor stability and the status quo over change.  While there are no easy fixes, these 5 rules will set you in the right direction.

1. Collaboration Is Key

One of the things that makes Tony Stark compelling is that he largely works alone.  He gets an idea, then swills coffee and tinkers away until he makes it a reality.  None of it makes sense to anybody else until the hero emerges in triumph.

The truth is that stories of lone genius are largely myths.  Take a closer look at any great discovery or invention and you find that credit belongs to a group of people, often working in parallel, who each came up with different parts of the answer.  So attribution is largely a matter of historical convenience.

What’s changed in the last generation or so is that innovators are not only working in parallel, but increasingly in concert.  A recent paper in the prestigious journal Nature found that an average issue today has about the same number of articles as one in 1950, but four times as many authors.

Nobody knows exactly why this is true.  Some suspect that it is because problems have grown more complex, while others argue that it is because digital technology makes collaboration easier.  One thing is clear—if you want to innovate, don’t expect to go it alone.

2. Proximity Matters

When Marissa Mayer decided to no longer allow Yahoo employees to work from home, she was widely assailed for being out of step with the digital economy.  Surely, many argued, that in this era of e-mail and video conferences, hard working professionals can be as productive working remotely as they can being stuck in an office.

But Mayer stuck to her guns, arguing that proximity is crucial for effective collaboration. As she wrote in her memo:

To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo! and that starts with physically being together.

Despite the controversy, research supports Mayer’s position.  In a study analyzing ten years worth of papers at Harvard, geographic proximity was shown to be a key success factor.  It was even found that if researchers were in the same building, but on different floors, results would suffer.

So even in an age of long distance digital connectivity, location matters.

3. Openness Trumps Secrecy

There is probably no organization more associated with breakthrough innovation than Bell Labs, whose remarkable achievements range from the transistor to information theory.  It’s not too much of a stretch to say that Bell Labs, more than anybody else, invented the digital age.

So when it was spun out of AT&T in 1996 as Lucent Technologies in 1996, there was with great fanfare.  With its wealth of technology and talent, many expected Lucent to dominate the market for telecommunications and its stock soared.  However, it soon became clear that, as impressive as it was, Lucent was not keeping up with the competition.

It’s competitor, Cisco, had an altogether different approach.  Rather than maintain a large R&D effort, it scanned the world for smart technology developed by other companies. Often, these were startups formed by engineers at companies like Lucent and Cisco would partner with them, invest in them or buy them outright.

That, in essence, is the reasoning behind open innovation.  No matter how innovative your organization is, most of the smartest ideas are going to be developed somewhere else.  So, while protecting proprietary information remains important, you need to make sure that you don’t close yourself off.  When in doubt, open up.  The rewards far outweigh the risks.

4. Diversity Beats Talent

One thing I’ve noticed over the years is that there are two kinds of offices—ones with purple hair and tattoos and ones without.  In my experience, the places with purple hair and tattoos are not only more fun, they’re also more productive and successful.

Far too often, professional organizations become dank, stale places.  Calcified notions of who the “right” kind of people are become embedded in their DNA.  Often, these notions are seen as “standards” and the mark of an elite unit, but they are really evidence of an enterprise that’s become boring and complacent.

A wealth of research clearly demonstrates that a diverse team will outperform group of more talented, but homogenous individuals.  They are more creative, solve problems more effectively and produce less errors.

So next time you tell yourself that you recruit only the “best people,” you might want to make sure that you’re not merely choosing those who are most like you.

5. The Future Of Innovation Is Simulation

In the 2012 Presidential race, Mitt Romney’s team of “the best and the brightest” plotted strategy in their inner sanctum.  They became so confident of victory that Romney didn’t even prepare a concession speech.  Barack Obama’s team of misfits, on the other hand, ran 62,000 simulations per night and won handily, just as their models predicted.

Welcome to the simulation economy.  While it has become a persistent mantra to “fail fast, fail cheap”  the truth is that failing fast and cheap is quickly becoming too slow and expensive.  Smart companies are learning to use new technologies, such as 3D printers, A/B testing and agent-based models to reduce costs and increase success rates.

That’s why the future of innovation is simulation.  Whereas before, we could only sit and hope we came up with the right answer, now we can imagine a multitude of “what if?” scenarios and test them in the virtual world before deploying them in the real one.

Okay, maybe that last part is a little bit like Tony Stark…

– Greg

4 Responses leave one →
  1. October 25, 2013


    Thanks for another great posting. I was particularly happy to see you reference Scott Page whose thinking on diversity and complexity has been a strong influence in my own work. ~David

  2. October 25, 2013

    Yes! Very important stuff.

    Have a great weekend David!

    – Greg

  3. November 1, 2013

    Greg –
    You had me until “failing fast is too slow” … A/B testing must be both failing fast and simultaneous. Too often you see marketers going with 2 good safe options, when they really need a big, scary, creative concept. Both A and B wind up being safe options with out an imperative that failure is a positive outcome. You have to be willing to put something fail-able (and out-there creative) into the A/B test to ever get somewhere innovative.

  4. November 1, 2013

    Yes, that is one of the limitations of A/B testing, it’s very incremental. Agent based simulations are much better for testing radical ideas.

    – Greg

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