The Philosophy of Innovation
Einstein was a low-level clerk when he dreamed up relativity. Mendel was a monk when he discovered genetics. The structure of DNA was cracked not by the acclaimed minds of the day, but by two young, underachieving post-grads working in relative obscurity.
Breakthrough innovations tend to pop up in funny places. Some like penicillin and teflon were accidents. Others, like the Internet, world wide web and the graphical user interface, originated in big labs, but flourished elsewhere.
What do we make of that? Why do really big ideas tend to come from small places? How do we push our organizations to innovate when it seems like organization itself often squelches innovation? The answer lies, strangely enough, not so much in organizational structure, but in organizational purpose, outlook and philosophy.
Why Germany Kant Compete
Way back in 1999, when the Web was just beginning to pay off economic dividends, it had already became clear that America was dominating the digital space. But why? The Web, after all was a European invention, born at a CERN, a massive government funded physics lab that had little use for it.
The story is not unique. Steve Jobs famously made use of Xerox PARC’s innovations to create the Macintosh, a fact that led Malcolm Gladwell to proclaim him a tweaker. It seems that, in the digital age, such tweakers have the advantage, while massive R&D centers, with all of their brains and resource, are left to watch in awe as others exploit the fruits of their labor.
The real divide between currently successful economies, like the U.S., and currently troubled ones, like Germany, is not political but philosophical; it’s not Karl Marx vs. Adam Smith, it’s Immanuel Kant’s categorical imperative vs. William James’ pragmatism.
What the Germans really want is a clear set of principles: rules that specify the nature of truth, the basis of morality, when shops will be open, and what a Deutsche mark is worth.
Americans, by contrast, are philosophically and personally sloppy: They go with whatever seems more or less to work. If people want to go shopping at 11 P.M., that’s okay; if a dollar is sometimes worth 80 yen, sometimes 150, that’s also okay.
Therefore, he concluded, over the long haul orderly institutions get better at making things efficiently and with precision, while ad hoc upstarts are more likely to try new things and adapt to change.
The Corporate Divide
Krugman’s notion is especially troubling for large corporations. They, after all, have to get things done. They have employees and suppliers to pay, investors to keep happy and margins to maintain. The trains need to run on time. If they don’t, the organization’s stock price will fall and they will become a takeover target.
Making money is hard work. It requires a certain amount of planning and organization. Expenses must be subject to an approval process, investment must be planned through an asset allocation strategy and so on. Senior management has to keep a steady hand at the helm or chaos will ensue.
That’s in stark contrast to start-ups, where chaos is often the order of the day. The problem is, they rarely make money. They often fail and the ones that do succeed, as I’ve noted before, end up having their own problems. Some falter and are unable to stay competitive, others, like AOL and Yahoo, continue to make money but become unable to innovate.
Infinite Monkeys and the Library of Babel
I think that key to the problem is the infinite monkey theorem made famous by the Jorge Luis Borges story The Library of Babel. The basic idea is that if you had enough monkeys at typewriters, they could compile all the great works of literature just by pecking randomly. Great works would, in fact, just be a matter of time and curation.
The idea is disturbing because we have come to prize our Homers and our Kafkas, just as we revere our Einsteins, our Watsons, our Cricks and, of course, Steve Jobs. It’s not just the innovations themselves that thrill us, but that fact that the story has a hero. Tales without protagonists are notoriously poor sellers.
But why? Scholars doubt that Homer existed. Kafka died completely unknown. Einstein, Watson and Crick discovered no new information, but simply synthesized the ideas of others. Others surely would have put the pieces together in time. Einstein published his theory of general relativity only one week before David Hilbert published another version.
The truth is, as I’ve written before, technology is something we uncover more than it is something we build. The monkeys have already written the story and we are merely curators in our own Library of Babel.
Strategy, Optimization and Innovation
Big ideas are useless. They represent a new uncovering and therefore don’t apply to the world as it is, but as it might become. Small ideas don’t get noticed, we merely put them to their purpose and call it a day’s work. We of course, need both: to uncover and to build.
That’s the fundamental difference between strategy, optimization and innovation. Strategy and optimization are products of design. Successful organizations are immense undertakings in clockmaking, where each piece needs to work in lockstep with every other piece. Innovators, of course, are searching for a new way to tell the time.
The real trick is to be able to do both. As F. Scott Fitzgerald put it, “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function”