Last month I attended Supernova 2007 in San Francisco. Along with Sun's CTO Greg Papadapolous and former Microsoft CTO Nathan Myhrvold, I participated in a panel on What will drive future growth and innovation in the technology sector?
In my opening remarks I focused on the opportunities to leverage the huge advances in technologies, standards and communications to enable us to look at a whole organization – an enterprise, an industry eco-system or an economy – as a holistic, integrated system, linking together processes, information and people. Needless to say, these are incredibly complex systems. The tools we are using to design, build and manage them today are quite primitive, and they thus require considerable labor-based services.
We need breakthrough innovations to enable us to better deal with these increasingly complex organizational systems. Engineering has done a very good job developing advanced tools and methodologies – e.g., CAD/CAM, simulations, models, etc – to help us deal with very complex physical systems, like airplanes, skyscrapers and microprocessors. This has enabled very high quality and productivity in the production of physical objects.
Our challenge and opportunity now is to develop similarly sophisticated tools and methodologies to deal with complex organizational systems like those found across industries and economies. Compared to what we’ve done so far, this is hard, – very, very hard.
Why is that so? To begin with, organizational systems must continuously evolve to keep up with the requirements of a fast-changing marketplace. Moreover, people play a prominent role in such systems. People-based processes and activities are particularly unpredictable, a point I glibly expressed in my Supernova remarks by saying that "processes involving people are a lot more complicated because people are a pain in the ass. They are not deterministic."
Classic engineering has had trouble dealing with the unpredictable, unanticipated aspects of systems, which is why the services side of IT has been growing so rapidly. What we clearly need are more flexible, modular architectures to enable systems to evolve and adapt to rapidly changing, unpredictable market conditions, as well as a whole set of tools to enable people to handle real-time actions and decisions with the kind of quality and productivity we associate with engineering systems.
One of the best discussions of the problem and potential solutions around this topic can be found in a recent book, Think, Play, Do: Technology, Innovation, and Organization by Mark Dodgson from the University of Queensland Business School and David Gann and Ammon Salter from the Tanaka Business School at Imperial College – where earlier this year I was appointed adjunct professor in its Innovation Group.
Think, Play, Do focuses on the innovation process itself and how it is changing in ways that have profound implications for organizations and individuals. Their basic premise is that to respond to the increasing complexity, uncertainty and costs inherent in transforming a business to be competitive in today's environment, a company has no choice but to embrace a new approach.
Underpinning such an approach is a new category of Innovation Technologies, which has emerged over recent years and is increasingly being applied to and changing the innovation process in business. It includes simulation and modeling tools, virtual reality, data mining and rapid prototyping. The use of these technologies, when combined with the appropriate talent and organizational changes, helps make the innovation process more economical and less uncertain.
According to Professors Dodgson, Gann and Salter, this new innovation process entails three key activities: thinking (idea generation), playing (designing, experimenting, assessing and selecting), and doing (prototyping). These usually happen in parallel, with multiple interconnections and iterations, and the same team is often involved in all three activities. The new process emphasizes the importance of design and prototyping in organizational innovation.
The book strongly advocates a collaborative approach to innovation, both within the company and between institutions. It argues that many organizational innovations now require multiple technological, market and business perspectives, which makes it hard for a single company to build all the necessary skills and knowledge in-house. The use of Internet-based technologies supports a much more distributed and open approach to innovation, involving external relationships with academic institutions, research establishments, consultants, suppliers, customers and even competitors.
I like the Think, Play, Do approach, because it is essentially bringing the practices that have served us so well in engineering over the ages into the world of business, including the use of technologies, tools, design and prototyping. Lest we forget, it took decades to hone the application of engineering to the development of complex physical objects. Business and organizational systems are far more complicated, dynamic and unpredictable. So we have our work cut out for us as we now try to bring the technologies and methods of engineering to bear on this new class of problems. It may very well be our ultimate challenge in the emerging knowledge economy.
