Irving Wladawsky-Berger

(Just about) All Innovation is Local

At an innovation conference in Mexico in November of 2006, the Colombian journalist Alejandro Santos reminded us, in his eloquent summary, of the advice that the great Leo Tolstoy gave to prospective writers:  "Describe your village, and you will be universal."  Santos illustrated Tolstoy's maxim with the Colombian writer Gabriel Garcia Marquez, winner of the 1982 Nobel Prize in Literature, whose world-renowned novel One Hundred Years of Solitude takes place in Arataca, the small river village of his childhood.

In other words, to come up with a successful innovation, capable of being appreciated by people around the world, you need something very compelling to offer those global markets.  And where do you find such innovative, compelling ideas?  Sometimes the answer is in world-class research labs.  But often, the best new ideas are found in those areas that you know best - right around you.

Global aspirations need to be grounded in local actions.

Immigration Debates

The ongoing election season in the US has been fascinating.  We have seen the candidates now come down pretty much to John McCain for the Republicans, and Hillary Clinton and Barack Obama for the Democrats – all, I must say, first-rate candidates.  I seldom judge candidates on their position on any one issue.  Rather, I try to see how comfortable I am with their approach to governing, and with the kinds of people they will listen to and appoint to key positions. 

But above all, I try to discern each candidate’s overall style and character.  And this time around, I find that a candidate's attitude toward the immigration debates raging in the country is a very good proxy for how I feel about them.  I don't mean necessarily their actual position on immigration - which is a very complex subject, with lots of room for different ideas on how to solve it.  What I find most revealing and important is the tone with which they approach the immigration issues - is it angry and strident, or is it rational and thoughtful?

A Very Delicate Balance

I recently gave several talks on Technology-based Business Innovation that were based on the graduate seminar I taught at MIT last semester.  Teaching a new graduate course forces you to think really hard about what it is you want to communicate.  Trying to compress the content of thirteen, three-hour seminars into a one-hour talk forces you go the next step and think even harder about the very essence of your material.

So, what is the essence of Technology-based Business Innovation?  Why is it so very hard for any company beyond its young, entrepreneurial, adolescent years – say, ten to twenty or so - to continue to embrace the kinds of disruptive innovations that got it started and made it successful to begin with? 

As you would expect, there are no simple answers to these questions.  The more you reflect on what it takes to manage a business, the more you realize that it is very, very hard, involving lots of decisions - some small, some large.  While the people who manage companies are very smart for the most part, lots of the decisions they make do not work out - as a glance at the business section of your favorite papers will attest.  Why is that?

Enlightened Self-Interest

The January 19th issue of The Economist has a special report on Corporate Social Responsibility (CSR).  "Corporate social responsibility, once a do-gooding sideshow, is now seen as mainstream," the report starts out saying.  "Why the boom?" it later asks and proceeds to answer: "For a number of reasons, companies are having to work harder to protect their reputation - and, by extension, the environment in which they do business." 

The report further explains, "More than ever, companies are being watched.  Embarrassing news anywhere in the world - a child working on a piece of clothing with your company's brand on it, say - can be captured on camera and published everywhere in an instant, thanks to the Internet."  It continues, "As well as these external pressures, firms are also facing strong demand for CSR from their employees, so much so that it has become a serious part of the competition for talent."

Why should a business embrace CSR, not just as a feel-good part of its advertising campaigns, but as a value truly ingrained in its culture?  In the past, experts have argued against the concept from multiple points of view.  Some point out that CSR is a sideshow for a business, which diverts its energies from its number one - perhaps sole - objective: making money.  Milton Friedman, arguably the most influential economist in the second half of the 20th century, argued succinctly in a 1970 article that "the social responsibility of business is to increase its profits."  Others point out that when a business engages in social activities, it is essentially playing with other people's - its shareholders' - money.  Then there are those who claim that social actions for the common good are the proper responsibility of elected governments, not of business.  In their view, companies' claims regarding CSR should be viewed with suspicion.

I think that CSR is a fascinating subject, because it goes to the essence of what business is all about.  The top priority of a company has to be making money - otherwise it will just not survive.  However, to then describe a company as solely a profit-making machine feels very one-dimensional and somewhat old-fashioned.