Innovative Capability and Cognitive Excellence

Innovation is on everyone’s mind these days, and there are just as many opinions on how to become innovative. I was just reading an article on the Technology Review Blog – Four Principles for crafting your Innovation Strategy.

The four principles attributed to Joseph Schumpeter, author of the concept of Creative Destruction, are:

“Think big, start small, fail quickly, scale fast”,

The article goes on to describe the experience of the Netflix founder and CEO Reed Hastings, about how he experimented with a number of business models early on, killing those that were not effective, always guided by a ‘grand vision’ of what he envisages was possible. The article also comments that enterprises do not have a good process to emulate what Hastings did.

That comment got me thinking, easier said than done. What exactly is the capability that can discern what is a worthwhile trail to follow, and, when it does conduct experiments, which of those to ‘nip in the bud’ and which ones to encourage.

The example of Hastings as an innovator, while remarkable, is still the story of one brilliant mind. A lot has been written about the attributes of an individual innovator – the curiosity, the vision, the ability to take risk, the persistence and so on. Most of these processes in an enterprise are collectively managed. The challenge enterprises face is to replicate these very capabilities as a collective entity. And, it is there I believe that it falters.

On the one hand, the enterprise needs a well-honed ability to quickly spot important emerging trends and in particular the confluence of trends that will likely have a significant and interesting impact on its own business models and trajectory. Such an ability would in some cases lead to the ‘grand vision’ that Hastings enjoyed. If it is shared widely enough, it could become the conviction and generate the commitment to provide consistent guidance in the course of its experimentation and initial faltering steps. I see this competence as “Cognitive Excellence”.

Of course, we know that it is not enough to have insight and vision, but an organization then needs the ‘character’, the gumption to take risks and the persistence to work on the idea till it can make it work, and once again, ‘cognitive excellence’, to recognize when a pursuit needs to be abandoned.

So while we admire the abilities of people like Hastings, the urgent work in front of us as enterprises, is to practice and develop a keen sense to identify the big opportunity and to spot early when ones experiments are not on track to lead to the vision.