It’s not what you know but how the flow goes…

Earlier this month I attended a TED X program where I heard John Hagel talk about his new book, Power of Pull.  A basic tenet of the book is that in a world where the rate of change is forever accelerating, companies have to be willing to accept that they won’t always be able to plan they way they have in the past, instead needing to nimbly respond to rapidly fluctuating circumstances as they arise.

Among other things, he commented that because knowledge changes so rapidly, knowledge flow is more important than knowledge stock.  That reminded me of a YouTube video I had seen a couple of years ago called, “Shift Happens”.  Because it had been created in 2008, I figured it was a little out of date so searched for a more recent version and found it: “Shift Happens: 2010“.  Some of the findings that reflected the exponential rate of change in information Hagel referred to included:

  • The 10 most in-demand jobs in 2010 didn’t exist in 2004
  • An estimated 4 exabytes of unique information will be generated this year.  That’s more than the last 5000 years combined.
  • The amount of technical info is doubling every year.  That means for students in 4-year technical degree programs, half of what they learn their first year will be outdated by the time they finish their 3rd year.

For organizations to stay on top of information, and more importantly- to successfully innovate in this environment- they need to have scalable network relationships. That’s something that US companies are not particularly well-known for.  Paralleling the notion of the rugged individual, US companies want only breakthrough products and technology and are most likely to work alone.  [Yes, some are taking advantage of open innovation but they are still in the minority].  When companies do cooperate, it’s not unusual for the smaller company to get acquired by the larger partner.

The US is falling behind in innovation.  According to Insead’s latest Global Innovation Index, the US is #11 with Finland as #1.  Hagel warns that India and China are likely to rise to the top because they are so good at creating cross organizational relationships.  He gave an example of a Chinese company wanting to build a new motorcycle.  They sent out specs for each major component of the bike to competing companies with a deadline.  Whichever company came up with the best cost/performance response got the job.  This process was repeated throughout the original design process.  The result is “productive friction”, diverse groups working on challenges- with cooperation across organizations as is needed to complete the work.

For a long time I’ve advocated the importance of teamwork in innovation.  Hagel just took it to the next level.  It’s not just  about teaming among individuals but among organizations as well.  Because of the level of complexity, the solo inventor and the solo company is going to struggle.  The trick is creating an environment that fosters collaboration and, at the same time, allows for healthy conflict.  Not an easy task but one which American companies will need to master if they’re going to regain prominence in the world of tomorrow.

3 Responses

  1. […] This post was mentioned on Twitter by John Hagel, Margit HINKE and Spiro Spiliadis, francine gordon. francine gordon said: It's not the info you know but how the flow goes that matters #innovation […]

  2. kare Anderson September 11, 2010 at 12:24 pm |

    What an apt, timely post Francine. As Cisco (“Doing Both” book) and other companies are discovering, it is an iterative experiment – learning how to have systems that support collaboration anywhere inside and outside the organization with sufficient guidelines in place to encourage and reward people and teams to dare to collaborate. In this increasingly connected, complex and bottom-up world it behooves us all to learn from each other no matter what profession or industry or part of the world we look we may get insights about smarter collaboration these days.

    And, as Morton Hansen found from his research, bad collaboration is worse than no collaboration.

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