Thank you to many of you who not only have read ProVoke but also communicated your feedback and thoughts with me. Breaking the cycle of ‘habits’ to become disruptive and enable innovation at mass scale in large companies is not easy and does not happen overnight. Hence, I have been looking at other books that are tackling the concept of changing the mindset to innovation and in this blog (and blogs to follow) will be providing a review of these books. Happy reading!

Serial Innovators by Claudio Feser (2011), with McKinsey Company

Summary:

• “In two studies conducted by the University of Berne, researchers discovered a life expectancy for firms: only 50% live longer than 10 years, 15% live longer than 30 years, and only 5% make it to 50 years.”

• “How do we rewire the brains of management and employees? Use learning sessions, in which management and employees continually and systematically talk about how to make things better. This enables the organization to make improvements to processes and train brains to make new neural connections.”
• “Employees want to bring their whole person to work (i.e. their values, etc.) – not just their left brain/efficiency! Companies that acknowledge individual values (and align them with corporate ones) outperform those that do not.”

1. Summary of first 4 key bullet points:

• In Serial Innovators, Claudio raises some insightful points about the nature of firms (2012). Firms are ephemeral: they are born, they live briefly, and without constant innovation, they quickly age and die. There are many causes of the decline of firms. Some of them, such as individual rigidities or mental biases, are hard-wired into our brains. Yet, there are ways to counteract these obstacles to growth and innovation. One critical factor is building employees’ belief in their self-efficacy. Indeed, there is a positive relationship between employees’ belief in their ability to effect change, and their actual effectiveness in an organization. In addition, while it is true that we naturally rely on mental short-cuts, our brains can also be rewired and changed (the field of neuroplasticity focuses on this). One way to rewire our brains is through learning sessions, in which we continually and systematically talk about how to make things better. In doing so, we not only make improvements to processes but also train our brains to make new neural connections. Imagine if managers and executives were to implement these ideas. The possibility for innovation would be enormous!

2. Mental biases paragraph for your blog:

• Claudio discusses the types of “individual rigidities” that block people and organizations from innovating (2012). Drawing on findings from the field of psychology, Feser discusses four mental biases (heuristics, mental short-cuts) that humans tend to rely on and how to counteract them: optimism bias, loss-aversion bias, status quo bias, and representativeness heuristic. First, individuals tend to think that they are less likely to experience a negative event compared to others (optimism bias). This explains why many companies fail to realize that they are falling behind until it is too late. This trap can be avoided by regularly balancing prevailing opinion within the company with outside opinion and data, i.e. an independent board of directors, strategic advisors, etc. Second, people strongly prefer avoiding loss to acquiring gains (loss-aversion bias). Thus, many companies choose not to explore a risky but possibly highly lucrative area, because they fear losses more than they value gains. This can be counteracted by making people less accountable for losses caused by individual decisions (in other words, by not punishing smart risk-taking). Third, people tend to prefer the current state of affairs and resist deviating from it (status quo bias). Along with the optimism bias, this can make people view change of any kind negatively. One way to counteract this would be to take the status quo option off the table, in order to galvanize people to adapt to the change that is happening. Lastly, people tend to think that something that is more representative is more likely, and discount probabilities (representativeness heuristic). This can be counteracted by bringing in a diversity of backgrounds, experiences, and opinions into the organization. By doing so, the company is more likely to have accurate readings of ambiguous information.
• Two points are important to note here. First, mental rigidities are neither good nor bad per se. Such mental short-cuts are hard-wired into our brains, and they are critical to our ability to function effectively and efficiently. But in times of rapid change – or in fields that are rapidly evolving, such as tech, they can cause failure to innovate and adapt. Second, it can be difficult to get management to be willing and open to taking steps to counteract their own biases and those of their employees. However, all it takes is one visionary leader in the company to begin the process of change!

Adaptability (2012) by Max McKeown

1. Sound bites:

• “Avoid being too rigid AND being too flexible. Maintain a balance between staying open to new paradigm shifts, and not becoming obsessed with every latest development at the expense of progress. Don’t fall into either trap!”
• “Change organizational thinking at highest levels to change attitudes in the rest of the company.”
• *Important quote directly from the summary: “Peter Hedström, one of the founders of analytical sociology, investigated the process of convincing a majority to alter collective behavior. Hedström created computer models that looked at what is necessary for a large social group, a corporation, or even a society, to change direction. His models suggest that the majority does not need to be convinced for them or an organization to take actions in a particular direction. There need only be a majority at the highest level to convince a majority in most groups.”

2. Summary of first 4 bullet points:

• McKeown’s argues that effective adaptability is deliberately adapting faster and smarter than the changing situation or competition. It is critical for success in any rapidly changing and competitive field. Adapters are curious; they understand that stability is an illusion; they reach beyond limits of present capabilities to future possibilities; they come up with non-obvious and even crazy solutions, and embrace unconventional thinking. Three steps are required for adaptation: firstly, recognizing the need to adapt; secondly, understanding the adaptation that is necessary; thirdly, actually adapting as necessary (putting it into action). No one step without the others is enough. A key area is to understand how adaptation relates to innovation, disruption and provocation.

Ideas are free by: Alan Robinson & Dean Schroeder

1. Sound bites:

• “A revolution happens when managers seriously seek out and act on employee ideas.”

• “Most managers use lagging indicators of past performance (historical financial information) to judge how their company is doing. To promote innovation, they should look at leading indicators of their company’s future performance – i.e. the number of concrete ideas being implemented each week.”
• “Power of small ideas: organizations need a LARGE number of SMALL ideas to improve performance beyond a certain point! And, if a company is more adept at dealing with details, it can handle greater complexity (and set itself apart from competitors in the same field).”
• “Avoid rewarding individual ideas based on their value. There is a host of problems with this. Most important rewards are recognition and seeing your idea actually used (which produces pride). People want to be able to have an impact in the work that matters to them, to be effective.”

2. Summary of major points:

• “Through extensive research and work with more than 300 companies in dozens of industries, the authors explore the key factors that influence the quality and quantity of employee ideas. They also describe how ideas and idea management can be fully integrated into an organization’s structure and operations to create excellence and sustainable competitive advantage in every area — from productivity to responsiveness, keeping costs low, quality, and service delivery.”