How To Manage Innovation In Your Organization

innovation-policy.png

Monday, 7.53pm

Sheffield, U.K.

Exploration is the engine that drives innovation. Innovation drives economic growth. So let’s all go exploring. – Edith Widder

I’ve been looking for definitions of innovation on the basis that you need to know what it is before you can figure out if you’re doing it but it’s rather hard to find a general definition. The thing is that innovation happens in many places – you can be innovative in the way you bring up your kids, innovative in the way you manage your team and innovative in the way you model crystalline structure.

While looking for information on innovation I stumbled on Hemphill’s 2003 paper on innovation governance that sets out a useful framework to think about managing innovation. It’s within the context of national policy but I think it could well apply at the level of an organization or even a family.

Innovation is the most important driver of modern industrial economies – you’re constantly being marketed the newest and the best, and the only reason you will buy something is because it’s better than what you have now. A huge amount of time and investment goes into creating the products and services that you use.

But you can’t allow the creation and sale of any old product so there are rules in place. And the oldest of these rules is the “precautionary principle”, which essentially comes down to do no harm. You have to show that your product or service is safe, that it doesn’t harm people. That means your car’s brakes need to work and your medicines need to have acceptable side effects. If you’re not sure that there’s a problem then you have to take action to minimise the risk.

This principle works and keeps us safe but it also acts as a deterrent to innovation, increasing the costs of bringing something new to the market. So another approach to innovation governance is “responsible innovation”, which is about encouraging the development of products that are good for society. The most visible aspect of this approach is the grants governments provide for socially beneficial product development. These incentivise everything from the deployment of digital infrastructure and skills to clean energy technology.

An alternative approach to innovation is to get the blockers out of the way – to encourage “permissionless innovation”. This means letting people get on with developing new products and services and only stepping in when you can see that harm is being caused. There are benefits to this approach because it reduces the cost of innovation but it also creates a risk that the innovators go too far. An example of this might be the financial sector which creates complex products that are supposed to make it easier for people to access funding but that also introduce unpredictable systemic risks that regularly threaten to destroy the fabric of society. It hasn’t happened yet, though, so it must be ok.

The last method of innovation governance is to require that you think about the impact any new policy is going to have on innovation. An argument against work from home, for example, is that people can’t innovate unless they’re together in one place. If that assumption is not true – if your best people can innovate from anywhere – then they’ll move to companies that let them work the way that’s best for them. You have to be certain that your policy is really about encouraging innovation and not a disguised way of getting people back into the office where you can keep an eye on them. Another example in business is giving people time to work on the business rather than just in the business – they can’t make things better if they’re busy firefighting every working minute.

Hemphill’s argument is that the precautionary principle is restrictive. It gets in the way and can stop ideas from getting traction. And it’s possible that powerful interests can use it to keep things the way they want, in the way that best suits them.

A good way to balance innovation and public safety is by combining permissionless innovation with responsible innovation. This removes barriers to innovation but makes it clear that innovation should be for the good of all. Encourage innovation that helps people.

In a nutshell, get out of the way and let innovative people get on with doing what is good for society.

Cheers,

Karthik Suresh

References

Hemphill, T.A., 2020, “The innovation governance dilemma: Alternatives to the precautionary principle”, Technology in society.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: