Unit 3: Discussion 2 Week 3 MBA695

Strategy in Practice

Where Do Innovative Strategies Come From?

What makes a business innovator such as Thomas Edison, Steve Jobs, or Jeff Bezos different from a typical manager? How did they come up with the innovative ideas that helped them found General Electric, Apple, and Amazon.com, respectively? Is it genetic? Where they born intuitive and divergent thinkers?

Research by Jeff Dyer, Hal Gregersen, and Clayton Christensen reported in The Innovator’s DNA confirms others’ work that creativity skills are not simply genetic traits endowed at birth, and that they can be developed. In fact, the most comprehensive study confirming this was done by a group of researchers, Merton Reznikoff, George Domino, Carolyn Bridges, and Merton Honeymon, who studied creative abilities in 117 pairs of identical and fraternal twins. Testing twins 15 to 22 years old, they found that only about one-third of the performance of identical twins on a battery of 10 creativity tests could be attributed to genetics. In contrast, roughly 80 percent of twins’ performance on general intelligence (IQ) tests could be attributed to genetics. So general intelligence (at least the way scientists measure it) is basically a genetic endowment, but creativity is not. Nurture trumps nature as far as creativity goes. That means that about two-thirds of our innovation skills comes through learning—first, from understanding the skill, then practicing it, and ultimately gaining confidence in our capacity to create.

If innovators can be made, then how did Edison, Jobs, and Bezos come up with their great ideas? Five discovery skills distinguish innovators from typical executives.31 First and foremost, innovators count on a cognitive skill called associational thinking, or simply associating. Associating happens as the brain tries to synthesize and make sense of novel inputs. It helps innovators discover new directions by making connections across seemingly unrelated questions, problems, or ideas.

Innovative breakthroughs often happen at the intersection of diverse disciplines and fields. Author Frans Johanssen described this phenomenon as the Medici effect,32 referring to the creative explosion that occurred when the Medici family brought together creators from a wide range of disciplines—sculptors, scientist, poets, philosophers, painters, and architects—in fifteenth-century Italy. As these individuals connected, they created new ideas at the intersection of their respective fields, spawning the Renaissance, one of the most innovative eras in history. Put simply, innovative thinkers connect fields, problems, or ideas that others find unrelated.

The other four discovery skills trigger associational thinking by helping innovators increase their building-block ideas. Specifically, innovators engage the following behavioral skills more frequently.

Questioning. Innovators are consummate questioners who show a passion for inquiry. Their queries frequently challenge the status quo, or push people to think differently. One of Steve Job’s favorite questions was: “If money were no object, what kind of product would we create?” He wanted Apple engineers to imagine the perfect product—and then try to design and build it. Innovators ask questions to understand how things really work, why they are that way, and how they might be changed or disrupted. Collectively, their questions provoke new insights, connections, possibilities, and directions.

Observing. Innovators are also intense observers. They carefully watch the world around them, and their observations of customers, products, services, technologies, and companies help them gain insights into and ideas for new ways of doing things. Steve Jobs’s observation trip to Xerox’s research lab, the Palo Alto Research Center (PARC), provided the insight that was the catalyst for both Macintosh’s innovative operating system and mouse and Apple’s OSX operating system.

Networking. Innovators spend a lot of time and energy finding and testing ideas through a diverse network of individuals. They actively search for new ideas by talking to people who may offer a radically different view of things. For example, Steve Jobs was told by Apple Fellow Alan Kay to “go visit these crazy guys up in San Rafael, California.” The crazy guys were Ed Catmull and Alvy Ray, who had a small computer graphics operation called Industrial Light & Magic (the group that created special effects for George Lucas’s movies). Fascinated by their operation, Jobs bought Industrial Light & Magic’s computer animation group for $10 million, renamed it Pixar, and eventually took it public for $1 billion. Had he never chatted with Kay, he would never have purchased Pixar, and the creative Toy Story, Monsters Inc., and Finding Nemo films might not have been produced.

Experimenting. Finally, innovators are constantly trying out new experiences and piloting new ideas. Experimenters explore the world intellectually and experientially, holding convictions at bay and testing hypotheses along the way. They visit new places, try new things, seek new information, and experiment to learn new things. Jobs, for example, tried new experiences all his life—from meditation and living in an ashram in India, to dropping in on a calligraphy class at Reed College. All these varied experiences triggered ideas for innovations at Apple.

Collectively, these discovery skills—the cognitive skill of associating and the behavioral skills of questioning, observing, networking, and experimenting—constitute “The Innovator’s DNA,” or the code for generating innovative business ideas.

Reference

Dyer, Jeffrey, H. et al. Strategic Management: Concepts and Cases. Available from: MBS Direct, (3rd Edition). Wiley Global Education US, 2019.