What We Don’t Know We Know

February 22, 2010

Last night I went to a seminar.  On the whiteboard, the seminar leader drew an oft-used framework:

There are things you “know.”  For example, I know I can speak English.

There are things you “know you don’t know.”  I know I can’t speak Chinese.

And there are things you “don’t know you don’t know.”  Obviously I don’t have any examples of this.

But it got me thinking.  There is one dimension that is never mentioned…

There are things you “don’t know you know.”

Inside of organizations, there is so much untapped knowledge.  To combat this, over the past two decades, companies have invested millions of dollars in knowledge management systems.  The objective has been to capture the company’s knowledge.

The problem is, the knowledge management databases usually become so large and unwieldy that they are unusable.  I can attest from experience that these systems often end up becoming digital piles of untapped information.  Finding what you want can be like finding a needle in a haystack.  Or, more accurately, it is like finding a specific needle in a stack of needles.

What’s the solution?

You might call it, “reverse knowledge management.”

Instead of posting knowledge which sits passively in a database waiting for someone to find it, you post your question to your “community” so that it can be answered at the time of need.  Of course, asking the world for an answer to your question is not new.  Yahoo/Google Answers did this a few years back.

But internally, especially when you have already invested in knowledge management systems, the dynamics can be quite different.

If you are using an internal collaboration tool like InnoCentive@Work, you might find that reverse knowledge management is an unintended benefit.  When you have a challenge you want solved, the odds are, someone else within your organization has already solved a similar problem.  But you probably don’t know who knows the solution or where to find the solution.

Sometimes the solution can be sitting in your knowledge management system…and you don’t even know it because it is too difficult to find.

Interestingly, “requests for information” posted on internal collaboration tools are sometimes solved not by the individuals with the expertise, by rather by the knowledge management team.  When a question is posted, the knowledge management team masterfully scours their databases to find a solution.  The advantage of this approach is that those with expertise in navigating the knowledge management systems do what they do best, thus freeing the rest of the organization to focus on what they do best.  And it has the added benefit of breathing new life into your old knowledge management initiatives.

So, what is it that you organization doesn’t know what it already knows?

P.S. I have to admit that I am a bit surprised.  If you Google “reverse knowledge management” (in quotes) you will see that the only place this term is used on the entire internet is in this article.

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When Open Innovation is not a Tournament

February 18, 2010

A magazine asked me to write a book review of Innovation Tournaments by Christian Terwiesch and Karl Ulrich. The book arrived in the mail yesterday and I immediately turned to the index to see if InnoCentive was listed. Sure enough, we are mentioned in several places in the book.

This got me thinking: Is InnoCentive a tournament?

The word tournament is derived from the French word for “medieval sport” and is now used to describe a wide variety of competitions.

Most competitions/tournaments are quite entertaining. And by their very nature, there is always a winner. One could argue that tournaments are “spectacles designed to find a champion.”

Given this widely held point-of-view, using the word tournament as a descriptor of InnoCentive seems to be inaccurate.

The NCAA basketball championships are a tournament. The “World Series of Poker” is a tournament. American Idol is a tournament. With each of these, there is always a winner. The purpose of the tournament is to find that winner while (usually) providing entertainment value.

InnoCentive is not interested in finding a winner for the sake of naming the champion. The objective is to find workable solutions to real business problems. Their approach is one I call a “contingency-based, value-driven pricing model.” Admittedly, that does not sound as sexy as calling it an innovation tournament.

Here’s how it works. A company has a problem they want solved. They decide the “value” of finding a workable solution and they offer a “bounty” to anyone who can provide one. The bounty is only paid when they get what they need. This “pay for solution” model outsources the risk associated with complex problem solving.

Here are other examples that illustrate the key difference between the bounty-based approach with the tournament-based approach.

The NetFlix Prize was not a tournament.  They only paid the team that improved the recommendation engine by 10%.  This makes is a bounty-based approach. You only pay the bounty when you get a successful solution.

In contrast, The Cisco iPrize, can be thought of as a tournament. According to their website, they will “select up to 32 semifinalist teams that will work with Cisco experts to build a business plan and presentation… Up to eight finalist teams will present their business ideas to a judging panel to compete for the grand prize: a $250,000 award shared equally by members of the winning team.”  The LG Electronics competition (read my article on it here) was also a tournament-based approach.

The key difference is the way the challenge is articulated.  With the bounty-based approach, the success criteria is clearly defined and you know if someone provided a successful solution:  Did you improve the recommendation engine by 10%?  Did you find a chemical compound that has specific properties?  Did you develop a mathematical model that optimizes solves a specific problem?  The “winner” of the bounty is determined by this success criteria.  If the criteria is not met, the bounty is not paid.

With the tournament-based approach, the success criteria is not defined.  The winner is the “best” of the submissions.  Although these types of competitions can yield excellent solutions, I know from inside-information that the results are often less than stellar.  One company that uses this type of tournament described the results as a “PR success yet a commercial failure.”

Both approaches can provide value to any organization.  It’s just important to recognize that they are useful in different ways.  Tournaments can be great to get a broad set of ideas for an undefined space.  Bounties are great for when you are hunting down usable solutions.

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Interview on The Small Business Advocate

February 17, 2010

Jim Blasingame is one of the best talk show hosts out there. And I had the pleasure, once again, of being on his show. This time I talked about the challenges associated with innovation and the value of open innovation.


This was my 6th appearance on his show. You can listen to all of them here.

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Three Innovation Distinctions (Part 3): Diversity not Homogeneity

February 1, 2010

This is the third of my “innovation distinctions” entries. [for your convenience, all three articles have been packaged into one pdf file]

In the first part of this series, I wrote why you should focus on “Challenges, not Ideas.” Next, I addressed the distinction of “Process, not Events.”

In this final entry, I discuss why innovation requires “Diversity not Homogeneity.” Be sure to read the previous two articles before reading this one.

As mentioned in the other blog entries, I first shared these distinctions with a group of speakers and authors who were brainstorming ways to improve the learning experience for other speakers and authors who attend their conferences. Here’s the Catch 22: Having only speakers and authors speaking to other speakers and authors does not lead to much creativity. Most of the “ideas” presented are well-worn and don’t address the “real world” outside of the industry.

Therefore, my last suggestion to the group was to increase the level of diversity at these learning experiences. This would provide a wider range of ideas, suggestions, and points-of-view.

How does diversity apply to an organization?

Diversity can mean a wide variety of things:

  • Diversity of race, creed, color, sex, etc
  • Diversity of innovation styles
  • Diversity of disciplines

I won’t address the first point as that has been a topic of discussion for decades. Let me tackle the next two.

Diversity of Innovation Styles
The second point ties directly to my Innovation Personality Poker system.

In the card-based game, I discuss the four primary innovation styles: analytical, creative, planning/action, engagement.  Most organizations favor one over another and therefore do not have a good balance of styles. There’s a reason for this.

Although homogeneous teams are often more efficient (i.e., you get things done faster), having a bunch of “yes men” working for you is not the answer for long-term growth. When people think too much alike, new ideas struggle to surface. In these homogeneous climates, innovation and growth (i.e., effectiveness) suffer.

The essence of successful companies, then, is the ability to be both efficient and effective. They are able to focus on both production and innovation, not just doing things right but also doing the right things.

There’s plenty of evidence that team diversity translates directly into corporate profits. Sigal Barsade and colleagues at the University of Pennsylvania’s Wharton business school studied top management teams at large corporations in the United States. Interestingly, the more diverse the functional roles of the members of those teams were, the greater the average, market-adjusted financial return in those companies. Diversity of the top leaders translated into bottom-line results.

In Personality Poker, there are four key concepts:

  • You need people in your organization “play to their strong suit.” That is, make sure that everyone understands how they contribute to and detract from the innovation process. This includes ensuring that you have the right people with the right leadership styles in your organization.
  • As an organization, “play with a full deck.” You must embrace a wide range of innovation styles. Instead of hiring on competency and chemistry, also hire for a diversity of innovation styles. Every step of the innovation process must be addressed. You need people who are great at conducting research, delivering results, developing plans and reports, building relationships, and creating new ideas, amongst other things.
  • Deal out the work.” That is, you must divide and conquer. You can’t have everyone in your organization do everything. Instead, get them to divvy up the work based on which style is most effective at a given task. You can’t have everyone generating ideas, or focusing on planning.
  • Recognize that in order to treat everyone the same, you must treat everyone differently. People have different needs in terms of how they like to be managed, how they like to be praised, and how they want to contribute to the organization. In order to attract and retain a well-balanced organization you must be prepared to treat people as they want to be treated. To do this, you must overcome the inertia of your company’s personality and embrace the needs of the individual personalities.

I could write a whole book on the value of diverse teams.  Oh, wait, I did!  My Personality Poker book will be published by Penguin’s Portfolio imprint Fall 2010.  Throughout, I provide examples of, and evidence for the value of having a diversity of “styles” within your organization.

But what about the third type of diversity: The diversity of disciplines.

Diversity of Discipline
A discipline is any area of expertise like biology, chemistry, physics or mathematics. You can have an organization comprised of diverse innovation styles while sharing only one discipline.

A while back, I spoke with Al Bredenberg, Senior Researcher from ILO Institute. He subsequently wrote an excellent blog entry on the topic of diversity where he quotes me. He also mentions a Harvard Business Review article by Lee Fleming that suggests that companies with less diversity of discipline produce better overall financial results than highly diverse ones.

“The financial value of the innovations resulting from such cross-pollination is lower, on average, than the value of those that come out of more conventional, siloed approaches. In other words, as the distance between the team members’ fields or disciplines increases, the overall quality of the innovations falls…. But my research also suggests that the breakthroughs that do arise from such multidisciplinary work, though extremely rare, are frequently of unusually high value—superior to the best innovations achieved by conventional approaches…When members of a team are cut from the same cloth, you don’t see many failures, but you don’t see many extraordinary breakthroughs either.”

However, as the diversity of disciplines increases, “the average value of the team’s innovations falls while the variation in value around that average increases. You see more failures, but you also see occasional breakthroughs of unusually high value.”

Therefore, although there is value to diversity of disciplines, the challenges seem to outweigh the benefits.

What’s the solution to having a diversity of disciplines without having to deal with the inherent complexities?

Open Innovation. By working with companies like InnoCentive, you get the value of discipline diversity while having few of the downsides.  You get the take advantage of a wide range of experiences while only paying for successful solutions.

I will write more on Open Innovation in subsequent entries.

The Bottom Line
Diversity can create incredible value for an organization. It can help facilitate the innovation process. It can help increase the quantity and quality of breakthrough ideas. The key is knowing the right way of managing and engaging a diverse set of perspectives.

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