Category Archives: linkedin

Five Scary Thoughts for Halloween

Posted on October 31, 2010 | 3 comments

Waiting for my first trick or treater gets me to thinking about some of the ideas floating around our society that I think are really, really scary. Here are my Top Five:

5. Why do you want to make your ideas public? Said just last night by a kind man who admitted he never had visited a blog (which is pretty easy for him to not do as he does not own a computer.) Now this individual is also quite educated and reasonable, but I could tell as I described blogging and tweeting to him that he could not comprehend why people would see any benefit in sharing ideas as broadly and as often as possible. Given the difficulty and complexity of the problems facing our species right now, I see no alternative but to be part of the Great Insight Stream, from each according to his abilities, to each according to her needs. (said tongue in cheek.)

4. A great leader makes decisions quickly and never compromises. Oy!! Who came up with such a ridiculous notion? Maybe somewhere there is still an organization that can afford leadership by gut instinct and ideology (more on that later), but I’m not hearing too many success stories these days along those lines. Even an NFL quarterback needs to read the defense, work through his progressions, and make the right decision, which is often a compromise from his first choice.

3. I have the right to be invisible . OK, I admit you probably haven’t heard anyone say this directly, but if you listen carefully this is exactly the argument some people are making when they claim the right to privacy. If you think about it, most if not all of our actions have always been visible, but only to that limited number of people who could “see” what we were doing at any given time or place. If any of us did something criminal, the authorities would then go look for those witnesses who could testify to what they had seen. For the most part, today’s technologies don’t make activities more visible but they do reliably make a record of ALL visible activities; the digital record acts as the new witness. I myself am not sure where to draw the line here; some type of consensus will emerge. But I think we need to be clear that the right to privacy does not mean the right to be invisible.

2. If you’re a progressive, you believe in big government. Aaargh!! I consider myself a progressive because I believe humans have a lot of upside potential and as we collaborate and share more knowledge we will find better ways of doing just about everything. This does not mean, however, that I believe government has to do most of the heavy lifting. In fact, I fully expect Government to be one of the things we will find a better way of doing.

1. The US will become stronger if it returns to the past. It pains me that this even needs to be argued, but there you have it. Its funny how organizations in trouble and societies that become less confident revert to the same argument: we need to return to the principles of our glory days and just execute them better. Please, someone, show me one example where this strategy has actually worked. Deterioration in our competitive postures doesn’t occur because we’ve abandoned our principles; it happens mostly because the environment around us is changing. Ideologically-based attachment to old ideas is the greatest sin of politics.

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Posted in Change, Democracy, Government Performance, Internet, Leadership, linkedin

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Attitude Adjustment

Posted on September 27, 2010 | 3 comments

A Twitter mate wrote me that the “Collapse” meme was strong on the internet today. “Collapse of what?” Of the US empire, of course. I myself had fed the meme earlier in the day by ReTweeting a reference to Otto Scharmer’s blog post from earlier this month where he wrote how stark the decline in the US appears after returning from a summer of visiting more vibrant nations overseas. (Otto Scharmer is a Senior Lecturer at MIT.) Scharmer also referenced the arguments of Johan Galtung, who predicts the fall of the US empire by 2020.

I think the evidence is pretty clear that the US is in a period of economic decline relative to much of the world–we’re just not growing as fast as they are. The US, which accounted for 50% of the world GDP immediately after WWII, accounts for something like 20% today, and as long as other, very large economies such as India, China, and Brazil continue to grow at 2 to 3 times the US rate, our share of the world economy will decline further. The Congressional Research Service in 2007 cited statistics that by 2025, the Chinese GDP would be 50% bigger than that of the US, although its per capita income would still only be about 40% of the US level.

This need not have any significant impact on US prosperity; in fact, overall growth in the world economy, if we manage it responsibly and sustainably, should be a good thing for everyone.  But it will change the dynamics of the world economy in ways we cannot fully anticipate today. World capital flows will change, US foreign investment patterns will change, other economies will become centers of world-class innovation and education, human talent will flow in different directions, and world investors will have many more stable options to park their long-term funds.

It’s harder to tease out exactly how these changes will alter US ability to project power, but the strong sense is that they will, even if, and this is important, countries such as China, India, and Brazil never have a bad word to say about the US. Leaner defense budgets are in our future. And I also suspect that, as these other countries emerge as world economic engines, the mantle of economic and diplomatic leadership will at first imperceptibly but eventually steadily slip off US shoulders. As China becomes the EU’s largest trading partner, for example, it will only be natural for Bonn and Paris to worry more about what Beijing thinks. Again, this need not be a horrible thing.

But we can certainly turn it into a horrible thing. That’s the problem with all this “collapse of empire” talk. It tends to feed the tendency of Americans to think we’re on the road to ruin and that therefore drastic measures are necessary to reverse the dynamic. Now that would indeed be unfortunate, because it is exactly this kind of overreacting that could lead to a messy denouement. Grandstanding and puffing out our depleted pectorals will only divert us from what we need to do, which is to begin to shift money away from military-oriented spending to investments in human and societal development that will allow us to compete effectively in a more balanced world. (And by the way, I don’t think it’s up to government to do all the investing.)

Generally I’m bullish about the US capability to do well in this competition. But one not so small thing gives me pause. America’s mental shortcuts for thinking about the rest of the world are not very helpful, and these shortcuts unfortunately spring from our founding legends and myths. So as Americans we learn that:

  • We were founded by people who wanted to escape the messy ways of bickering nation-states and it’s best to remain independent from them and Self-Sufficient.
  • Almost all problems scale to individual solutions. At worst, maybe every once in a while Americans have to voluntarily form a small group to tackle something difficult. (The only real exception to this is the military) So essentially we believe Complexity is Un-American.

So let’s stop writing about the collapsing empire–and please don’t bring in the comparison to Rome, which after all occured like 2000 years ago. I’m tired of it already and it’s just applying old vocabulary and concepts to describe a world dynamic that will be new, different, and exciting. And let’s concentrate on what really matters–a long overdue Attitude Adjustment.

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Posted in Change, Foreign Affairs, linkedin

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Lessons from a CIA Heretic

Posted on September 20, 2010 | 5 comments

Last week I told a story at the Business Innovation Factory Summit, a wonderful event that I was blessed to attend. The storytellers were awesome. (Let me also give a big shout-out to my friends and reverse mentors Tony and Jen Silbert of Innovation Partners, who were the kind folk who connected me to Saul Kaplan and all the wonderful people at the Business Innovation Factory.) I was talking to a friend last night about all the interesting people I met and I couldn’t talk fast enough to keep up with my memories.

Anyway, even as a retired CIA person, I still need to get public or published comments approved if they deal with subjects pertaining to my CIA employment. And so this forced me to actually write out a draft of my extemporaneous comments to submit to the publications review board. You can catch the differences (not that significant) between what I wrote and what I said here, where you can download the MP-3 file of my remarks. So I thought I would post that text below. I think particularly toward the last half there are some ideas I rushed through or omitted that might be of some interest. I’m sorry it’s so long…

TALK BEGINS

My hope is that 15 minutes from now you will have developed your own answers to the following three questions or at least be provoked to think about them.

The questions are:

1.  Is the perception of the CIA in the popular media accurate, distorted, and/or useful to the organization and US national security?

2.  What is the motor that runs the world? Is it the secret agreements and machinations of men (and historically it’s been men) getting together in smoke-filled rooms generally up to no good; or, Is it the large dynamic and trends that emerge on the planet from God knows where and set in motion events that elude our attempts at prediction and manipulation.

And

3.  Are we the world?

So question 1. The perception of the CIA. Now first I have to tell you that I hate spy fiction and spy films and I even dislike nonfiction about the topic, so I’m not the best person to have an opinion as to whether the common perception out there is accurate. But I can tell you a little bit about my early days at the Agency. That’s a start.

Unlike many young people I’ve met over the years, I never dreamt of working for the CIA. As the first person in my extended family to graduate from college, I of course had no idea what I was supposed to do with the degree I was earning but because I was a college debater I’d always assumed I would be a lawyer. Until at Catholic University I started meeting law school students and went “OOOO….I don’t want to end up anything like them.” At that point I was at a loss. The only thing I was really interested in was the world, and so I thought well, I’ll go to Georgetown for graduate school. And so I did and the first semester there was a CIA recruiter on campus and I said sounds good. That’s the sum total of the story.

Now when I first joined the Agency, in 1978, it wasn’t what we would call a very diverse environment. (and even today Agency leaders are not satisfied with the level of diversity in the organization.) In later years I would tell people that I used to wander the halls searching for another Latino or Latina, because someone had told me there was another Puerto Rican working in the Agency and I was determined to find that person. Now that story is not specifically true, but it is generally accurate, if you get my drift. I used to get strange comments, like people in a conversation suddenly volunteering, in a culinary non sequiter,  how much they liked Mexican food or assuming that I would only want to work on Latin America. But for the most part, the Agency environment was a meritocracy, specifically I can say that about the analytic directorate where I worked, and I can’t point to any particular issues. In fact, when I would speak on college campuses kids were always asking me to comment on how being a woman and Latina affected my career, and I always told them the truth, that neither had as near the effect as being a different type of thinker—but I’ll talk more about that later.

I soon learned that most of the work at the Agency was, well, like the work at any other knowledge organization, although of course we didn’t use that term then. (By the way, given the malodor in which managers and management are generally held, I just don’t understand why consultants banded together and decided they could make a lot of money pitching organizations on Knowledge Management, but I digress.) True, the CIA is by law responsible for carrying out covert actions, an activity that, for my taste, assumed a heck of a lot about the planning abilities and foresight of the average American, whatever, but for some time now great powers (another term I rather dislike) have assumed they needed the ability to do some things secretly to make their way around this big, blue planet and, rather endearingly, the US decided to give this activity a legal structure. But much, most of what most Agency employees do has very little to do with covert action. It has to do with trying to make sense of the world, and trying to gather information about the world that others would rather us not know, so it’s a bit like trying to figure out what Steve Jobs is going to do next at Apple. But for the press the CIA is like the Lindsay Lohan of government. No matter what we do, how insignificant or banal really, it makes headlines and it’s always bad. “CIA uses solar-powered lawn mowers!!” Ridiculous!! I guess stories about the CIA sell newspapers, if anyone bought them anymore. I had a colleague at the Agency, wonderful fellow, who started every morning reading multiple newspapers (and he also has his office decorated with Brooklyn Dodgers memorabilia, so you know the type—salt of the earth.) And for the last six or seven years, I would stick my head into his office and say, “You know, newspapers are dying.” It was really mean of me.

So this is a good point to start making the segue to the second question, which as you recall has two parts. So I’ll repeat them.

What do you think is the motor that runs the world?

Is it the secret agreements and machinations of men (and historically it’s been men) getting together in smoke-filled rooms generally up to no good or

Is it the large dynamic and trends that emerge on the planet from God knows where and set in motion events that elude our attempts at prediction and manipulation.

So right about now, I’m going to start connecting my comments to the topic of innovation, which will be very exciting, I think.

So my point in asking you to think about this question is that how you choose and/or what reality is tells you a lot about what kind of intelligence organization you’ll need. If you think that the world is driven mostly by the secret deals and aspirations of powerful people—the Hitlers, the Communist Party of the Soviet Unon, Mao Tse Tung, Idi Amin, Saddam Hussein, Osama bin Laden, I’m desperately trying to think of a likely woman here—then you will conclude that you need some kind of capability to figure out what these people are doing, to ferret out their secrets. To protect our nation from some very nasty ideas these individuals cook up. And you may also want an organization that can impede their plans, cross your fingers.

But if you think that most of the forces the US will need to navigate are not specifically man-made, or at least not specifically made by one man or a small group of them–then you need a different kind of organization. If what matters is that the US understand the trends in the world, like globalization or the emergence of new economies such as India and China and Brazil (which clearly no one is like trying to keep a big secret) than spending a lot of time digging out secrets seems not as important, and what you really want is to have your hand on the pulse of the world, to be out there sensing and in many ways just being part of the whole big ride.

Now of course the question is a false dichotomy, because it is not either/or, and both dynamics can exist at the same time. But what is critical for understanding the CIA and why I spent my last 20 years there as a frustrated innovator, is that much of the Agency’s theology and modus operandi are built on the first assumption. This was the driving principle in the Cold War—countries hostile to us are planning to destroy us and do us harm and we’ve got to get out there and figure out what they’re up to. And of course it’s a Mad Magazine Spy vs. Spy world and the bad guys are trying to figure out what you know, so you have to be secret about everything, be very, very quiet, and trust no one.

It’s all very tiring but it was all very important up until about 1990 or so, which curiously, now that I reflect back on it, was when I published my first article in Studies in Intelligence arguing that we needed to do analysis in new and different ways. We needed to recognize that policymakers often knew as much about the open world as we did and that these newfangled operations like CNN were providing news faster than we could and well we needed to adjust. And then the internet came along and the Agency was really thrown for a loop. One has to understand that for intelligence organizations how one handles information is not a secondary or enabling activity. Handling information is the essence of our mission so that changes here are doctrinal and theological. Well, of course, we had a really hard time figuring out what to do, and I would argue we are still having a hard time.

This period, the 90s, ended up being the most difficult of my Agency career because it just became harder and harder for me to reconcile what I believed needed to be done with what the Agency was actually doing. There was a small group of us that I in any case referred to as the Rebel Alliance. We tried to raise the Agency’s awareness of how the world was changing around it, we would bring in guest speakers to talk about Change—how naïve it all seems in retrospect. During this time, and I’m afraid this is a danger all innovators run, I began to get the reputation of being cynical and negative…positive thinking has its limits, you know. During a reception up in NYC around then, I was approached by someone who had been watching me, I remember she worked for DuPont, who said. “I can see you are a heretic in your organization. And I just want to tell you that you need to learn to live with the feeling of discomfort all heretics get. In fact you need to learn to be comfortable with these feelings of discomfort. Not just comfortable, you need to learn to like, love them, because when you get those feelings then you can be sure you are being true to your convictions.” I never spoke to this person again and I’m convinced she was one of the two guardian angels I’ve encountered in my life. (If you want to know the other one, catch me later!!)

Despite all this doom and gloom, I spent the last ten years or so of my Agency career as a senior executive—and ended up in positions of increasing responsibility. I wish I could tell you exactly how I as a heretic innovator managed to succeed in the system anyway, but part of it was just sticking to it, many good friends and mentors—especially reverse mentors, and that extremely important variable in all plans—luck. By 2005 I was part of the executive team that led the analytic Directorate, the Directorate of Intelligence. Very soon after I assumed that position, a young man and his manager approached me about an idea they had at that time to use the media wiki software to create an Iraqipedia so that analysts throughout the Intelligence Community could collaborate and work together on the problem set. I thought what a great idea but did they know that the Agency was OK with using collaboration software as long as you only collaborated with people within the Agency. No, they didn’t, they said. And I said that was OK because I doubted anyone in the bureaucracy realized any longer this stricture existed so let’s proceed, full speed ahead. (It never ceases to amaze me how bureaucracies create rules at a rate no human can ever remember, not even bureaucrats.)

So that was my small role in getting Intellipedia started, which is still viewed by many as the most important adjustment the intelligence community has made to the Internet Age. Nothing came easily and I remember Sean and Don, the two heroes who ended up pushing the concept throughout the intelligence community and winning last year one of the Service to America awards given to outstanding civil servants, often asking in frustration if we couldn’t just MAKE everyone use Intellipedia. To which I said, wrongly or rightly, no, we can’t. I happen to believe organizational change is a lie—organizations don’t change, people do, and each person changes for particular reasons of their own. You can’t make people think differently. You can create an environment where they can have a Eureka moment. You can MANIPULATE them into thinking differently. But you can’t FORCE the issue.

Not only that, many in the intelligence community then, and perhaps now, didn’t think ideas such as Intellipedia were such good ideas in the first place. Virtues of Intellipedia such as transparency don’t sound too hot to intelligence professionals accustomed to clandestinity. The CIA and Intelligence Community also were hung up on the concept of authoritative views. National Security intelligence is just too important to be handled through collaborative processes, they would argue. During this period I came to the exact opposite view. Making sense of the world is so hard and so important that it demands collaboration with as broad a network as possible. It was around this time that this thought entered my mind: The CIA will end up being the last secret organization in the world. And being the last of anything is never a good thing.

And so back to the question. I actually think the answer to it is very complicated. But I do believe that more of what will be important to US prosperity in the future will lie in the second dynamic and our success will depend on how well we understand these large shift changes underway and are able to engage them. Here’s where the imbalance of the Intelligence Community really can hurt us. To deal with the first circumstance it’s important to be a closed network. But to understand and prosper in the second dynamic it’s best to be an open network.  What we have here is a real innovator’s dilemma.

Which brings me to the last question: Are we the world? In the immediate aftermath of WWII, the US was 50% of the world economy. We also make a big deal of how we led the world in innovation, but of course most of that was probably just a function of our size. So during the Cold War we dealt with the world as if we were the world. We called the shots. And that is the world our intelligence community learned to function in. Of course individuals were ready to share secrets with the US government because we were after all where the action was.

That world is ending very rapidly. The world to follow will be a good world too. A world in which the US will remain very influential and prosperous. But once the US represents, let’s say 10% of the world economy, which could happen in most of our lifetimes, the arithmetic of dealing with the world from a position of absolute strength sort of falls apart. Much of the American public, from what I can tell, doesn’t appear ready for this turn of events. We learn, as kids, that America owes its prosperity to its independence from the rest of the world. It is part of our founding myth. We also believe that the world and its problems scale to the capabilities of individuals or small groups of individuals, freely associating. So in a very real sense, Complexity is Un-American!

That’s why one of my passions now that I’ve retired from the Agency is to do what little I can to help Americans think about connecting, about working in open networks, about transparency. I believe as a successful multicultural society the US is poised to be innovative in this new world, and this time perhaps all out of proportion to our size. I love all social networks and in particular Twitter because of its power to spread ideas faster than the speed of light. Just think of it. One thought can reach a thousand people much faster than a single beam of light could physically touch those same individuals. I found myself a few weeks ago teaching a group of 20-somethings my Twitter secrets. This is nuts, I thought, but what a blast.

So there you have it. My last lesson: All organizations, no matter how reactionary or conservative, always have people in them thinking how we can be better.  All organizations need to find better ways to tap into what these individuals have to offer, because they often have an orientation to the outside environment that you may be lacking.

And for you frustrated innovators out there, form a Rebel Alliance. But remember, that optimism is the greatest act of rebellion.

Thank you.

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Posted in Change, Collaboration, Innovation, Intelligence, Internet, Knowledge Work, linkedin, Organizational Dynamics, Social Networks

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On Work, Consumption, Economy and the Whole

Posted on September 6, 2010 | 9 comments

Saul Kaplan, the founder of the Business Innovation Factory–where incidentally I will be a storyteller on 16 September–writes a Labor Day post on his blog listing what he calls 20 random thoughts on the Future of Work. (They’re not so random, really, but it’s a really good list.) Naturally agreeing with points such as

Projects are more important than jobs; and

Free agent nation becomes a reality,

I got to thinking that change of this scale will have GINORMOUS downstream effects (I’ve been told by some very reliable sources that ginormous is now officially a word!). Because if we change how we work, don’t we in fact CHANGE EVERYTHING? Saul touches on some of these broader implications when he notes that

Workforce and economic development are transformed and become indistinguishable; and

Work and social become indistinguishable

but what I’d like to do in my Labor Day post is draw these points out even more.

We cannot underestimate how important steady 9 to 5 work is to the American economy; it is that steady, predictable income that has allowed US consumers to become the BEASTS that we are. (It was part of Henry Ford’s genius to realize the connection between his profits and the wages he paid.) The US consumer has been the engine behind world economic growth since WWII. I wasn’t able to easily find a statistic on what percentage of the world economy is ingested by the US consumer–the closest I could get is the oft-cited data point on how we account for about a quarter of world energy consumption despite being in low single digits in percentage of world population. But you get some indication of the importance of US consumption to the world economy from the website of the Worldwatch Institute, which in its press release for its 2004 monograph on world consumption noted that “the 12 percent of the world’s population that lives in North America and Western Europe accounts for 60 percent of private consumption spending, while the one-third living in South Asia and sub-Saharan Africa accounts for only 3.2 percent.” It’s safe to assume the US consumer accounted for more than half of that 60 percent.

So let’s get in that trusty Time Travel Apparatus and fast forward let’s say 50 years. If the predictions about how work will change are true, then one of the implications–unless we come up with interesting new methods of compensation, question mark?–is that the steady income that drives American consumer consumption will dissipate, to be replaced with more aperiodic payouts. Presumably these payouts will average out to meet our needs and sustain roughly approximate standards of living, but not without some important adjustments. I would imagine, for example, that the average individual’s willingness to accept large revolving debt balances will weaken once she cannot rely on a regular, stable income. Similarly, companies and business models that are based on consumers handing over huge amounts of money on a regular basis, like the cable companies, may have to retool.

Many industries in fact will have to rethink. Agreeing to five years of car payments? I don’t think so!! The 30-year mortgage? Perhaps not!! It’s interesting that already in the car industry companies such as Zip Cars are introducing new ways to acquire the services of a car on a pay-as-you-go basis. And the shambles in the mortgage industry have led people to question the inviolability of the American dream of home ownership. Finally, the emergence of Cloud Everything probably will allow consumers to dispense with the need to own important consumer goods such as music, videos, books, etc.

So my hunch–a sophisticated analytical term–is that a redefinition of work will be the prelude to a redefinition of economic prosperity. Prosperity and economic growth would no longer be synonymous. I don’t know yet whether this will be a net plus or minus, although the optimist in me believes of course it will be a net plus. Certainly the world’s ecology could tolerate a break from constant growth, particularly growth dependent on mass utilization of finite resources. Again from the Worldwatch Institute, “WWF’s Living Planet Index, which measures the health of forests, oceans, freshwater, and other natural systems, shows a 35 percent decline in Earth’s ecological health since 1970.”

Nevertheless, there’s also a part of me that senses the wisdom of the view that the opposite of growth is death. Without economic growth, can we advance as a species and improve the lot of those who live and die without ever getting a chance to explore their human potential? I know many have conceptualized what they argue are more equitable economic models, but these always seem to ignore the demonstrable quirks of human nature.

Clearly, there’s still a lot of work to be done.

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Posted in Change, Future Thinking, linkedin, Work Design

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The Importance of Innovation to the US Economy

Posted on August 30, 2010 | 3 comments

I know I still owe pictures on my African trip, but first I’m going to insert below what I have been working on most recently, which is a short talk on the importance of innovation to the US economy. I welcome comments and brickbats.

In the new National Security Strategy articulated this year by the Obama administration, prosperity is identified as the second of four US national interests.  Specifically, the US seeks a strong, innovative, and growing US economy. In my comments today, I want to focus on that second adjective—innovative. I want to discuss the issue of innovation as it relates to economic security, although I guess I would rather use the term economic prosperity. I chose the topic of Innovation because it’s a “thing”, a dynamic, that really appeals to me intellectually and psychically. Despite 32 years in the Intelligence Community, I’ve come to realize that my cognitive orientation is essentially a progressive one. I am much more interested in what can be than in what is.

I’m sure that many of you share my sense that we’re living in one of those periodic spurts of progress and innovation that punctuate human history on a fairly regular basis. I’m not prepared to argue that this spurt is unprecedented, although personally I’m inclined to believe the impact of the changes we’re seeing now will have particularly profound—dare I say it—unprecedented consequences. For my purposes, it is enough that technological and process-based changes and improvements are bunching up right now in volume  and chunkiness rivaling beach traffic approaching the eastbound Bay Bridge on a Friday afternoon.

So how important is it—to our economic-slash-national security for the US to be an important driver of this Innovation Caravan? To answer that question adequately, I indented four additional questions.

  1. How important is Innovation to the overall economic health of the US?
  2. Where does the US currently stand in the world’s innovation index and how are we vectoring?
  3. How do our likely peer competitors compare to the US in their innovation potential?
  4. What is contributing to the conditions described in the answers to Questions 2 and 3? What are the causes and correlates?

I’ve tried to take the approach of the so-called objective intelligence analyst in answering these questions. So I’m not going to try to persuade you of my beliefs necessarily, but rather just lay out what I think is known and not known about this topic. When I do have a personal view I will label it clearly as such. I don’t expect you all to agree with me, I don’t want you to agree with me, although I hope you will find my approach and conclusions credible.

Before proceeding to answer the questions, let me spend a little time providing you with some definitions of Innovation. The World Bank, in a recent report on agricultural innovation, had a definition I liked, which I’ve paraphrased slightly for efficiency.

Innovation is neither science nor technology but the application of knowledge of all types to achieve desired social and economic outcomes. Specifically, innovators master and implement the design and production of goods and services that are new to them and/or their societies.

People speak of many different types of Innovation. The taxonomy of Innovation is usually presented in the form of paired concepts that are in opposition to each other. So, for example, people speak of fundamental innovation, which is often technology-based and leads to new industries, as opposed to social innovation, which refers to changes in the way people behave. These changes in societal behavior, for example most people adapting to cell phones or GPS systems, are often essential to harvesting the advantages of fundamental innovations.

Process vs. Product Innovation: The experts generally agree that product innovation often creates jobs; although my question would be does it lead to a net increase in jobs? After all, new products usually displace the individuals working on the old products. Process innovation, however, usually eliminates jobs as few innovators seek to increase labor costs through process improvement.

Then there are several twin-headed taxonomies that strike me as generally describing similar qualities—the extent of change.

Is the Innovation Revolutionary or Evolutionary? This usually is assessed in terms of outcome.

Radical vs. Incremental Innovation. This usually distinguishes ease of adaptation.

Continuous vs. Discontinuous. This distinguishes those innovations that trigger mass extinctions from those that don’t.

A final taxonomy pair distinguishes fundamental innovation, this time from applied innovation. In this case fundamental innovation involves science and engineering leading to a new “AHA” moment. Whereas applied innovations take these “AHA” moments and turn them into something utilitarian and in some respects pedestrian.

So with that out of the way, let’s return to the four questions I set out to answer.

  1. How important is innovation to the overall health of the US economy?

Although some of the subsequent questions have less clear or authoritative answers, here the facts appear to be without controversy. Everyone agrees that innovation has accounted for most US economic prosperity in the post WWII period. The Department of Commerce notes for example that technology innovation is linked to 75% of US economic growth since WWII.

Perhaps less appreciated—or less appreciated in any case by me until I started to do the research for this talk—is the unique role that venture capital and the modern private equity firm had in fueling post WWII US economic growth. It is generally agreed that the venture capital industry really began in the US in 1946. You had private investment before then—the Transcontinental Railroad was a startup—but the investors were rich individuals acting on their own. (A trend by the way that we appear to be returning to as the amounts required by startups decline precipitously as a result of web services and cloud computing, but that’s another talk.) Venture capital firms in the post WWII environment began by investing in the new businesses started by returning veterans. This was a uniquely American concept at the onset, but Europe caught up by the 1990s.

Venture capital reached its highest percentage of GDP in the mid-1990s at just about 1%, but the cascading effects of venture capital are more significant. The National Venture Capital Association estimated in 2003 that ventured-backed companies were then providing more than 9% of all US employment.

But we don’t have to take the lobbying group’s word for it. The OECD estimates that in the US firms less than 5 years old have accounted for almost all of the new jobs created in the US economy in the last 25 years. Put another way, established companies have essentially created no net new jobs during that same period. The Kaufman Foundation in a very recent study based on a new set of data from the government called Business Dynamic Statistics analyzes that firms more than a year old actually have destroyed net more than a million jobs since 1977.

Although I couldn’t locate a breakdown of exactly how these new jobs link to innovation, I think it is safe to assume that the many of the new firms every year are based on some type of innovation, whether it is fundamental, applied, or social.

So there’s no arguing, I think, that the capacity for innovation has been the primary catalyst of US economic growth. (And indeed capitalism essentially is built on innovation and the concept of creative destruction.) But my research suggests to me that, going forward, innovation will be even more critical to US economic prosperity. And that’s because our particular economic circumstances today imply that innovation not only will need to contribute all US economic growth but will have the additional burden of compensating for anti-growth dynamics currently infecting the US economy.

Specifically:

  1. The financial crisis and the necessary deleveraging occurring in the US economy. Economists agree that the hangover from a debt crisis is the worst kind and lasts the longest. I also have the hunch—very technical analytic term—that this economic downturn is made worse by a simultaneous disruptive secular shift in the economy—from analog to digital. Employment will stay stubbornly high because companies, I believe, are using this downturn to divest themselves of employees and occupations they no longer need in a digital and knowledge economy. (There are some economists who have argued a similar dynamic deepened the Great Depression, which was the occasion that finally allowed—so the argument goes—for the complete unwinding of the agrarian/horse economy that had dominated the US during the 19th century.) The only elegant way for the US to resolve its deficit issues is to grow ourselves out of them. A nice average 5% per annum growth rate for the next ten years might be a good place to start. Unachievable without the frisson of significant innovation.  (And I suspect unachievable, period.)
  2. The mature nature of the US population. Although there is considerable difference of opinion among academics as to how population growth affects economic growth, particularly for underdeveloped and developing economies, most agree that the declining and aging populations of Western Europe and Japan necessarily cut into economic demand. The US economy is not there, largely because of the positive impact of immigration, but we’re also no longer going to benefit from the economic boost that was provided by the consumption patterns of the baby boomer generation.

So having established that innovation is critical to the future of the US economy, let’s turn to Question #2.

2. How are we doing in terms of innovation—specifically, given the focus on national security, relative to other countries?

My exploration of this topic did not reveal as much clarity as on the first question. Measuring where countries stack up on the Innovation Table appears to have become a cottage industry in the last ten years. Let me cite the two most recent and most credible:

A report compiled by the Boston Consulting Group and the National Association of Manufacturers. Like most of these studies it measures innovation inputs and outputs and has the US ranked 8th in the world.

A second report by the Economist Intelligence Unit, sponsored by Cisco, has the US as 4th.

A third report by Insead, the Paris-based economic school, still ranks the US as first in the world in innovation, God bless them.  But I did not use it because I wasn’t able to readily locate the details on the internet. Both of the reports cited below were published in the last couple of years.

Boston Consulting Group                                     Economist Intelligence Unit
National Association of Manufacturers                 Cisco Systems

1.  Singapore                                                            1.  Japan
2.  South Korea                                                         2.  Switzerland
3. Switzerland                                                           3.  Finland
4.  Iceland                                                                4.  USA
5.  Ireland                                                                5.  Sweden
6.  Hong Kong                                                           6.  Germany
7.  Finland                                                                7.  Taiwan
8.  USA                                                                     8.  Netherlands
9.  Japan                                                                   9.  Israel
10. Sweden                                                               10. Denmark
China 27th                                                                China 54th

Projected Rankings in 2013 (Economist Intelligence Unit)

Russia 32
Brazil 45
China 50
India 52

What these tables tell me is that the methodology for these studies isn’t very exact or agreed upon. Although most people agree on what are innovation inputs (skilled work force, education, R&D expenditures, etc.) innovation outputs are another matter. For example, the number of patents, a popular metric, is criticized by others who argue patents only indicate inventions and societal concepts of intellectual property, not innovation.

I don’t know about you, but I can’t quite work up a lather of concern because Iceland or Switzerland is considered more innovative than the US. I can say without doubt or equivocation that neither country will become threats to US national security. On the other hand, I believe these studies underestimate where China is—the Status Quo always underestimates the new kid on the block because the Status Quo owns the yardsticks. That said, however, I share the view of many commentators who think China’s status as a holder of US debt will be a strategic problem for the US long before China’s innovation capacity. It should matter in the long term, of course, but by then China will be dealing with its own structural problems, such as the graying of their labor force.

There is, however, no doubt that the US capacity for innovation has declined in relative and absolute terms over let’s say the last 20 years or so. Our standing on these inexact charts has consistently declined. Other evidence points to a less vibrant American economy. For example, according to Deloitte’s Center for the Edge, the rate of return of US assets has declined by 75% since 1965.

We’ve already begun to touch upon the Third Question.

  1. How do our likely peer competitors compare to the US in terms of their Innovation potential?

We’ve already discussed China’s innovation performance and my instinct that the methods of measurement discount China’s progress. Other potential national security concerns for the US, such as Russia, are essentially non issues, according to these studies, when it comes to economic innovation. Obviously Russia, given its strong performance on pure scientific research, retains the potential for military innovations but its economy, which is dwarfed by China’s in any case, is increasingly based on exploitation of natural resources and is not poised for strong growth or innovation.

At first blush then, the European Union and China then are the two coherent economic powers that could deny the US leadership of—or a significant share of the economic innovations that will shape the 21st century.  But a broader trend, the emergence of the BRIC economies—Brazil, Russia, India, and China—will, if Goldman Sachs is right in its projections earlier this year—fundamentally alter the world economic map by 2020. (By the way, I bet Goldman Sachs regrets its inclusion of Russia in this list given the developments of the last decade. The Economist Intelligence Unit indeed only speaks of the BIC.)

Let me quote directly from the Goldman Sachs report, which can be found on their website.

Our baseline projections, underpinned by demographics, a process of capital accumulation and a process of productivity catchup, envisage that the BRICs, as an aggregate, will overtake the US by 2018. In terms of the size of the economy, by 2020 Brazil will be larger than Italy. India and Russia will be individually larger than Spain, Canada, or Italy. By 2020 we expect the BRICs to account for a third of the global economy and contribute about 49% of global GDP growth.

One of my favorite analytic sayings/precepts is that quantity has a quality all its own. (Josef Stalin) This kind of change in the global economy will have profound effects on the world which we in the West, in my view, are inclined to not even want to think about.  And it only serves to underscore the argument that US economic prosperity depends upon our capacity for innovation, by which I mean that only innovation will allow us to fight about our weight class (i.e. absolute size of our economy—largely a function of demographics and maturity.)

So back to China and the EU. While many of the most innovative countries are in the EU, it is still hard to imagine the circumstances by which the EU becomes a peer competitor for the US, which returns us to China. Although China, in the EIU survey, is projected to rise to 50th in the Innovation Index by 2013, its low ranking is deceptive. China has risen 9 places in just 5 years, a rate faster than the EIU anticipated. In a separate study of Innovation in BRIC economies published last year in the journal Research Technology Management, it was noted that in 1995 the patent count, duly caveated by my earlier discussion, of China was the same as Brazil’s. Now it is 7 times that of Brazil.

John Seely Brown and John Hagel, at the 2006 Davos conference, asserted that China is now the world leader in management innovation. I’m not clear as to the basis for their claim, but I do believe, as I’ve mentioned before, that the methodologies used to rate innovation by country are based, unavoidably, on how the West has done it and thus have a tendency not to appreciate how countries such as China, Brazil, and India might be doing things differently.

In theory, China’s success (or any other country’s) at innovation need not pose a problem for the US. But it can affect US economic capacity if US-based multinationals choose to divert more of their R&D efforts to China, which is graduating scientists and engineers at an incredible rate. The US, as we have discussed, is lagging badly on STEM education. If Chinese and Indian graduates stop wanting to work and live in the US, our innovation potential suffers. (By some estimates, Indian immigrants lead up to a third of the startups in Silicon Valley.) Finally, the economic advantage of innovation, that surplus income, goes to those who do it first and well.  The more countries that have the skilled workforce and modern economic base for innovation, the harder it will be for the US to be first to the pole.

Let me be clear here. I’m not suggesting any malice or nefarious intent on the part of any other nation. These trends have impact regardless of the policies of specific governments. It’s really just a matter of physics and arithmetic.

The Fourth Question

  1. Why is the US losing momentum in economic innovation? The literature presented several compelling reasons. We’ve already discussed one, the US is falling behind in STEM education. Given the size of China and India’s population, we will never be able to match them numerically, but at the rate we’re going, the US will simply be overwhelmed.

A second related issue is a current workforce that needs new training and skills.

A third reason is the inadequate US federal and state government support for an innovation-friendly environment. We lag many other parts of the world. I’m not necessarily advocating increased federal R&D spending, which I suspect is not the answer. But today the US, for example, ranks 17th among OECD countries in the generosity of its tax credits for R&D. France is four times more generous than the US, according to the Information Technology and Innovation Foundation. This is not good.

A fourth factor points to the short term perspective of too many US companies and their outdated-slash-myopic management/leadership concepts. Steve Denning, a leadership consultant, notes that the management principles of most US companies are scalable bureaucracy. Bureaucracy is of course the natural predator of innovation. As a personal observation too many US companies seem to have become quite innovative in inventing ways to use fees to bolster their bottom lines rather than seeking to innovate a new product or process.

Finally, I also believe but have no sources or citations for support that the US, as a society and culture and economy, suffers from having transitioned into a Status Quo mentality. When I listen to the public debate, which I try to avoid, I hear altogether too much about preserving what we have or returning to core values. Having been a student of dozens of countries over the last 30 years, I believe I can detect the difference in the vocabulary and body language of a nation looking forward versus that of a nation looking to preserve what it has.

So let me share some concluding personal opinions that I think you may find negative or positive, depending upon your perspective.

  1. Innovation is our economic strong suit but it will not solve all of the US economic problems. It can create many jobs, but my hunch is we are undergoing a significant transition in labor markets and the nature of jobs. It will not cure our debt problem.
  2. As we transition from the knowledge economy, already OLD HAT, to the Creative economy, we are shifting away from economic concepts that can be captured in nationalistic or mercantilistic terms. (The Chinese, by the way, issue statements and doctrine that suggests they don’t quite believe this.) National boundaries are not only irrelevant to knowledge and creativity, they are actually counterproductive. Innovation is becoming more collaborative. So what do the terms economic and national security mean then?
  3. In my opinion, we are focusing on security and spending on military matters out of proportion to our economic capability and economic potential. (By the way the experts tell us that our spending on health is similarly out of whack.) Paul Kennedy in his seminal book the Rise and Fall of the Great Powers, written during the 80s I believe, argued that such disproportionate spending is an indicator of a declining great power. There is presumably an optimum balance between wealth creation and military strength. Are we there yet?
  4. The conditions I’ve described are not a platform for continued US “dominance” of the world. We don’t want to talk about it, but the US economy will not support single, great power dominance once our economy represents only about 10% of the world economy, vice the 50% it represented after WWII.

I always want to tell young people just starting their careers that their greatest challenge will be to help the US make the adjustment from great power status to a more complex but I believe still quite comfortable relationship with many peers. Our choice is clear: we can either not talk about reality and continue patterns of deficit spending that will only hasten a messy denouement or we can begin to make the intelligent choices today that will ensure we remain the most influential society in the world even as we relinquish the only superpower status.

Thanks.

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Has Twitter Eaten My Brain? (Lesson 22)

Posted on August 2, 2010 | 1 comment

It’s been more than a month since I wrote a blog post. Reasons:

1. I’ve started doing some hours as a consultant, so most of my pleasant “thinking and writing mornings” have disappeared. I need to develop a new routine.

2. I’m getting ready for a vacation to southern Africa. I have two more nights of good sleep left before it’s wheels up, and stay tuned to this space for pictures and reports of what we hope will be excellent adventures. My interest in the world has many antecedents, but one in particular was the show Discovery that ABC aired in the 60s and 70s as part of its weekend children’s programming. Perhaps some of you remember it as well? Hearing the jazzy score after four decades is Proustian in its effect.

3. I haven’t had anything to say that I couldn’t say in 140 characters or less. Is this scary? I can’t quite decide myself, but generally I quite like the discipline of having to convey ideas in short, digestible snippets, although admittedly the “telegraph” language and spelling used in twitter just seems to confuse/annoy some people.

I keep a list of topics, ideas I might want to blog about, but none of them seemed worthy of an entire posting.

  • On Diversity. One of the ways I can tell that Latinos haven’t really made it into corporate America yet is how easy it is to use my surname, straight and unadulterated, as a userid on business-oriented websites. On the Harvard Business Review website, I was able to walk right in as “camedina”. At the CIA I was just plain “medina”. No medina25, no convoluted acronyms. Medina is a pretty common Spanish surname; according to About.com it ranks 30th in frequency of use in Spanish-speaking countries. (In the US the 30th most common surname is King.)  The About.com list of 100 most common US surnames makes for good perusing. The two most common Spanish surnames in the US are Garcia and Martinez, which come in at 18 and 19, with Rodriguez just outside of the top 20.
  • More on Diversity. There have been some comments on my post from a few weeks ago on the essential Latino heritage of the US. I’ve really no interest in argument, because I’ve learned over the years that debate never really seems to change most people’s views. I’ve been struck recently, however, by the dynamic impact that new waves of immigrants are having on US society.  For example, the south Asian, specifically Indian, contribution to the US economy cannot be overestimated. I’ve read estimates that upwards of 25% of Silicon Valley startups are Indian-run firms. Personally, I think the most prosperous future economic scenario for the US is decidedly multicultural.
  • On the Difference between Government and Private Industry. As I dip a toe or two into work outside of government, my first impression is that the two are more similar than not. Both probably have about the same proportion of good/dumb ideas and competent/incompetent staff. The key advantage for private industry, however, appears to be that it can kill bad ideas/projects a lot more easily than the federal government seems to be able to.
  • Lesson 22 from a CIA manager: Be clear about what kind of management problem you’re facing. Sure, there are many sticky situations the artful manager can unstick, but be careful to diagnose problems correctly. There is a whole set of problems that managers can never solve. They can only be solved by the passage of time (and generations). Many of these can only be managed like some kind of chronic illness. The Arab-Israeli dispute comes to mind, for example. Really difficult people are also likely to “outclass” you. Remember, you will only spend at best a few years with this individual who suffers from really difficult emotional issues or pathologies. My motto was: If your parents weren’t able to correct your behavior, there’s very little chance I ever will.

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It’s the Pace, Stupid!

Posted on June 16, 2010 | 3 comments

Digitial Capital Week (#dcweek) is well underway in Washington and yesterday I attended a half day of sessions on the new media. During the morning panel on social networks and the new media with representatives of National Geographic, USATODAY, NPR, and Aviation Week (just too cool that Orville Wright was an original subscriber to the magazine),  the NPR rep noted how difficult it was for NPR’s small operation to keep up with the speed of change in technology. He cited specifically mobile apps and how NPR has chosen to support a limited range of apps because it simply doesn’t have the resources to keep up with all the technologies, particularly if they’re going to have to be updated several times a year.

OK, I thought, NPR seems to be assuming there is a certain pace to human events that is natural and well-ordered. Well who made NPR or any other company for that matter the judge of the best pace for human society, I snorted? (Politely, to myself.) No one of course; NPR was simply hoping for the continuation of a pace convenient to its structure. At that moment it became clear to me at least that the pace of normal human life, with digital and internet innovation as its new metronome, now overwhelms the structure of the great majority of organizations.

(I know I have a few readers outside the US, so I guess I should note that NPR stands for National Public Radio, although the NPR official at the panel said they now refer to themselves just as NPR to reflect the growing range of their activities, such as on the internet.  After listening to their news broadcasts and shows, I’m persuaded the acronym actually stands for National Pessimists Radio, but I digress…)

It’s commonplace to speak of the rate of change as being too fast for organizations but the phenomenon attains a different quality when we realize that it is the pace of normal life that now exceeds organizational capacity. Mobile apps are a great example of this. Many of these apps are being tweaked by gifted amateurs. (At the panel, NPR noted its first iPhone app was created by one of its avid listeners.) These individuals don’t think of these adjustments as change initiatives, the way industry or government would. Adjusting a feature often is not that much more significant for them than deciding to have lunch at 130 pm vice noon. WordPress, which hosts my blog–thank you, announces changes to its platform so frequently I hardly notice.

Legacy, 20th century organizations are designed for quite a different rhythm of life.  Any change in software code must be tested against the entire cascade of code lest some catastrophic consequences ensue. (For the person living to digital rhythm, you simply tackle these anomalies as they present themselves.) The assumption that implementation must wait until the system is completely tested dictates an operational rhythm with many, looong pauses. And of course, hierarchical and/or authoritative management philosophies always assume the process can be safely stopped for the management intervention that theoretically improves quality. For legacy organizations, pace and quality are to a certain degree in opposition to each other. In digital life, pace and quality are paired; quality occurs as a result of keeping up the pace.

I often saw this dynamic in my government career. Every change effort was attacked by the “first tell me how will the whole new system work” question.  And when we finally set off on a new change effort (Cue Angels and Trumpets), it took so long that by the implementation date we were already behind at least three technology cycles, even if we had been cutting edge at the decision point ten years earlier. The structure of government is particularly ill-suited to keeping up the pace. Just think of lengthy Congressional hearings and the marathon journey of legislation.

Organizations did not always lag the pace of normal human life. During the Industrial Revolution, factories powered by the new machines so accelerated the pace of life that many feared the human physiology would collapse under the pressure. As the British history section on the BBC website notes:

The Victorians had become addicted to speed and, like all speed crazy kids, they wanted to go ever faster. Time was money and efficiency became increasingly important…With greater speed came a greater need for industries and businesses to make more and make it quicker. Steam made this possible and changed working life forever. Gone were the days when work was dictated by natural forces: steam engines were servant to neither season nor sunshine.

An example of this I bet we’re all familiar with is this great scene from I Love Lucy, which is by the way the first I Love Lucy clip that pops up on YouTube. (For years I had a tshirt that read “Forget Lucy, I love Ethel” I loved that shirt so much I wore it to death, but I digress…)

But now the dynamic is completely reversed. Organizations hold the keys to very old machines and processes. But for most individuals under the age of 40, the digital pace is the natural pace. (Seems to me that the internet makes us dumb arguments of Nicholas Carr also have at their heart this unease with the new pace. Before I can take any of these arguments seriously, someone has to prove to me that there is some inherently desirable pace for human activity. Until then, I accept what is.)

This issue of pace also has implications for the John Hagel/John Seely Brown insight concerning how individuals and organizations today must learn to interact with knowledge flows rather than managing knowledge stocks. I believe organizations, just like Lucy and Ethel in the video, underestimate the pace at which the flow of knowledge will come at them. For sure they overestimate the ability of their existing structures to keep pace with that flow. And unlike Lucy and Ethel, it does you no good to eat the knowledge. I believe many of them will learn over time that the only way to keep pace will be to break down their organization walls and rely instead on their community of supporters. The NPR representative chuckled at the idea of someone outside the organization creating their first iPhone app but I think NPR would be able to support many more mobile apps if it embraced and developed this phenomenon into a new business model. Successful organizations of the future will share leadership responsibilities with their community of trusted supporters.)

(One last aside. While researching some references to the Industrial Revolution I ran across this very lovely piece about the pace of life in industrial countries on the BNET website. (It appears to have originally been published in the journal American Demographics.) The research looks to be about 15 years old but the piece has some great data and is also great fun to read. I think it would be a useful research project to update this work in light of the new digital culture.)


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There is Nothing So Weak as an Idea whose Time Has Not Yet Come

Posted on May 18, 2010 | 2 comments

Readers of this blog (there are some out there, right?) have probably figured out by now that I am a sucker for pithy sayings. Yes, I am shallow enough to find meaning in short statements that appear to capture something truthful–others might say short statements that capture something obvious. I’ve organized many of them in my Lessons from a CIA Manager page. But yesterday, while talking to someone preparing material for the Business Innovation Factory, where I am scheduled to tell my story at their Collaboration Innovation Summit in September, I was led to recall one of the most meaningful guiding principles/obvious statements I’ve encountered: There is nothing so weak as an idea whose time has not yet come. This guidance has such wide applicability that it can’t be restricted to the management lessons category.

Now when I decided to write on this topic I googled the phrase to see if I could track down its origins. The phrase “an idea whose time has come” is of course everywhere and appears to have been popularized by the French novelist Victor Hugo, who is credited variously for having written:

All the forces in the world are not so powerful as an idea whose time has come.
An invasion of armies can be resisted, but not an idea whose time has come.
Greater than the tread of mighty armies is an idea whose time has come.
Nothing else in the world… not all the armies… is so powerful as an idea whose time has come.
One can resist the invasion of an army but one cannot resist the invasion of ideas.
There is one thing stronger than all the armies in the world, and that is an idea whose time as come

Martin Luther King, Jr. quoted Victor Hugo on this point when he accepted the Nobel Peace Prize. The phrase ‘an idea whose time has passed or gone’ is also popular. But I did not find, at least not on the first few pages of the Google search results, any reference to the inherent weakness of an idea whose time has not yet come. My memory, which is I fear becoming increasingly unreliable, tells me I first heard the phrase 20 years ago while listening to a show on the BBC’s Radio 4. (I lived in England in the early 90s and was quite devoted to all the talk shows and introspection celebrations that aired on Radio 4.) The phrase was used by the narrator in a show discussing the experience of British colonial administrators in Africa. As soon as he said it, my brain BOINGed, and I’ve been devoted to the principle ever since. (The entire show was fascinating for the light it shone on the British colonial experience in Africa and its implications. I remember particularly one fellow who as a sergeant (as I remember) ruled a large swath of Ghana during the 1950s. I tried to understand the impact such an experience must have had on the British psyche: to be British meant that you had some right, perhaps even obligation, to guide the rest of the world, and really you needed no other qualification then to be British. The experience of the United Kingdom during the last century does show that a great power can make the transition, more or less elegantly, from superpower to member in good standing of the neighborhood watch, which should give some hope to Americans who are beginning to grapple with this possible future for the US in this century. But I digress….)

There is nothing so weak as an idea whose time has not yet come. If you have the good or bad fortune (you decide) of  being able to see, to imagine how things can be different, to make out the fuzzy outline of the new amidst the noise of the current state, then you have  experienced the frustration of  trying to popularize a concept for which no one else is ready. The interviewer from the Business Innovation Factory reminded me of this when she quoted from a rebuttal that a colleague made almost ten years ago to a piece I had written on the need for intelligence reform in the journal Studies in Intelligence. Let me quote a paragraph that makes his point and illustrates the weakness of premature innovation (the acronym DI refers to the analytic directorate of the CIA):

Claims of dramatic shifts in large systems, whether the environment, a national economy, or a US government agency, always need to be viewed with some skepticism. Systems do not change overnight, especially those affected by some of the more immutable traits of human nature. Medina’s claims about a new environment of information abundance radically altering policymaker needs are overstated. They echo much of the “new economy” thinking that, as good as it sounds, is increasingly unconvincing as it has been put into practice. Not too long ago, The Washington Post ran a series of articles on “The Rise and Fall of Michael Saylor,” the Microstrategy chief who became a multi-billionaire, then watched his wealth and his company collapse after bad accounting practices took the luster off his vision of how to handle the new environment of information abundance.4 The series reminds us that untested theories, especially when presented in glowing terms to excite the imagination of investors and managers, often promise more than can be delivered and more than, in practice, anyone wants.5 The DI, like many corporations, already has a good and useful product. When consultants and others come to us saying that everything has changed and so must we, the proper response before investing significant resources ought to be “prove it.”

Well I can’t really disagree with anything the author wrote many years ago. Yet I know in my heart (and my brain) that if organizations wait for the need for change to be obvious, it becomes White Rabbit time–too late.  It is a fact that many ideas for how to do the new are wrong. But it is also a fact that ALL existing ideas for how to do things, whatever the field, however small or complex, are eventually replaced by a better way of doing things. So I guess it all comes down to timing.

This then is one of the many dilemmas of innovators. Innovators have to balance the “earliness” of their ideas against their “effectiveness”.  Too early and you might as well be speaking to yourself. Too late and you have sacrificed your effectiveness and failed your group, organization, mission. Decisionmakers in organizations must have a process to harvest ideas so that they can incubate, be protected from the perils of premature delivery, and thus eventually reach their maturity–their time of acceptance. Innovators, who too often are blinded tactically by falling in love with their ideas, need to have a long-term approach to the marketing of their concepts. It is just immature to expect widespread acceptance of your new ideas or to give up at the first opposition.

So let me turn again to Victor Hugo for an appropriate last word: “Each man should frame life so that at some future hour fact and his dreaming meet.”

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Leadership and Disappointment

Posted on May 12, 2010 | Leave a comment

I noticed this morning that someone reached my blog by searching on the terms “leadership and disappointment.” No doubt they found my page on Lessons from a CIA Manager, where Lesson 12 quotes Ron Heifetz on his insight that leadership is disappointing your followers at a rate they can tolerate. But I think there is much more to say on the subject. (When I searched on leadership and disappointment, I ran across this blog by a pastor who is also writing about the Heifetz leadership principles.)

Heifetz of course is talking primarily about the disappointment caused when leaders take their followers in a direction they may never have thought of going and, even harder, to a place they do not want to be. But being a leader is also about constantly and personally dealing with the emotion of disappointment. Being a leader–and I’m talking specifically here about the role of the leader as the agent of change–means living through long periods of disappointment which, if you’re lucky, are punctuated by occasional moments of giddy success.

What are the different types of disappointment a leader is likely to experience?

The Kneejerk Negative: I know you’ve lived this innumerable times. You start explaining an idea you have about how to see a situation from a different perspective or change a process and several people in the audience immediately start shaking their heads and tell you that’s not right and you’re wrong. Now you know, given the time you’ve devoted to this idea, thinking about it, considering the pros and cons, that it’s almost certainly impossible the nay-sayers are basing their comments on anything but immediate and visceral reactions. Once those reactions occur, however, good luck in trying to return the discussion to a more measured approach.

The God, You’re Brilliant: The opposite of the Kneejerk Negative but really just as bad. Again you’re recommending a change or improvement agenda, and the sycophants immediately accept it just because of your authority position. Those you can handle, but the more problematic group are the naive enthusiasts who underestimate the implementation and acceptance hurdles, disrespect the thoughtful concerns of others–“I don’t understand how they can be so stupid,”  and turn off fence-sitters with their excessive euphoria.

The I Was a Coward in that Meeting: Unless you bull rush your way through organizations, which is, I would contend, just about impossible given the physics of change, you will, as a leader interested in facilitating change, always be carefully trading off when to be aggressive against when to be conciliatory and/or indirect. You will mess up that calculation on a regular basis and walk away from many a meeting knowing you could have done more to advance your argument if you had been aggressive with your convictions.

The I Blew It: The existential disappointment: when you realize you’ve been wrong. You will be wrong; change is a risky endeavor. Even if your ideas are structurally correct–and they won’t always be, just the challenge of implementation will inject messiness and error. This is why the Kneejerk Negative reaction of so many of your colleagues is so damaging to the health of your group and its mission. A considered conversation on what to do next always gives you the best odds for improvement.

The I Never Thought You’d Disappoint Me: I had a colleague, technically someone who worked for me, say that to me once. Although disappointing your followers is tough, disappointing the individuals in your organization who are actually your allies, now that hurts. And it’s guaranteed that you will come to that point, particularly if you’re nailing down the last couple of compromises with the skeptics that will allow the change effort to go forward. The successful leader of change in an organization will never be radical enough in her implementation to satisfy the true believers.

The Someone Else Takes the Credit: This requires no additional explanation and is the cousin of…

The This Certainly Didn’t Help my Career: I hosted an intern at work one summer, a very intelligent fellow, who asked me why I was always suggesting ways of improving the work of the CIA, or at least things I thought would help. “Does it benefit your career?” he asked. Cue Hollow Laughter. This disappointment has the potential to turn into bitterness and cynicism. You must fight this tendency with all your mojo, because it will in fact kill your motivation and sour your intentions.

So what’s a change agent to do? I once got a piece a advice from someone I consider a guardian angel of sorts, a total stranger, who told me at a function that, as a reformer, I needed to understand I was always going to feel uncomfortable in an organization. For my own health and sanity, I needed to accept that feeling of discomfort. And in fact, the best scenario would be to come to actually like feeling uncomfortable, because that feeling indicated fidelity to your convictions.

The guardian angel was correct. There is no other way to survive.

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Posted in Change, Leadership, linkedin

What is your Twitter Diversity Score?

Posted on May 10, 2010 | 1 comment

How do we,  particularly us knowledge workers, expose ourselves to different views and perspectives? I’m asking this as a very practical question. I’m currently reading Amartya Sen’s The Idea of Justice and one of the most important concepts concerning justice is that it should represent fairness, and that in fact justice and fairness are separate concepts. (Except that many languages, including French, do not have separate words for justice and fairness.) But it occurred to me as I was reading that it is impossible to be fair if you are not aware of all possible views on a subject. (Now, of course, knowing all views probably is itself impossible for most complicated subjects…there would be a long tail of views that defied comprehension, so then you immediately get involved in deciding which views are relevant, etc., which puts you in another miasma of subjectivity. And this is one of the main reasons why I’ve always been rather dubious about the wisdom of authority and institutions, but I digress…)

To return to the main topic, diversity of thought is key to attaining justice and fairness in societies. And how can we hope to achieve such diversity of thought? Well, of course, one way is through the use of TWITTER. Roger Schank, a leading thinker in education and artificial intelligence, just wrote a piece in eLearn magazine on how Twitter  is capable of changing the very nature of what it means to learn from your peers.  Absolutely! The magic of Twitter is in how it has become a perpetual learning machine. But the question remains, is my Twitter stream diverse?

So I decided to do a manual check this morning of the people I follow. I only follow about 200 people so it wasn’t too hard to do it by hand, although admittedly my analysis is extremely primitive. (Is there a program that lets you analyze the diversity of your network? I just tried Google’s FollowFinder, which helps me find more people who are like the ones I already follow. I want the opposite. I want someone to analyze my network and provide me with links to people who are in the same intellectual domains but have different perspectives. Then I would like a tool that shows me other intellectual disciplines I should follow.) In any case here are the results of my Twitter Diversity Inventory. N=200 (Yes, I know the numbers don’t actually add up…I took several shortcuts which I can explain if you’d like…but the numbers are generally truthy.)

Companies/Groups 67
Male 68
Female 55
American 122
Non-American 25
Northern European 129
Not northern European 19
Internet/Social Media/IT Experts 64
Other Topics/Disciplines/Interests 77

Bottom line: I’m not very satisfied. Normalizing to a 100-point scale, more or less, my diversity score for American/non American and northern European/non-northern European is below 20. That can’t be good.  It must lead to personal blind spots in how I think about many subjects. The next step is to figure out how to fix this. More to come….

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Posted in Knowledge Work, linkedin, Organizational Dynamics, Social Networks

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