Leadership and Innovation: The new role of leader in network contexts

This post was written with some questions in mind: What does it mean to lead an innovation team in a network context? How can one be prepared for innovation management, talent management and performance delivery? After all, does this challenge change when we consider that relations are configured as networks and this configuration might facilitate the emergence of innovation? Is it possible to manage emergent innovation?

The intention here is to outline some ideas on this subject.


Managing a team: Competences or Talent?

Most multinational and big size companies use a competence evaluation matrix derived from the company’s strategy as a means to evaluate their professionals. We’re talking about a very useful and consolidated tool that guides important processes, from recruitment to career assessment. It is meant to guarantee some uniformity in performance evaluation, facilitate internal hiring and career planning.

But these competences might have little (or nothing) to do with how each person sees his or her own talents. Think of it for a moment. How would you tag your own talents? Are your tags similar to those your organization uses to evaluate you?

One usually finds very similar competences in companies that operate in different business contexts and even different countries. They mostly represent the common sense of professional profile with some bits of differentiation according to the specific organization they are applied to.

It is useful, but overall, this tool subjects people to a gap analysis and reinforces an external reference as a basis for assessment. People are permanently “lacking” something; therefore they should seek development to fit the organization’s expectations. This pattern of evaluation might contribute to professional anxiety, something that our society is abundant in.

We might be missing something very important, especially when innovation is concerned.

Now let us focus on talent, a notion deeply linked to abundance (something that our society is lacking). Understanding talent is realizing what overflows and wants to be expressed by each person. It has to do with the uniqueness, the life history, the emotional structure and the mental maps each one creates. It is related to finding one’s singularity, which is usually a slow and lifelong process. Talent is a much more fluid concept than that of competences, more difficult to catch and hold.


Managing Emerging talents

That said, we can distinguish competence management from the management of emerging talents, considering emerging talents as the unique potential that results from the complex combination of occurrences represented by:

  • The diverse roles each person plays and has played in life (from which individual talent results) and
  • The encounters and talent combinations of a specific group (the talents that can emerge in a team).

Emerging talents, when expressed:

  • Might surprise the person and the team
  • Increases the creative energy
  • Enhances the odds that innovation will come out.

It is part of the innovation manager’s role to facilitate the identification and the connection of the team’s talents, having the mission and the vision of the organization as a framework. Is this complex? Yes, but it is also simple. Anyone can learn to tag his or her own talents, although the total number of tags will certainly be much broader than the number of corporate competences.


Innovation Management


The manager is also responsible for innovation management, often using corporate tools, such as stage gates or portfolio management. These features are critical for the organization to distinguish the most valuable projects and to validate them. It is necessary to have clear criteria for the comparison of these projects and to have consolidated tools for decision-making. Nonetheless, these tools may have little (or nothing) to do with the actual pace of innovation, which is based on the connection of internal and external talents and can include leaps and connections that take time to mature. This fundamental nonlinearity of innovation is called slow hunch by Steven Johnson in his very popular video: Where Good Ideas Come From.

So now we can picture the situation of the leader: different tools, rituals and control codes and, at the same time, the challenge of living in a network that is increasingly enhanced by social media, where each person seeks for talent expression, connections and meaningful production. The bottom up component of innovation becomes increasingly important.

The trapped leader


So what “tools” does the leader have to deal with the bottom up characteristics of innovation? How will he or she manage emerging talents? How can innovation projects based on emerging talents be fostered?

We don’t intend to propose that organizations drop all existing tools and start from scratch. This is not a Zero-One question, but a matter of learning to operate in grey scale and to deal with paradoxes. What we cannot avoid is the fact that it is up to this generation of leaders to seriously address the issue of emergence in organizations and to seek for new lines of action in the “micro-contexts” of innovation that the teams represent.

But how?

Here we intend to present a list of useful practices that might inspire new forms of leadership and complement the control tools that dominate life (and the way of perceiving life, which is more serious) in organizations.


8 Ideas for managing emergent innovation


1. Identify and support the emerging talents: what each person says he or she knows is more important for innovation than mapped competences. Based in the mutual recognition of talents some truly original combinations and innovations may arise. Maybe that’s what Google is looking for when it offers 20% free time for people to meet and create new projects.


2. Give visibility to what the team does, give context to what emerges. The leader may be a mirror, a catalyst that allows the team to see its achievements and to put them into context. For those who want to learn more about this, it is worth reading Margaret Wheatley. But visibility is also making it happen! Once an innovative idea is brought to life, a gate is open. The team must pass the gate and execution then becomes the name of the game. Although accidents might lead the team back to problem solving.


3. Creating contexts for good encounters. What do we want when we meet somebody? According to the philosopher Gilles Deleuze, who interprets Espinosa, good encounters happen when two bodies affect each other in composition, so energy grows. But in organizations, people meet for many different purposes, encounters are not free, but have very specific purposes. Paul Pangaro, in his critics of the excessive faith in design thinking, proposes what he names conversation design: the creation of conversation contexts and dynamics for different purposes. Setting goals, creating solutions and finding relevant innovation questions will require a specific design.

The leader might have an important role here, not only on setting up the design for conversations, but also on helping the team to be conscious of its own dynamics. How do we do what we do? What happens when we meet? Does our energy grow or decrease?

Even though consultants may be hired for this, the leader will increasingly need to think about the adequate space, dynamics and context for each different intention.


4. Create an open language, easily translatable that can be appropriated by the team. It’s amazing how rarely we stop to create new questions, open semantic fields (ie, conversations to share emerging questions and build new metaphors). There are teams that don’t even stop to build a deep understanding of the organization’s strategy. To create new language is a cornerstone of innovation because we live the mental maps we create and these maps are based on language and images. An open language, in beta, in permanent composition, as in open programming, is an opportunity for new types of appropriation and creative work.


5. Assign responsibility and seek responsiveness. On one hand, YES, there is performance to be delivered and the team is responsible for it. But responsiveness is related to the ability to creatively and timely respond to business challenges. It has to do with the ability to surprise and at the same time be relevant. Good relationships and trust among members of the team must then be combined with execution skills.


6. Create boarders, not limits. As Maturana and Avila put it, limits are walls, and boarders are like mobile fences that can be explored and moved to some extent. It is the leaders role to keep the boarders clear and open to creative exploration. Not everything is possible, but it is fundamental to foster new questions and at the same time give containment.


7. Search for meaning. With the volume of information and connections we have today, sensemaking is one of the biggest challenges for all professionals who want to be engaged with networks that are meaningful  for their work areas. Harold Jarche mentions the abilities to Seek, Sense and Share as the basis of personal knowledge management. Not by chance is sensing the central process. The team could be “the” place to share the knowledge being generated in the networks of each person, and to discuss the filters that were used to process information. After all it is in conversation with peers who can challenge us that we generate knowledge. The leader may have an active role by creating context for dialogue and collective information mapping. He can also help the team understand what is most relevant. It’s easy to get lost when the forest is dense, and networks are dense.

Storytelling, something so valued these days, is also an important part of sensemaking, but we are talking, in this case, about making sense collectively in a team. What is the story we are all building together as we do our work?


8. Recognize. The more people share their thoughts out in the open networks, the more necessary to recognize the authorship of ideas. Thoughts are on a network to be appropriated by others, but giving credit is the basis of long lasting sharing. That is, for example, the principle behind the creative commons license. This so called “hacker ethics can be applied to the team context in the sense that people will increasingly share if they feel recognition and connection to others’ ideas.


There are many other ideas that would make a great debate, but I’d like to attempt a synthesis: the organization can be a platform for the expression of emerging talents and leaders can be the conversational weavers of those platforms. Innovation is a natural consequence.

Are you prepared?


Open Innovation: Cracking the black Box

We are opening the Black Box of innovation. In fact, social media is forcing many black boxes to open based on a more free way of making large scale conversations. Open innovation is part of this movement. It is not only a matter of amplifying the search for ideas or the interaction with clients and suppliers. Open Innovation is part of a greater movement, of a Zeitgeist based on open creative fields. But what does this new concept tell us? If there is open innovation would there be a “closed innovation”?

Black Box Instalation by Tom Friedman

Last month we had a Conversation Jam sponsored by Dobra on this theme and our guests were Caspar Bart Van Rijnbach and Caio Vassão at JuntoSP coworkin.


“Closed Innovation”?

According to Caspar, this closed concept of innovation comes from Industrial Revolution, and the creation of the intellectual property is its cornerstone. This vision was dominant at least until the 1990s, when the greatest reference on innovation was 3M and its ultra secretive product development process.

A strong opposition to that idea only emerged after free software. Richard Matthew Stallman, or rms, founder of the movement preaches that all information wants to be free. But that started only in 1985, getting stronger during the 1990s and being crowned with the Cluetrain Manifesto (1999), that introduced the “open” philosophy in the business environment via marketing.

So the idea that a highly innovative production system can be based on the absence of intellectual property is very recent. It generates a radical inversion: those who do not open their innovation process are losing time. Sharing multiplies knowledge and thus makes new possibilities emerge.


Why Opening?

Caspar also stated the difference between open innovation and open ideation. The open ideation shares, and therefore opens, problem solving or idea generation processes of an organization, but the greatest impacts of open innovation do not come from this type of initiative.

In order to access the greatest benefits of open innovation, it is necessary to think about how the business strategy develops over time, understanding why and in what level it makes sense for the company to be open.


Lessons from free software

The development of free software is based on the voluntary engagement of talents to solve problems in the benefit of a community (of users and developers themselves). There is no money involved, but anyone can use it. “Do your best and be recognized”. Self motivation is the key and reputation is the necessary consequence.

But are organizations prepared for this type of self motivated free engagement, at least on innovation matters?

Are organizations able to foster the intelligence of their internal networks?

From a people management point of view this is a radical idea that shakes systems such as career and performance management, to say the least.


Innovation and Motivation

For Caio Vassão, the central theme is: what motivates innovation inside a company? How are innovative ideas validated?

But we can go even further: a key challenge to the open innovation process is to listen to innovation perspectives brought by partners from outside the company´s boundaries.  Does the organization let itself be modified by its network? Or is it going only as far as its own questions allow?

According to Paul Pangaro, variety is one of the most important conditions for innovation. Activating this variety in a collective creative process is a big qualitative leap for innovation networks. Caio Vassão argues in the same direction: innovation is a change in the ontology of the organization. It refers to the categories the company uses to organize its processes, its relationships and the routine discourses. The ontology determines choice mechanisms that can limit or amplify the variety the organization accesses to innovate.

Ontologies in a network are emergent. It is very complex for an organization to deal with them when its planning and management systems are based on pre existing taxonomies. Conversation usually goes around “growth pillars” and “strategic vectors” everyone should follow.

At the same time, there is enormous potential to that. There might be many innovation possibilities that are just not perceived by the mental model and the installed conversation patterns.


Innovating is dealing with paradoxes

So it seems that innovating in an open way means dealing with a fundamental paradox: being connected to what emerges and, at the same time, being able to make sense of it through strategy.

Since the ability to deal with paradoxes is one of the fundamental properties of complex adaptative systems, it seems we are getting somewhere. That is how it works in nature: clarity of purpose and deep connection to the environment at the same time.


A new mindset

An interesting view was presented by designer Ihon Yadoya at our Jam: “I don´t feel limited by the work environment. Innovation opens itself naturally when we solve our problems.” For those who think that way, the company is not a limit. Openness is inherent to innovation, something that is always available when we need it. This is an important mindset change. From the individual´s point of view, there is no closed innovation.

For those who work in connected environments, an idea generates a series of interactions and compositions. There are no boundaries to this. One more challenge for organizations facing the so called Y generation, one that lives in remix, and in eternal beta.

“Ideas belong to those that put them to action”- says Ihon. It´s as simple as that!


Who is ready?

The challenge is this collective authorship of ideas. And here some fundamental ideas on open innovation and strategy introduced by Caspar might help. He brought the example of companies that take part on the Battle of Concepts, promoted in Brazil by Terraforum. They are obviously worried about intellectual property.

But how do companies get ready for this new reality? Strategic thinking, says Caspar.

Kip Garland, brings his contribution and makes some important distinctions. For him, there are three levels of open innovation: sharing, building and decision making. Opening the decision process is the most complex level and sharing challenges is the less complex. Sharing refers to creating a collaborative network, building refers to bringing in each member´s strength and decision making… well, that´s where the greatest dilemmas are.

Caio agrees: making distinctions and choosing what to open is key. A reductionist view does not generate a process of collective construction. If the open innovation project is designed exclusively to profit from “Lei do Bem”, a innovation policy in Brazil, the benefits are reduced. The open mindset does not penetrate the culture.

Caspar presented the Phillips Innovation Camp case, which brings together many partners of the company to an environment where architecture contributes to make people meet and exchange ideas. There are no cars. An open culture emerges.


Shortening the thought-to-action cycles

Caio considers that open innovation is related to a short thought-to-action cycle. Somebody perceives a new reality arrangement, new ontologies emerge, unseen opportunities arise.

Kip brings the Visa Vale case to the table. The company was conceived by an ABN Amro Real bank executive who understood the consequences of a change in Brazilian regulation laws. In Five years, a 2 billion dollar business was created… outside the Banks boundaries. The institution could not evaluate the executive´s proposal of a new business when he was still an employee. It was a path that could not be analysed by the ontologies the company had at that point.

The challenge therefore is: how do we present business concepts that don´t yet exist? How are we able to listen to the proposals open innovation can bring? How do we distinguish what is relevant?

For the group that was present at our Jam, one of the most important answers is creating prototypes that materialize these possibilities. There is a certain simplicity to that: creating prototypes is storytelling to present ideas.

Caio suggests: then it is not a question of what we have to build, but of what we have to take away for motivated people to be able to present their ideas. It is about building open platforms and short cycles of prototyping inside and outside organizations, labs of new realities in which creation and action are closer and closer.

So much to do!

I Love Idea Jams!


Metadesign and Innovation

On December 1st we had another interesting conversation here at JuntoSP, our coworking space in São Paulo. It was about metadesign but the innovation theme was brought up again, it seems to be what makes hearts and minds uneasy.

Ours guests were architect Caio Vassão and conversation designer Luiz Algarra, in addiction to some communication professionals, designers, executives, and partners from Dobra’s network as well. It was a really interesting mix of people.

Where does the term “meta” come from?

According to Vassão, the first term to use the prefix “meta” was “Metaphysics”. Legend has it, that it was a way to classify some of the books of prime philosophy by Aristotle, which had no name. As they were positioned after (meta) the physics books, the term metaphysics was created. But the word metaphysics has important consequences.

It refers to matters of ontology, namely, it belongs to the same category of thought we use to reflect about something, adopting the position of an observer of our own lives: a meta-position.

For me, Humberto Maturana´s question: “how do we do what we do?” is the great and powerful meta-question. We can ask ourselves about how we do physics, how we work or how we design the spaces we inhabit. “The metadesign is the project’s own design project,” says Vassão.

He gave the example of the program METAFONT, a publishing system that, as the name says, programs fonts. The person who programmed the system to program fonts, was a metadesigner.

It’s as if life had layers and we were rising and rising to increasingly higher levels to observe what we do. These layers, Vassão says, are levels of abstraction. Being a Metadesigner is to place oneself in a higher level of abstraction to reflect upon the reality being created.

Metadesign and complex systems

When we face complex systems, as an organization or a community, for example, we can’t create a closed project.

The system is constantly changing and adapting. Metadesign then creates an environment of decisions made of few basic guidelines, criteria that make life easier for those working within the system. These criteria are not control parameters, but operators to guide action within the system which are validated (or not) by use.

The principle behind it is that simple elements can generate complexity. Reversing this reasoning, we may say it is possible to find the simple elements that build a complex system. The Metadesign seeks to identify those simple elements a posteriori, creating what Pierce called opportune categorical system.

Shared criteria for operating in a complex system: it is easier to say than to define them, but they can help us give a positive answer to the question “is it possible to project complexity?” If we think about working and learning contexts, this is a key question, since the growing connectivity and availabity of information increases the complexity of the systems we operate in. It is a great temptation to simply categorize and cut the system to pieces to understand it, with great risks of ending up with inadequate analytic answers.

Algarra pointed a critical distinction: what makes us human is that we talk about these criteria or ontology. This is one of the foundations of the collective intelligence concept, which rises in Bateson (Steps to the Ecology of Mind) and is further developed by Pierre Levy.

That might sound harsh, “headstrong”, ultra-reflective, but then another interesting concept was brought to stimulate the conversation: the homo ludens. According to this concept, the basis of culture is a play.

Then what makes us human is our ability to play with concepts and ontologies, to play with the design of how we live what we live. Playing is an essential, yet overlooked skill because it leads us to revise, combine and generate concepts creatively.

We lead the life we are able to perceive and talk about. Playing with concepts that underlie our lives would be metadesign.

From this point on talking about innovation was inevitable.

What is innovation anyway?

Algarra brought up Maturana, and proposed innovation emerges to save something we want to conserve. We want to conserve a way of life, the possibility to have affordable energy, the possibility of dealing with scarce resources and yet have comfort; we want to sustain the business of an organization. Actions, ideas and changes are articulated on the basis of what we want to conserve.

Vassão suggests: innovation is manipulating ontologies. We can do it top down from pre-defined categories or bottom up as we watch the events and create ontologies from this observation. For Vassão, this second path is much more innovative.

So innovation would be “to confront the cognitive boundaries of the reality that we build.” I´ve  twitted this statement of Vassão´s and Paulo Ganns (@ pganns suggested:) “Breaking instead of confronting?”. Well, maybe innovating is “dissolving the cognitive boundaries of the reality we build.”

But why innovate? Where does this desire come from?

Again we returned to the point of the previous meeting: the reason why of innovation.

We discussed two opinions about the origin of our motivation to action: the reaction (negative motivation generated by a  perception of error) or affection (according to Deleuze, affections are our real drivers). People who work with innovation know it very well that there is a big difference between these two motivations!

Innovating in response is not the same as innovating in search of a path built upon affection and desire. It is much more difficult to generate radical innovation from the first path, when the decay of something is imminent, but, yes, there are many who only get moving in this kind of situation. We are inside the box.

Then someone says: we live in alienation, we lack awareness of where we are, and it is difficult to be connected to one´s own emotions when we’re trapped in this kind of place.

Think outside the box? What box?

The box would be this ontology, these categories of thought that inhabit us without our being aware and determine what we can see. A metadesign conversation opens these boxes and these categories to reflect and play with them. As Maturana would say: Do I want to conserve this way of thinking?

Is Innovation always a good thing?

That got us into a conversation about the binomial innovation x ethics, and about how we think of innovation in a complex system (the communities where we live in).

In a complex context, an innovation unleashes a series of systemic reactions. Vassão reported the case of the pocket car project in which he participates.

Thinking about a new type of car means rethinking the entire production chain of the car. If the engine is oversimplified what will happen to the jobs of steelworkers who make engines? If the cars are shared, what will happen with the insurance companies?

As consequence, we can consider that the real challenges of innovation begin, in fact, after a new product or action is launched. Innovation needs will be multiplied by the actions we have to take to deal with the systemic consequences of that launch.

How do innovations emerge in culture?

Innovation irradiates through new concepts that will penetrate and spread in a given culture. It may be a new product, but it may simply be a new concept with which we begin operating.

Someone asks: does it come from a new need? Or we create new needs?

Who needed the cellphone before it existed? The need seems to be more of a consequence. The innovation arises; we become accustomed to what it provides. From then on the need emerges and is nurtured.

But innovation goes far beyond product, services and processes. It may simply be a concept, a new way of living. (The term “to stay” – for example, was created less than 20 years ago to name faster forms of love relationships – in Brazil at least).

These easily replicable concepts that change our lives are memes.

Thus innovating is agencing possibilities. If you do not understand it yet, do not worry, if you are curious about it, read a bit of Deleuze, but let´s make it simple: possibilities are vectors that are available, someone or something finds an intersection or a new combination of these vectors, and voilá here’s the innovation.

Being attentive to the events that emerge around us without categorizing them a priori, allows us to think of new ontologies.

Innovation is experimental, says Vassão.

Yes, we live in Beta.

Mariana Gogswell, another colleague places: “How can we develop the emotional resources to live like this?”

Good question! We´ll stick with this one and reflect upon its consequences to education, learning, smart work and innovation.

Social currencies increase employment and income in Brazilian communities

Inspired by The Future of Money Project, we have translated the present article from Mercado Ético, originally written by Naná Prado, from Instituto Akatu. Special thanks to Christina Carvalho Pinto and Henrique Carvalho.

We all know the dollar, the real, the euro. But have you ever heard of the Apuan? And what about ‘freires’, ‘sampaios’, ‘vistas lindas’ or ‘moradias em ação’, do you know? They are the five social currencies accepted by the trade in some communities in São Paulo since last year. This means that in some neighborhoods the Real ( the official brazilian currency) is not the main currency.
In Jardim Filhos da Terra neighborhood, in the north, traders have accepted the Apuan. In Jardim Maria Sampaio, in the south of the town, the currency that circulates is the Sampaio. The Freires are accepted in the Jardim Inacio Monteiro, in the east, the vistas lindas in Jardim Donária in the west, and the Moradias em Ação in Jardim São Luiz, in the south.
“The social currency is very important to the community because it makes wealth circle around the neighborhood. This happens because it is accepted only by businesses enrolled in the district Community Bank, enabling those enterprises to make the exchange of social currency to Real “, said Diogo Jamra Tsukumo, coordinator of the Solidarity Economy (NESOL) at University of São Paulo (USP).
The Community Banks are projects that support the popular economy of  communities with low Human Development Index and provide solidarity financial services in a network of associations and communities. In addition, community banks operate to generate employment and income by promoting the social economy. The community banks belong to the community, which is also responsible for its management.
Tsukumo says that the social currency allowsa greater circulation of wealth in the community, increasing numbers of economic transactions and enabling local economic development. In this respect, both residents of the community, who get access to credit, and local businesses, which gets more clients, win.
“For many people in the community, this project was a dream. Now everyday we see an improvement in the self-esteem of everyone, “says Hilda Pires, manager of the Apuan Bank, created in June 2009 as part of the Housing Development. Hilda is part of the Landless Movement for Housing in the north of Sao Paulo, which has the support of the Technological Incubator of Popular Cooperatives of the University of São Paulo (ITCP / USP).
Just over a year after the establishment of the Bank Apuan, Hilda is confident that the community is reaping good results, “today we have a sewing cooperative in full development, a cooperative of cleaning products and once a month we conducted a fair to sell all products made by the community. ” But none of this would be possible without the bank Apuan. “In addition to local development we have increased the demand for jobs and, consequently, the income of residents as well,” concluded the manager of the bank.
Throughout Brazil, there are currently 51 social currencies. They do not replace the Real – the idea is that they work in a complementary way to the national currency, developing local economies. For this purpose, they must have real backing , which means that for every amounty of the social currency there must be a real currency saving. Recognized by the Central Bank, the social currency needs to be created in communities with a well structured neighborhood association.
According to the coordinator of the Solidarity Economy of USP, the currency is an instrument of exchange and it is important to boost its circulation and reduce the idea of accumulation. “The social currency creates and recovers the identity of the community, enhancing local production and generating development in all senses of the word in a given community,” he says Tsukumo.
The social currency shall not prevent a bank customer who was benefited from a consumer credit (in social currency) to spend this resource on any product that is available the neighborhood. This means that the consumer does not necessarily need to buy any object produced by the community. He can buy any product offered on the market or nearby pharmacy.
For the coordinator of USP, what really guarantees the responsible consumption of products is the educational process and cultural transformation that occurs with the implementation of a Community Bank and a social currency.


Tsukumo believes that a process involving campaigns for local consumption and support of solidarity economic enterprises is an interesting way for future sustainability and conscious consuming in communities. Combining these points to productive and to actions by the credit agent, enterprises can offer alternatives to the consumption of neighborhood residents.
“The system also has an identity function, it allows  people to consume in the neighborhood where they live, using a currency that has the name of the neighborhood,” says Tsukumo. To encourage the public to use the social currency, traders call for discounts. This way money is getting in the community. “The more money staying in the community, the more it will circulate internally and will generate more wealth. The more times it passes from hand to hand, the more you will be creating value and wealth. ”
Besides discounts, maps of consumption and production to evaluate consumers needs versus local production is made to foster the growth of the use of these currencies. The community also organizes forums to discuss issues such as interest and guidance of community banks in granting credit.
Tsumuko believes that the potential growth of these experiments is as large as the number of communities in Brazil and worldwide. “Even more now that the Central Bank at the end of last year, has created a working group by an agreement with the National Solidarity Economy Ministry of Labor and Employment to study these innovations, publicly acknowledging the importance and value of these initiatives for the development of communities and the country, “he argues.

Did you know?
The first Brazilian community bank was Palmas Bank, which appeared in 1998 in the Conjunto Palmeira, a neighborhood on the outskirts of Fortaleza. In 2003, the community organized itself and established the Palms, which is now responsible for the opening of most community banks in the country, among them those in São Paulo. The expectation for the next two years is that 100 community banks to be created over throughout Brazil.
– Ceará is the state that focuses more on social currency. In small municipalities, they can be used in the whole city. This is the case of Acaraú, Tamboril and Paramoti.
– The social currency also exist in other countries. In Argentina, they came to reach nearly 1 million people, after the 2001 economic crisis.

5 Reflections on Open Innovation

What is the big buzz about open innovation? What’s the big change? The subject was discussed at the Connecta 2010 Congress in São Paulo and at Stefan Lindegaard´s workshop (during The Hub SP Winter School). It´s been approached in books and web communities and accounts for more than 12 million links at google search. Here are some thoughts about the theme from the last few weeks.

Social network mapping by Felix Heinen
1. All innovation is open. This conception was clear both in the speech of Matthew Heim, CEO of NineSigma, at Conecta 2010 as in Stefan Lindegaard´s.

Today open innovation has become a “buzz word” because new online tools have opened up possibilities that where not devised before, but in a few years all innovation will be open, or connected, as Jeff Bellairs, director of General Mills worldwide Innovation Netwwork, puts it in Lindegaard´s book. In addition, all innovation has always been somewhat “open”, since it requires a huge range expertise to be implemented. The mith of the Genious is far behind, we all know innovation is in most cases a collective achievement.

The difference nowadays is the availability of new mechanisms for building conversation networks around innovation. There are far more sophisticated ways of searching, connecting and managing such networks. Any company that has a well defined innovation question, a good “Elevator Speech” (making its innovation vision clear) and the right tools can have access to virtually any connected professional in the world. (That is not enough to keep an innovation network alive, but it might be a good start).If each person is a portal as Augusto de Franco put it during Conecta, the possibilities are endless.

So although basic characteristics of innovation, such as the need to coordinate a diversity of players and the inevitable stumbles inherent to the creative process, are the same, there is a significant increase in the complexity and connectivity of innovation networks and of organizations themselves. New questions emerge in this context, such as how to stimulate agents to connect and generate value in an innovation network and how to deal with and profit from these new possibilities. Open innovation potentiates the creative capacity of individuals and organizations, but it is a new way of discovering, relating and doing business.

Perhaps the big issue is creating a management paradigm to fit such a connected business environment. The verb manage has to be reinvented to deal with elements such as control and instability, creativity and organization. Innovation lies at the edge of chaos but it takes very wise management to deal with the paradoxes inherent to this state. Who is ready? How will partners in a network collaborate and deal with power relationships, for example? Which network patterns will emerge from open innovation?

2. It must start at home. One point that is placed as a success factor by several experts and case studies is to start articulating the organization’s internal network. It may seem trivial, but creating a network culture in which the relevant innovation questions can be shared with staff members and direct partners is a big issue.

The lives and conversations inside companies are still largely organized into “clusters” (work areas, processes) and it is difficult to visualize the larger map of innovation when time is short and accountability for results relentless. One must deliver the planned. How will organizations deal with emerging issues that change nonstop?

In this sense there are great challenges in terms of culture and organizational environment, such as to enable engagement in innovation projects (not only those projects that are already the responsibility of each one), to open space and to recognize that engagement. Most organizations are still far away from a “project” culture, where one can engage by his or her own desire to put to use the top of one´s knowledge. How will that be proposed to the external network if it is not the proposal internally?
3. Networking is bonding. There is a good discussion about how to promote the engagement of different actors in open innovation. There are two clear paths, and in Matthew Heim´s vision they are complementary. In the first case, actors enter the network to help answer a specific innovation question. In the second case, a permanent network is formed, and individual actors have a lasting bond.

There’s a difference between these two paths. In the first case, thinking of network management can make sense: you need to manage the innovation questions and the actors that can help solve them.

But in the second case, who manages the permanent network if each organization is (at principle) just another actor? And in the case the network is managed by a big company, how will creativity and self organization emerge? How will power affect the development of fair share relationships, as Umair Haque suggests in his behavior innovation approach?
Sustaining a permanent network implies network ethics. Today it is very common for large corporations, for example, not to respond to work proposals developed by their partners. Imagine how this behavior would be seen in a network, where spontaneous contributions among agents is what brings value to reputations.

Relate this to the theme of “being the preferred partner,” posted by Lindegaard in his book, and imagine how network relations represent a change for organizations. It must be a new way of living if you really want to have it in its full potential.
4. The network builds on diversity. Venessa Miemmis, who defines herself as a digital ethnographer, provides some inspiration to think of win-win relationships not as equality, but as something to be built from the different roles that actors play in networks in which they participate.

Venessa has posted a very interesting chart about the different roles that actors have in networks (which was deeply discussed, if you have the patience to read the comments).

When I looked at the chart I thought about the level of complexity of any sort of “management” or even setup of a network. Each actor takes on different roles in the networks it participates, and those roles change as time passes. To maintain a network with an ecology that allows both the diversity of actors and the diversity of roles played by them is pretty challenging. It is worth reflecting on how this affects  open innovation.
5. Creating conditions to be affected by a network is one of the biggest open innovation challenges. I’ve been reading It’s Alive by Christopher Meyer and Stan Davis where I found a wise statement I play freely: networks make us more sensitive but also more vulnerable to chance.

It is not just a question of demanding solutions from a network, though that can lead to good problem solving. The point is also to improve organization sensitivity and improve the quality of its problem finding capacity. Being connected increases the capacity to perceive transformations in business environment, but that depends on the network pattern you are living. This is about asking and being asked, to demand contributions and contribute as well. That is why understanding network patters will be so important to open innovation.

Finally, a question that maybe just time will respond: will open innovation undermine the organizational models as we know them? How?

How does organizational culture change?

I was recently reading an old synthesis of the work of Edgar Schein, an author who always helps us to think about organizational culture. He says that the culture of a group is formed around a few basic assumptions:

  • The nature of reality and truth.
  • The nature of time.
  • The nature of space.
  • The nature of human nature.
  • The nature of human activity.
  • The nature of human relationships.

Culture is “a pattern of shared basic assumptions that the group learned as it solved its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think and feel in relation to those problems” (Schein, 1992).  That is why organizational culture is so difficult to change.

Recently I had a funny conversation with a senior executive about a network that was being created within the organization where he works.

For him it was difficult to understand that network moderation (or netweaving, as many might call) is a process, and it’s impossible to make a “schedule of posts” or try to define what the community may or may not do. The network form is emergent.

It´s not an easy thought for those worried about ROI or indicators…

Inspired by those thoughts, I would consider a reflection of two parts:

How do changes in working patterns or structure affect an organization?

Where would process management and network management, for example, lead us?

I think it is interesting to return to the theme of culture at this point because we often hear that the company “X” will implement process management or will implement a social network.

But any change of this sort takes place around an established culture, around given assumptions and currently accepted success criteria. A culture is modified according to the changes in corporate conversation networks, as professor Maturana would put it.

The word ‘implementation’ might be of little value in this context. For example, nobody implements a new concept of time. It is impossible to replace one way of living for another when we are dealing with human systems.

What happens to human groups then? How can they absorb (and modify) a certain change that is proposed as an implementation?

Some examples illustrate it.

Case 1: The other day I was at a chat in a social network that I help moderate. The guest was a senior executive of the company and the room was full. The guest, however, was not yet accustomed to this type of online interaction and it took him some time to answer each question posed in the chat, so an awkward virtual silence filled the room between his responses.

Now think about the basic assumption behind this behavior: people entered the chat to speak to the senior executive and await his responses. It took a while for people to realize that meanwhile they could talk to each other, but when it happened, the quality of the chat changed considerably and time felt short for so many discussions.

It was simply so different from what that group was used to, that, at first, the standard behavior of having an authority figure mediate the conversation prevailed. The installed culture persisted in the virtual environment.

How does this type of experience affect the organization? How does this affect daily routine? It is not yet possible to say. It might open a new “drift” (or deriva in portuguese), a new flow of conversation and that exercise might maybe lead to less centralized interaction experiences.

Case 2: I was talking about the implementation of process management with a group of executives when a question popped up: how do organizational processes relate to one another? Someone pointed to the slide with the “official process design” of the organization, but no one seemed satisfied.

They clearly perceived the processes entangled in a much more complex manner than that portrayed by the old box-arrows model. Life subverts charts and escapes pre-defined structures.

No diagram will simplify the life of an organization. Simplicity occurs only when we are able to talk about “how we do what we do”, and act recursively in search of what is simple.

No network is implemented. Everything is built based on what already exists. People in an organization do get entangled, so the same happen to processes. That is just how our conversation networks are dynamically built. It is possible to stimulate open spaces for conversation and legitimate networks that already exist, but the idea of “implementing”, seems somewhat misplaced. We must be humble to suggest, feed and observe, but no one knows in advance what will happen in an organization.

How can we propose a new work model if we live our lives with the eyes of control? How can we change the nature of time and space, as proposed by Schein, if not by experiencing?

Using the web to create knowledge

I´m very anxious for the next online congress. It will be held tomorrow on the Corporate Learning Trends site.

It´s amazing how this kind of networking makes us feel stronger and able to deal with more complex projects. I feel like I´m making a colection of friends and knowledge. Some I´ll meet in person, but most of them will allways be a small picture, a blog, a bunch of ideas, a writting style. Mireille, Eric, Jan, Barbara, Marcos… maybe I´ll never hear their voices.

It´s a totally new culture, but once you get started, there´s no way out. Right now I´m working on a project on the interaction of web 2.0 and the innovation process on a client of mine.

I feel like I´m mining people and knowledge to help me on this huge task!