By Henry Doss
The world is too much with us; late and soon,
Getting and spending, we lay waste our powers;—
We have given our hearts away, a sordid boon!
– William Wordsworth
I spent several days in San Jose recently, participating in my firm’s Global Innovation Summit. It was a gathering of hundreds of innovation-minded folks from around the world, all gathered together to share insights and learn about innovation ecosystem building. I met and talked with entrepreneurs, corporate leaders of innovation, economic development experts, artists, private- and public-sector innovators, venture capitalists, and champions of social causes. There were magicians, wizards (no really, wizards!) illustration artists, jugglers. The sheer diversity of attendees was staggering.
I couldn’t help wondering what it was that brought such a diverse, talented and high-energy group together, across multiple time zones, geographies, cultures, languages and distances. What was the “tie that binds” that could hold the attention and energy and focus of such a mixed lot for days? I wasn’t sure.
On the last day, we played a short video of attendee interviews, filmed throughout the Summit. The purpose was simply to present an overview, a kind of tapestry of what individuals were thinking about, what their experience had been. It was intended as a celebration of shared experience, but –Lo and Behold! -buried in the video was the key to whyeveryone was there. One attendee was asked what she was learning at the Summit, what there was of value to this kind of gathering. Her answer was:
“This is innovation church.”
For any organization, for any individual who is trying to build value, for anyone who is out simply to do good work, to make a difference in the world, this sentence captures in four simple words all the things that need to be said about ritual, authenticity and values; about belonging to something; about finding value in those who share your values. It contains the secret to building powerful cultures, moving experiences and a sense of purpose.
What William Wordsworth had to say in the first half of the 19th century is still moving, and important, today.
“The world is too much with us; late and soon,” said the great Romantic poet William Wordsworth. And this may very well explain why organizations, and people, find themselves tired, off-kilter, unfocused, lacking in drive — why we in fact need an innovation church. We, and the organizations we lead, the goals we set, the things we strive for . . . all need something more than just “the world.” We need confirmation that we are in something for a reason, that what we do matters , and that other people see, understand and can speak to the importance of our work. Without this sense of purpose, of something bigger than ourselves, of something bigger and more important than the organizations we are part of, we are diminished. We are disconnected.
Think about your own time and effort, the culture and day-to-day values of the organization you are part of, and all the many things you do to achieve – what? Do you carry into your work a sense of reverence, a sense that beneath all the hubbub and noise of the world in operation there is something bigger than you? Do you feel, at the end of a long work day, that what you did mattered? Do you carry a sense of belonging with you into what you do?
Probably not every day. It’s hard to sustain inspiration, high creative energy, belief in self and possibility. It’s hard to be filled with purpose all the time. We find ourselves distracted by minutiae, drawn into the fuss and bother ofdoing. And then we forget to be. That’s why we need to be attentive to shared rituals, to the open expression of value systems, to the celebration of things bigger than ourselves; that’s why we need to create our own innovation church. We manage our organizations to ends, to achieve certain goals; welead for other reasons. Our goals are not the why of our work, or rarely are. We don’t reach the end of our days celebrating one particular year’s particularly good ROI. Because that’s not purpose. That’s just a number. If we are lucky we reach the end of our days celebrating that we were part of something that mattered.
I think everyone at our gathering tapped into this something. I did. And the one thing I’m sure of now is that we should all make it a habit to seek out and attend our personal choice of innovation church.
By Henry Doss
Innovation has a magic solution triumvirate: Brokers, role models, and risk-takers.
“Send lawyers, guns, and money… to get me out of this.” – Warren Zevon
When the mythical narrator in the above-quoted Warren Zevon tune found himself in a bit of trouble, he knew he needed three things: “lawyers, guns, and money.”
Innovation, likewise, has its own magic triumvirate solution. But in the case of innovation, it’s not “lawyers, guns and money” – it’s brokers, role models, and risk-takers.
If you are faced with building or nurturing a culture of innovation in your organization, you may be looking for an approach that will give you a total solution – sort of the “lawyers, guns, and money” approach to innovation challenges. One place to start solution hunting is in the innovation culture’s informal trifecta: Brokers, role models and risk-takers. When these roles are properly filled, you’ll find cutting-edge innovation. When these roles are not being filled, you’ll find a relatively bland, safe and predictable organizational dynamic.
Each of these roles serves to break down some common barrier to innovation, and to foster the kinds of interactions and collaboration from which innovation emerges. Brokers break down silos and build links between information groups, supporting cross-functional conversation and exchange. Role models inspire others by setting observable behavioral examples. Risk-takers overtly demonstrate the potential return on risk-taking, both for individual careers and for organizational benefit.
You won’t generally find these functions in job descriptions, nor will you find someone with a title like “risk-taker.” (Well, you shouldn’t, although given the wantonness with which job titles are created nowadays, you might!) Neither will you find these roles being directly incentivized, or formally evaluated, or even recognized, as a rule. Like many aspects of an innovation culture, they happen – serendipitously – or they don’t. And because the roles are elusive and difficult to measure, they can go unappreciated and unnoticed. And then they gradually fade away.
But if you look hard in your organization, trust your own judgment, and use your best observational skills, you can find, nurture, and acknowledge these key individuals and keep their critical skill sets alive and growing.
Here’s what they do and why they’re important.
BROKERS: The greatest threat to innovation is an information silo. Free and open information exchange and conversation is the fuel that drives innovation in organizations. But all too often, information is walled off in divisions, functional areas, or geographies. Brokers in organizations provide the critical function of “information arbitrage.” They are the ones who seek out connections between people and ideas and foster conversation and interaction. If you see cross-discipline and inter-team work that is producing new ideas and thinking, there is someone playing the role of broker – someone who saw a connection between this and that and took steps to bring people together. Brokers are often somewhat rogue or indifferent to convention and hierarchy, and the value they create is often so intangible as to go unnoticed. But look hard and you’ll see them working to bring ideas and people together.
ROLE MODELS: A role model is much more than simply someone who is visible. Role models embody an authentic and purposeful set of values and demonstrate those values through their actions. Innovation role models may not be risk-takers themselves, but they will understand the importance of risk and actively support risk-taking in their organization. They may not be active connection brokers themselves, but they will understand, look for and encourage connection making. The old saying, “Do as I say, not as I do,” gets turned on its head by the innovation role model. In the presence of powerful, authentic role models, members of an organization will model actions more than words. They will seek to “do what the role model does.”
RISK-TAKERS: Risk taking is not about being foolhardy. The innovation risk-taker brings good judgment and self-awareness to everything, but understands that there is a point – just there, beyond the safe, beyond the secure – where there are disproportionate rewards. In any organization, there are plenty of fumbles, missteps, train wrecks, and failures. But these are less the result of risk-taking, and more of ineptitude. Look for the places in your organization where there is lots of homework being done, lots of direct, plainspoken conversation, and a strong sense of fun, and you’ll find the risk-takers there. Risk-takers resist the temptation of the status quo and continuously push organizations into new – and quite possibly innovative – areas.
Like Warren Zevon’s answer to his problem, “guns, lawyers, and money,” – there is an answer to the innovation challenge: brokers, role models and risk-takers. Take an informal look around your organization. See if connections and links are being made between areas of operation and expertise. See if there are visible, authentic champions of innovation, and see if there are strong, well-prepared risk-takers pushing boundaries. If you are finding these kinds of activities, congratulations – you are in a strong innovation culture. But if you don’t, maybe you better make that phone call for “guns, lawyers, and money.”
Notes on the practice of innovation and technology commercialization
A colleague at T2VC posed this question:
- We know that if everyone is an entrepreneur, a society will not function.
- We know that if everyone is a producer, a society will wither.
- Thus, is it possible to determine the exact proportion of innovators versus producers to maximize the productivity of an ecosystem?
This question is, I think, part of a broader one: in an innovation ecosystem is it possible to adjust all the various elements so that the ecosystem optimize its outcomes (measured in some way)? These elements may be universities, technology commercialization systems, public sector financing funds, and so forth – more about this later. You may remember that in the February 2013 Imperfect Works http://innovationrainforest.com/2013/02/06/imperfect-works/ blog in this series we talked about optimizing which means “make something as good as possible within a whole system” although each individual element may not be operating in the best way it can.
In their paper Chaos prevailing on every continent: Towards a new theory of decentralized decision-making in complex systems, http://www.temple.edu/lawschool/dpost/chaos/chaos.htm researchers David G. Post and David R. Johnson present a method of finding optimal configurations of elements in complex adaptive systems. The authors pose the Gardener’s Dilemma: how can a gardener find the best or at least a good configuration of a collection of plants whose overall “fitness” (for example total yield) is dependent upon the behavior of all the other plants? You may begin to see how the garden is an analogy for an innovation ecosystem. We shall see shortly if this analogy is helpful.
In this imaginary garden there are plants of different species. The gardener would like to obtain the most luxuriant overall growth. The gardener must decide for each individual plant: should it be pruned or not? How can the best combination of pruned and un-pruned plants be created that will produce the greatest yield for the whole garden?
As always, we need to make some assumptions, which for this garden are:
(1) The relationship between an individual plant’s pruned or unpruned state and its growth is different for each plant. For some plants growth will be increased by pruning, for other plants pruning will reduce their growth.
(2) Each individual plant’s growth can be affected by the growth of other plants, for example as one plant grows it might block sunlight reaching another plant that needs it. Kauffman calls these spillover effects although I prefer interactions.
Even with such simplifying assumptions it turns out that this problem, and many similar ones, are “computationally intractable” or in other words incapable of true solutions by any known analytical methods. A little thought may convince us why this is the case for our garden. Suppose there are only three plants each of which may be pruned (we will call this state 0) or unpruned (we will call this state 1). We can use the tree diagram below to help figure that 8 possible configurations exist, namely 2 x 2 x 2 = 23.
A little further arithmetic will show for 4 plants there are 16 possible configurations, namely 2 x 2 x 2 x 2 = 24 and so on. To generalize this pattern we can say that in any system with N elements, each of which can take one of S possible states, there are SN different system configurations. This SN can rapidly become a very large number. For 10 plants the number of configurations to be tried is already 1,024. Hard work for the gardener!
Is this gardening knowledge of any practical use for those of us developing optimal innovation ecosystems? If this this ecosystem analogy is computationally intractable, why am I wasting your time discussing it? Stay with me for just another moment and I will demonstrate its practical use – but first one final research result.
When a problem cannot be solved by mathematical analysis computer modeling may help, even greatly oversimplified models can be used as long as their simplifying assumptions are not forgotten when applying the results to the real world. Stuart Kauffman and his colleagues have developed a family of computer models and problem-solving algorithms for complex interconnected systems, known as “NK models,” for studying various forms of the Gardener’s Dilemma in, for example, evolutionary biology and cyberspace law. We don’t have space for details (which are in Johnson and Post’s publication) but essentially the method consists of modelling interactions between ecosystem elements. The elements in the garden ecosystem are sub-divided into any number of non-overlapping but interacting self-optimizing parts called patches, like a patchwork quilt.
To quote Post and Johnson “The result is a fairly remarkable one: It is by no means obvious that the highest aggregate fitness of the system will be achieved if it is broken into quilt patches, each of which tries to maximize its own fitness regardless of the effects on surrounding patches. Yet this is true. It can be a very good idea, if a problem is complex and full of conflicting constraints, to break it into patches, and let each patch try to optimize, such that all patches co-evolve with one another.”
A typical innovation ecosystem has elements (S) such as universities and research institutes with their technology transfer offices (TTOs), new business incubators and accelerators, some form of central support organization to assist TTOs with issues such as market intelligence and so forth, financing programs such as early-stage R&D grants and seed and venture funds, economic development organizations, science and technology park, a contract research organization, and sometimes miscellaneous organizations which were formed for different times but are still functioning. All these can certainly exist in many states so N will be much larger than 2 as in our garden.
Applying what we have learned, it is good practice to divide these ecosystems into patches, for example four possible patches could be:
Universities and research institutes with their technology transfer offices (TTOs)
Central support organization to assist TTOs
Early-stage R&D grants and seed and venture funds
New business incubators and accelerators
Contract research organization
Science and technology park
Economic development organizations
Miscellaneous organizations which were formed for different time
Having the elements trying to maximize their fitness within their patch improves trust and communications between them – and as a result – decreases transaction costs. Furthermore, this should break down the rigid hierarchical structure from which some ecosystems suffer. Other practical applications of the Gardener’s Dilemma can be found, such as explaining the familiar S-shaped curves of technology growth and disruption. Climbing around the fitness landscape searching for peaks and valleys will be discussed in future blogs.
Your response to all this may be “but this is obvious, I don’t need computer models.” In complex adaptive systems what appears to be obvious is not always so (occasionally disastrously not so). Personally I’m comforted by having a foundation theory.
Next time: Games of chance? Cause and effect in innovation ecosystems.
Venture capital is adapting itself to the new startup landscape
Henry Doss, Contributor
“That we must all die, we always knew; I wish I had remembered it sooner.” – Samuel Johnson: Letter to Joshua Reynolds
This interview is the third in a series with Dr. Brad Stuart, a physician and leader in advanced care innovation. In the first interview – here – we discussed the current state of health care in the U. S. and how we might approach innovation in the overall health care system. In the second – here – we discussed the critical role that accountable care can play in driving innovation in delivery, payment and quality. In this third installment, we are talking about the outsized role that advanced care plays today from both a cost and patient experience perspective, and how we might change our approach to advanced care.
Henry: You have frequently talked about advanced care as the most important area of health care for the future. Why is that?
Dr. Stuart: Well, let’s start by defining “advanced care.” When we talk about advanced care we are talking about people with one or more chronic diagnoses, who are resistant to treatment and who are experiencing declining function and poor prospects for recovery. People with these kinds of illness are entering a gray zone between treatable and terminal illness. I think we are called to do two things in this world: We absolutely must create a more compassionate and effective approach to delivering care to those who are in this stage of life, and we must begin to understand and better manage the cost of advanced care.
Henry: That makes sense, of course. But how do you manage to talk about “costs” when you are dealing with human suffering and personal tragedy? Doesn’t that come across as being a little cold-hearted?
Dr. Stuart: You are exactly right. The advanced care conversation is a difficult one. Think about this: Advanced illness is not a sexy conversation topic. The quickest way for me to clear the room at a party is to tell people what I do for work. Advanced illness is fraught with emotional baggage. It’s very hard for people to talk about. But, ironically, it’s this very difficulty that makes it prime territory for innovation.
Henry: Before we talk about innovation, talk a little about just how big this advanced care challenge is.
Dr. Stuart: It’s probably bigger than you think, both in terms of human impact and in terms of cost. Let me just hit the high points. Over 25.0 percent of the entire Medicare budget is spent in the last year of patients’ lives. Over 30.0% of this is concentrated in the last month prior to death, and 80.0% of that is in the hospital. In the Medicare population, 5.0% of all beneficiaries account for half of the costs. And a very large portion of this 5.0% is made up of people with advanced illness who are cycling in and out of the hospital. So, in the world of advanced care, we have a substantial increase in expenditures, an increasing burden on Medicare, and a less-than-ideal patient experience. That seems to be an obvious place to start making dramatic changes.
Henry: OK, now I think we’re ready to start talking about innovation! What kind of changes do you see coming in advanced care, and how are those changes going to affect patients?
Dr. Stuart: Let me start where we should all start. We should understand that in advanced care, we are talking about helping people, not patients, get the most out of every minute of life, to support the incredible human capacity to adapt to even the hardest things, to take advantage of the American desire for autonomy. Advanced illness places terrible burdens on people afflicted with it. But even the frailest, sickest senior in a bare-bones slum apartment is not thinking of herself as “sick” or “dying”; she is thinking about living. Our job in advanced care is to support her living needs, at home and in her community.
Henry: OK. That sounds great and right and good. But how do we do this and at the same time begin to deal with a cost model that is spiraling out of control? Can we afford these idealistic goals?
Dr. Stuart: This is the great part about innovations in advanced care. We can both improve the patient’s experience and begin to reduce costs significantly, at the same time. And all that’s really required is a change in perspective, a paradigm shift. There are just a few conceptual barriers between us and significant innovation, and those barriers are all in how we think about advanced care, not what we do in advanced care.
Henry: There’s that paradigm shift thing again. So, you believe that we just need to change how we think about advanced care in order to drive the changes we need?
Dr. Stuart: Very much so. Let’s start with the first barrier. The real problems in advanced illness aren’t medical; they are problems with life. For example, research shows that 75.0% of heart failure readmissions are due to non-medical factors. People lose their prescriptions or can’t afford to get them filled. Others have no idea they should cut back on their salt intake or they’ll get overloaded with fluid. Still others have no one to help them manage their affairs. When their heart failure gets worse and they lose their breath at 4 AM, there’s nowhere to go but back to the ER, and hospital admission follows. An effective, innovative advanced care approach can avoid that by anticipating problems, providing support, and bringing medical treatment to people where they live. Obviously, it’s better for everyone if that crisis never happens.
Henry: This sounds to me like we are talking about the hospital as the problem, that instead of hospitals, we should have more home-based care.
Dr. Stuart: Yes, but let’s be very clear here. It’s not the hospital that’s the problem; the problem is people with chronic or advanced illness going there when they really don’t need to and don’t really want to. It’s going to the hospital at a stage of life when that is precisely the thing you should not be doing.
Henry: But still, everyone does go to the hospital. Why is that and what could we do about it?
Dr. Stuart: The problem here is simple. Many of our clinical and business models in health care are just upside down and the way we deal with advanced illness is more so than many other areas. Let’s look at repeat admissions to the hospital for advanced illness. Surveys show consistently that over 80.0% of seriously ill people would rather be at home near the end of life, not in the hospital. So, a big part of dealing with advanced illness in a more cost-effective and compassionate way is developing models that deliver at-home care, and that help those with chronic illnesses stay out of the hospital and out of recurring treatment cycles. Doing this can have a major impact on the quality and cost of care for the whole population: Quality, because these people want and need support where they live, so programs that supply this support automatically increase their well-being and quality of life. Cost, because our data show that the great majority of people with advanced illness will decide not to go back to the hospital if they are given the means to avoid it. On top of that, there are a couple of bonuses. First, Medicare saves a lot of dollars. Second, ill people have free choice.
Henry: So, we save money, the ill person’s well-being and quality of life is preserved and the choice becomes the individual’s – so no “death panels!” With that in mind, any closing thoughts on advanced care?
Dr. Stuart: Just this. We do not ever have to sacrifice quality of care in service to reducing costs. I strongly believe that real innovation in healthcare delivers a better experience at lower cost — both at the same time. In the end, I think we will find innovation and improvement in the simple notion that healthcare is something that is person to person, human to human, not just a professional fighting disease. I think we have lost that to some degree in modern healthcare, and we need to get it back.
Dr. Brad Stuart is one of those practitioners on the cutting edge of reform. He has more than thirty five years of experience in internal medicine, palliative care and hospice, and is a nationally recognized innovator in healthcare. He has devoted a lifetime of work to improving clinical and economic outcomes in medicine, by focusing on “dignity, choice and responsibility.” He is co-founder and CEO of ACIStrategies. He will be sharing his thoughts on healthcare issues at the upcoming Global Innovation Summit in San Jose, California.
We’re proud to announce a growing list of sponsors for Global Innovation Summit + Week! Microsoft’s Bing is sponsoring “design labs” for prototyping solutions to the hardest global systemic challenges. Our newest sponsor is the United Nations Foundation, which seeks to foster global entrepreneurship. Additional sponsors include the City of San Jose, USAID, e-Estonia, Kauffman Fellows Program, DLA Piper, SVForum, BayBio, Licensing Executives Society (Silicon Valley), and many others.
We are welcoming the world! Attending corporations include General Electric, Oracle, Disney,Mitsubishi, Daimler, Microsoft, Honda, AlcatelLucent, Intuit, SingTel, Qualcomm, Accenture,Swisscom, Telecom Italia, and many others. International executives, entrepreneurs, and policymakers are coming from Nigeria, Colombia, Belgium, Brazil, Estonia, Egypt, Chile, France, Italy, Sweden, Dominican Republic, Peru, Mexico, Malaysia, Saudi Arabia, South Africa, New York, Washington, and more.
THE BIG PICTURE
Why We Start Up Startups
Victor Hwang, CEO of T2 Venture Creation, from Forbes
On the surface, entrepreneurs seem motivated by a desire for money, excitement, purpose or freedom. But there are more profound instincts at work that drive innovation — ones that rely on the same cooperative ability of humans beings that has enabled us to thrive as a species on planet earth. Read more here.
U. S. Healthcare Innovation Demands A Paradigm Shift
Henry Doss, Chief Strategy Officer of T2 Venture Creation, from Forbes
An interview with healthcare advocate Brad Stuart, who takes on the assembly-line approach to medical care that has stifled innovative management models and is ill-fitted to address the rise in chronic diseases. Read more here.
Is the Age of Efficiency over?
When it comes to solving the world’s problems, innovators must shift the focus from efficiency to effectiveness. Read more here.
Moral Obligation in Business Law
The Houston Chronicle
A company’s primary obligation is to maximize profits, right? T2 Venture Creation’s Victor Hwang takes on conventional wisdom, demonstrating the importance of morality in the age of innovation. Read more here.
All Together Now: What Entrepreneurial Ecosystems Need to Flourish
A ‘World Startup Report’ finds similar qualities of trust and social capital among dozens of far-flung innovation ecosystems. Read more here.
THE LATEST NEWS
Washington Area Pops onto Tech Radar as Alternative to Silicon Valley
The Washington Post
The nation’s capital has a lot to offer startups, including predictable workdays, a growing mass of young companies eager to form partnerships, and plenty of raw engineering talent. Read more here.
A Berlin-based e-commerce “clone factory” called Rocket Internet is putting the power of imitation to work in 50 countries around the world. Read more here.
Africa’s Innovative Spirit: Taking on the World
GE’s ‘Innovation Barometer,’ which surveys senior executives around the world, reveals disparate innovation trends among African nations. Read more here.
Study Supports View that Canada Is an Innovation Laggard
The Wall Street Journal
Lack of government support, R&D investment, and risk-taking hurts Canada’s startups. Read more here.
By Gideon Long, BBC, Santiago
From Venezuela’s oil, to copper from Chile, Argentinean soybeans, bananas from Ecuador, Mexican silver, and timber from Brazil – the vast region is blessed with a fabulous array of commodities the world wants and needs.
But Latin America has been less good at exporting ideas. When it comes to entrepreneurship and innovation, the region has a poor record.
While the countries of the Organisation for Economic Co-operation and Development (OECD) spend an average of 2.4% of their gross domestic product (GDP) on research and development, in Chile and Mexico – the only two Latin American members of the club – the figure is 0.4%. In other countries of the region it’s even less.
But this is all starting to change.
“Until recently, entrepreneurship in Peru was a question of survival,” says Gary Urteaga, a Peruvian entrepreneur. “People started their own businesses because they couldn’t get a job. They’d sell sandwiches in the streets and wash cars.
“But now, for the first time, people are choosing to be entrepreneurs. Read more here: