Space + Trust = Innovation

As I am really into simplistic and poorly thought-out statements, I'm here to offer up another...

Some 30 years ago Peter Drucker suggested that within the work of a company, only Innovation and Marketing create Value for a company, and that everything else is a cost. (I+M=V). (Sorry HR, Operations, Finance, etc... we now have machines that do that stuff, take a break and check up on that 401K).

I'm inclined to subscribe to Drucker's formula, and thus my cheeky S+T=I. That is, if Innovation is that important, where does it come from. There are many opinions about this, and some are more useful than others. From my research and experience, organizations that are deeply successful at innovating (whether that be product/service innovation, business-model innovation, experience innovation, or process innovation) are rich in two resources: Space and Trust.

Space

Where we work matters! The built environments in which we work not only enable communication and collaboration, they are enactments of our 'starting values,' that is, the assumptions that an organization holds about how important communication and collaboration are in the first place. In the current issue of I.D. (Industrial Design Magazine), the editors present the 40 most creative design studios in the world, and I've decided that I'd like to work for all 40 of them before I die. These spaces breath with imagination and possibility. Similarly, look at the slide show in the Business Week article on coworking, Where the Coffee Shop Meets the Cubicle, which has pictures of the physical spaces where many coworking communities now gather. Again... Wow! I want to work there too!

Trust

The second part of the formula is trust. Why don't more large firms (like IBM and Intel, which have remote working arrangements) allow their employees to work remotely (from home, coffee shops, coworking spaces, Taos, wherever)? Because they don't trust their people. This reflects one if not two things. First, these firms are lousy at recruiting. They might want to blame their decision not to trust their people on the people, but they hired those people... So shut the fuck up and figure out how to recruit people you can trust. Secondly, they rarely want to even hear what their employees have to say...

Contrast this with BMW, one of the world's most innovative and creative companies. In the article, BMW's Dream Factory, we learn how ALL employees and even interns have the chance to weigh in on large design decisions at the company. It is not uncommon for an intern, scheduled to be at the company for only 6 months, to submit a design concept on a car that actually gets integrated into the final design. The idea here: If you trust your people, innovative ideas and designs can come from anywhere, and your chances of generating lots of fresh ideas increase exponentially.

Alas

This is rarely the case. While there are ample cases of companies that drive trust deep into their organizations and as a result outcompete (financially) virtually all of their peer-firms (W.L.Gore and Semco), most managers in most companies simply can't or won't trust people in this way. Why?

On the surface the reasons given point to matters of efficiency and the bottom line, etc., but those are red herrings. The facts say otherwise. Those firms that travel down the road of radical trust and transparency most often win with respect to the financial metrics that milk-toast middle/senior managers say they value. So, if they are not protecting a better way of doing business and generating wealth, then what are they protecting? It would seem that what is being walled off and protected is not a superior way of doing business, per se, but rather a particular sense of order—cultural, social, economic—in which it is very clear where people sit in relation to each other (hierachy and all that).

So... here's to the inefficiencies of well-maintained order!

Hope

Fortunately, there is hope. Bandit turned us on (just last night), in his Note to Self, to the cultural pioneers at The Hedonistic Company, and now I want to work there. Their notion of a Digital Bohemia is in many ways what we are tapping into here at Not an MBA. Coworkers, developers, designers, innovators of all stripes. We seek out cool, creative and imaginative spaces to do our work, in high-trust contexts, and get on with the I+M=V part of the equation.

Enough for a Sunday morning.

The Butcher