Tag Archives: Knowledge Creation

Sometimes failure is an option

The Long of Coming Up Short
[Via HarvardBusiness.org]

Thumbnail image for Whitney Johnson 2.jpgI didn’t take Calculus in high school, and I almost didn’t take Advanced Placement (AP) American History for fear that I wouldn’t get an A. In retrospect, given that I’ve pursued a career in finance, achieving a B in Calculus rather than knowing little to nothing on the topic would have been a decent trade. Yet I was so concerned about getting anything less than an A, which for me was tantamount to an F, that I wouldn’t take the risk.

Fear of failure can be a debilitating trait personally and professionally. According to Dr. Megan Gunnar of the University of Minnesota, an expert on stress and coping in children (as quoted in Mind in the Making, by Ellen Galinsky), we must learn to fail so that we can learn to succeed. She explains, “if you never allow your children to exceed what they can do, how are they going to learn to manage adult life — where a lot of it is managing more than you thought you could manage?” The same is true in the workplace: If we never have the opportunity to exceed what we can do, or think we can do, how will we manage?

When we are doing the work we really want to do, and hoping to triumph professionally, we will likely experience failures, and experience them repeatedly. And we’ll be in good company. According to Columbia University professor Amar V. Bhide, for 90% of all successful new businesses, the strategy the founders initially pursued didn’t lead to the business’s success. Meanwhile, Dr. Fritz Grupe, founder of MyMajors.com, has found that 80% of college-bound students have yet to choose a major, and “50% of those who do declare a major, change majors — with many doing so two and three times during their college years.” That’s a lot of intermediate failures, or at the very least detours, before arriving at success.

One way we practice learning to fail is by institutionalizing opportunities to take on challenges. Singapore has, in part, become one of the world’s leaders in math education because a lesson isn’t complete if the students haven’t been given something they don’t know how to do. In the words of George Polya, a Hungarian mathematician and educator, we need to build processes into our work to find “a way out of difficulty, a way around an obstacle, attaining an aim which is not immediately attainable.”


An important aspect of a resilient organization is the ability to deal with failure. In a complex world with a multitude of difficult problems, success is not always immediately possible. It can take several iterative steps through failure to find the right solution, to gain wisdom.

I’ve written about the DIKW model of Innovation. Data is manipulated by humans to become different forms of information. The interconversion of information produces knowledge, which results in the ability to make a decision. Often this decision may be to recognize that previous attempts were wrong – a failure – and need to be modified, resulting in another iteration of the DIK cycle.

In a resilient company, each iteration drives the organization towards wisdom – the ability to make the correct decision.

Often, a good strategy is to find out the things that do not work – that are successful failures. An example I use in game play is called Bulls and Creots. Trying to guess a four digit number, with correct numbers in the right place called Bulls and correct numbers in the wrong place called Creots.

There are about 4500 possible numbers assuming no repeats and no zero in the first position. It helps to have a system to work through the possibilities in the best possible fashion. However, the most informative answer is to be completely wrong.

Guessing 4 numbers that are not in the answer removes 40% of the possibilities. One failure greatly limits the future possibilities, making it much easier to narrow down on the correct solutions.

I worked at a biotechnology company called Immunex for 16 years. It was a very well-run, innovative company that did a pretty good job accepting failure if well done. It was one of those 90% of businesses that found success at something different from the initial idea.

Too many companies believe that if they only promote those who are always successful, then they will always win. They fail to recognize that sometimes success can be debilitating and that sometimes failure is liberating.

In a complex world, sometimes the path to wisdom requires failure.

Companies as complex systems

networkby jurvetson

Seeing Your Company as a System
[Via Ackoff Center Weblog]

Much-needed guidance on making companies more employee-centered, adaptive, and capable This is an article from Strategy+Business by Andrea Gabor: … No matter how disparate the causes of failure, there is always a common thread: somewhere, somehow, management has let its attention slip…


Many of the failures we have seen over the last few years – the financial industry, the housing industry, the oil industry – have arisen because the organization involved are being run like a ‘machine’ – push lever X to get result Y. A better approach in these complex setting is to view the organization as a living organism – where small changes in initial conditions, coupled with network effects, can result in disparate, somewhat stochastic, outcomes.

We have done a great job over the last century solving the problems that could be attacked with a ‘machine-based’ management approach. What we have left are the really complex problems where a wide variety of levers can be manipulated with often unexpected outcomes.

Few problems involving complex processes can be solved by moving a single lever. One point of attack will not provide a solution. In fact it often create problems elsewhere in the process.

Today’s complex world requires a different approach, one that overcomes the faults of the ‘machine-driven’ management approaches. This article serves as a nice introduction to the works of Russell Ackoff and others that describe a systems-based approach to management.

Key to this approach is a view of employees that seems to be anathema to many:

All the works mentioned in this guide have been linked to higher performance. Yet their focus on the expertise of ordinary employees remains a hard sell in many companies, because it requires an enormous long-term commitment to training and to local control and knowledge sharing.

Moreover, employee-centered systems organizations need to develop trust — between supervisors and employees and among employees who have to work together to understand and improve the system. Making this work takes skillful management. Indeed, many quality improvement efforts in the U.S. failed because they absorbed rigid process guidelines but failed to build in flexibility.

Management approaches utilizing complex systems thinking require a relationship with employees, especially those most directly engaged with complex problems, that few companies seem to be able to foment. Yet those organizations that can accomplish this will be able to successfully deal with much more complex problems than those that can not, producing an advantage that will be hard for ‘machine-based’ thinking to overcome.

Part of what SpreadingScience tries to do is educate organizations about human social networks, helping them understand how to leverage new technologies to identify and empower the people they need in order to solve complex problems. We help them understand how to adapt their tools to make it easier to support a network-driven management style, and allowing the organization to solve a greater range of complex problems.

The companies that can accomplish this will have a selective advantage over those who can not.

New Seminar – You’re not crazy. You are innovative.


I’ve been working on a series of seminars. I hope to announce more of them soon but I have the first one ready.

You’re not crazy. You are innovative. will examine the disruptive innovators in a community. These people are absolutely critical for the introduction of new ideas into an organizations – ideas that could make or break the success of the company.

Yet often these people are seen more for their disruptive activities rather than their innovation. The majority of the community – the people who simply get things done – views disruption negatively because it changes their workflow, making it hard to simply get things done. Doers distrust disruptors.

This seminar will explore how human social networks adapt to change and why the disruptors are so often not listened to. It will demonstrate that the social networks of disruptors and doers look very different and how Web 2.0 tools can be used to identify members in each group.

It will also provide insights into human social networks that can empower disruptors, making it easier for their innovative ideas to traverse a community and have the major impacts that they should.

The next class in Seattle will start soon. I can also provide seminars for groups. If you would like to attend, send us an email.

Where would we be without Apple?

apple by davidgsteadman
Will anyone be able to compete with Apple’s revolutionary iPad?
[Via MacDailyNews]

“If you want to buy a consumer-friendly tablet computer today and you don’t want to purchase Apple’s iPad, you’re pretty much out of luck,” John D. Sutter reports for CNN.


The inability of the computer industry to match what Apple has done over the last 30 years is simply amazing. Apple continues to see where the market is moving and then leaps ahead of its competitors to define the market, rather than simply follow it.

As this post mentions, Jobs and Apple have defined the personal computer interface three and maybe four times – Apple II, Mac, OS X and iPhone/iPad. At each stage, the interaction between the user and the computer became more intuitive and easier.

Apple also defined much of the way computers looked – Apple II, Mac, Powerbook, iMac, iPhone/iPad. Not only have they been largely responsible for how we interact with a computer, they have defined how computers look.

People have been talking about selling tablets for 6 or 7 years. Yet here Apple is again, not only defining the market but selling a ton of the devices, leaving everyone else to try and catch up to something that they really have no clue about.

Why has no one else been able to do that in 6 years? How was Apple able to essentially create a new market?

Apple has always had the unique ability to take something really complex – the creation of a computational device that people can use – and find a way to simplify it. It takes a lot of hard work to accomplish this, but also an ability to manipulate really complex ideas in ways that few organizations are capable of.

Watching other organizations try and define this is like watching blind men describe an elephant – it must be the light weight; it must be the touch screen; it must be the apps. None of them understand how to present a complex device that requires innovation at all stages, not just one.

It requires the creation of an organization that can synthesize large amounts of information and make wise decisions.

Just think what the world would be like if Apple had not existed? I would nominate Jobs for man of the last half century. Not merely because of his individual abilities – which are prodigious – but because he has also been able to leverage the mass creativity of his employees.

One important aspect of all the organizations that Jobs has been associated with is the large number of named individuals that are found in the development of any of the innovations.The names of the Mac developers for Apple are well known. Same at NeXt or at Pixar.

The actual people involved in much of the innovative changes are given their recognition.The Wikipedia article about the Mac lists over 15 people, all with links, who were involved in the development of the computer. The one on the development of Windows lists not a single name.


Read about the days of the development of the Mac and you see a group of wildly creative people solving difficult problems. Read about NeXT, where Jobs experimented with corporate organization as much as he did with computer programming, or simply observe what happened with a company like Pixar, where the creative geniuses were able to create an entirely new art form using computers, leapfrogging ahead of all their competitors.

The ability to take a core group of creative individuals and harness them to an awesome task is not easy. I wrote about this is a series on Synthetic Organizations – Part 1, Part 2 and Part 3.

Marty Baker at Creativity Central broke down some of the principles seen at Pixar and also can be seen at Apple:

Pixar’s Operating Principles can be distilled down to 3 principles.

1. Everyone must have the freedom to communicate with anyone.

2. It must be safe for everyone to offer ideas.

3. We must stay close to innovations happening in the academic community.

In the Innovator’s Dilemma, Clayton Christensen discusses the difficulty organizations have in utilizing disruptive technology in novel ways. The dilemma is that often the same processes that helped make them successful now prevent them from making the leap to a new technology set. See Clay Shirky’s article on the collapse of business models for some examples.

Even when they know that they have to change and even what the changes must be, they almost always fail in making the leap.

That is mainly in the way they are organized, how they are run and the types of communities they represent.

Yet companies that have Steve Jobs organizing them seem to have been able to do this. Apple defined personal computing, it defined the graphic user interface, the laptop, the MP3 player, the smartphone, the tablet computer. Pixar defined computer generated animation.

By creating organizations where innovations are not shuttled through layers of middle management, with each layer sucking the originality out, Jobs has been able to drive disruptive innovations rather than react to them.

The most amazing thing to me is that Apple has succeeded in being a market leader during two separate paradigm shifting market wars – first the graphical user interface wars between Apple vs Microsoft and now the Internet as interface wars between Apple vs Google. Microsoft’s inability to become a major player in the new way of the world is an example of corporations failing to make the leap, of suffering the Innovator’s Dilemma.

Yet Apple is right there, leading the way as the market makes another decision about the future course of computing. Apple may not win but the course it charts drives decisions in ways that no other company of the last half century has.

Now the market must find ways to respond, to be more innovative than Apple.

Without Apple driving the industry to be creative – how in the hell do we keep up with Apple – we would not be where we are today. It makes one wonder where we would be if Jobs had not been forced out at Apple by a sugar-water salesman. We may only just now have gained where we would have been without those 10 lost years.

‘Twitter’ for business

conversation by cliff1066™

Use Microblogging to Increase Productivity
[Via HarvardBusiness.org]

Are you using Twitter to reach your customers and followers? Do you update your status on Facebook several times a day? Maybe you daily ask questions of one of your specialized LinkedIn groups?

You can replicate this experience inside your organization. There are a number of internal solutions that allow employees to share messages and information with each other, including Yammer and Socialtext. Laurence Smith, Vice President of Global Learning & Development at LG Electronics in Seoul, Korea has become an advocate of Yammer as a way to drive greater innovation in the design of the company’s training programs.

Just a few years ago, Smith says, “when we wanted to revise a classroom training program, we would write a survey, send this to all business unit HR leaders around the world, analyze the results and then use this input to design a new pilot.” The total time elapsed was several weeks to several months and often yielded limited feedback.

But today, Smith and his team start a conversation on Yammer and use tags to create a dialogue with employees. One program in the development stage is FSE (Foreign Service Executive) Soft Landing. It’s targeted to managers assigned to a new country who need to understand the local culture and norms.


Companies are beginning to see that microblogging approaches can have real value behind the firewall. They are useful fro rapid information dispersion across a variety of devices as well as providing simple ways for people to carry on ad-hoc discussions.

Socialtext continues to have the greatest number of useful social media tools for corporations. and at a very reasonable price also. By making these conversations explicit, not only can the company leverage the information it can also harness the knowledge of all its employees.

And by having everything time stamped, everyone knows who should get the credit for great new ideas or helpful information.

Maybe because Alan Mullaly actually has built things

ford mustang by stevoarnold

Alan Mulally — Making Ford a Model for the Future
[Via HarvardBusiness.org]

Almost exactly a year ago, I wrote an article about why Ford has the potential to become a company of the future. It had just come off reporting a $14.6 billion loss for 2008, its fourth losing year in a row.

One year later, Ford reported a profit of $2.7 billion. Yesterday the company reported March sales up 40 percent. GM, by contrast, was up 22 per cent, and Chrysler was down 8.3 per cent.

There are many reasons Ford has achieved such an extraordinary turnaround since Alan Mulally took over as CEO in 2006. After observing him in action, talking with him and spending time with his senior team, I’m convinced Mulally is taking an old-school industrial company and turning it into a model of how a modern company ought to be run.


Perhaps because Mulally is an engineer who actually built things at Boeing, rather than just a sales/marketing MBA, he has a firm understanding of how to get people to do creative things, even at an automobile manufacturer.

Innovation, and the creativity that drives it, does not come from short term metrics and 9-5 mentalities. Mulally had a huge influence on Boeing’s success against Airbus and is now doing something similar with Ford.

I wrote about some of these approaches before. It looks like Mulally has continued on this path.

Some we have heard before. ‘Rally around a mission.’ ‘Long-term strategic planning.’ ‘Be fearless.’

All great aphorisms but execution is what makes them work. Observe how he creates a culture of truth-telling and transparency:

Finally, Mulally has created a culture in which telling the truth, however painful it may be, gets rewarded. Every Thursday morning, he presides over what he calls a “Business Plan Review.” The heads of Ford’s four profit centers around the world and its 12 functional gather to report on how well they’re meeting their targets and on any problems they’re having. They’re all in together.

To broaden transparency, Mulally invites outside guests to sit in on the meeting each week. The day I was there, one Ford executive described a significant shortfall on a key projection. No one cringed, including Mulally, and the executive calmly outlined his suggested solutions. Then he invited others to share their ideas.

Not only does he have everyone in it together and makes sure his own approach of finding solutions to problems, not blame, but he includes outsiders with no ax to grind or domain to defend. These observers provide a perspective that keeps the focus on finding answers.

And I bet they often ask naive questions that can sometimes explode into creative ideas.

I think that they have a great chance to adapt to the changing markets in ways others can not.

Watch the video with the original narrator

How to start a movement: Derek Sivers on TED.com
[Via ED | TEDBlog]

With help from some surprising footage, Derek Sivers explains how movements really get started. (Hint: it takes two.) (Recorded at TED2010, February 2010 in Long Beach, CA. Duration: 3:10)

Watch Derek Sivers’ talk on TED.com, where you can download this TEDTalk, rate it, comment on it and find other talks and performances from our archive of 600+ TEDTalks.


I talked about this a few weeks ago. well, it turns out the Derek Silvers gave a TED talk in February and here it is. So you can see the actual fellow who put the video together.

A very informative three minutes.

My Op/Ed in Xconomy

petri dish by kaibara87

The opinion piece I wrote for Xconomy has been published. Luke Timmerman asked me on Monday to examine the bill and the sections that impacted the Biotechnology industry. I had not even realized there were parts of the huge healthcare reform bill.

I started writing on Monday evening and got Luke my version by about 1 PM on Tuesday (I had to take my car to the shop for its 15,000 checkup or I would have been done sooner). Luke had some edits and it was ready by early evening.

Everything was done using online technologies. Even 5 years ago it would have been hard to put this all together in such a short time. I essentially started from zero on the specifics (I mean how many people have actually read any of the healthcare reform bill itself?), educated myself rapidly, used my background of 25 years in the industry to form an opinion and composed the piece. I then carried on a ‘conversation’ with Luke to get it into final shape.

I found the relevant parts using Open Congress’s interface, which allows you to link to specific paragraphs, as well as leave comments. It presents a unique way for citizens to interact with the legislation that our Congress is working on. Not only are there links to every piece of information one may want, there are also links to news stories, and other facts (Like the Senate version has over 400,000 words.)

Without this web site, it would have been very difficult to even find the sections dealing with biotechnology, much less try to understand them, It was very easy to search for the relevant sections and get an understanding of what they really said. I read a few articles online to get some other viewpoints and then wrote my opinion of the sections.

The fact that the biotechnology industry now gets 12 years of market exclusivity for its products, several years longer than for the small molecule drugs sold by pharmaceutical companies, is really a pretty big deal.

There has been uncertainty for several years over this time frame, with the FTC feeling there should be little or no market exclusivity outside of the patent time frame to the industry’s organization, BIO, which wanted at least 12 years without regard of patent considerations.

Not knowing just how long a time period a new biologic might be free of competition can have a large effect on determining which therapeutics make it to the market place. Now those who model the value of a product have much surer time frames to work with.

I do not think the bill is as friendly to those companies hoping to create ‘generic’ biologics called biosimilars. While it does delineate a path to government approval, the legislation does not make it easy. There are some substantial costs for getting approval of these products. They may not be very much cheaper than the original therapeutic itself. and they do not get any real exclusivity for their products in the end.

For many possible follow-on biologics it will simply be too expensive to take them to market. The large costs incurred while doing this will also make it harder for them to take market share away from a biologic, which has had 12 years of unfettered ability to market itself and its positive results to the customers. at least market share based on cost.

And, as I read the section dealing with patent issues, I became even more aware of the hard road for these follow-on generics. In order to get patent issues dealt with before the follow-on biologic is marketed, the patent holders/licensees of the original drug must be furnished the same information that is submitted in the application to the FDA – the results of clinical trials, assays to determine the follow-on biologic’s potency, stability, etc.

It seems to me that this could open up all sorts of shenanigans. And it appears to be more than regular generics have to do. From what I could determine, a company hoping for approval of a generic simply has to provide the patent numbers that cover the drug it is proposing to market. I could find nothing to indicate that it must turn over all the data of the generic to its direct competitor before going to market.

How many companies will be willing to provide their direct competitor with all the information present in its application to the FDA? It seems to me a place where some mischief could occur.

Now, I did not have time to review the complete history of these sections. I’m sure I could find all the committee testimonies on these parts. Perhaps someone out there has more detailed information. I’d love to pull an Emily Litella and say “Never Mind.”

So, this bill settled something really important for the biotech industry and, while bringing some clarity to the idea of biosimlars, also introduced some possible complications.

I have to say it was fun to use the power of the Web to investigate the issue and form some opinions. Using technology to move information around faster is part of what SpreadingScience does.

Doers, mediators and disruptors

network by Arenamontanus

On self determination
[Via Seth’s Blog]

I posted this eight years ago (!) but a reader asked for an encore.

…are we stuck in High School?

I had two brushes with higher education this week.

The first was at a speech I gave in New York. There were several Harvard Business School students there, invited because of their interest in marketing and exceptional promise (that’s what I was told… I think they came because they had heard that Maury Rubin would make a great lunch!).

Anyway, they asked for my advice in finding marketing jobs. When I shared my views (go to a small company, work for the CEO, get a job where you actually get to make mistakes and do something) one woman professed to agree with me, but then explained, “But those companies don’t interview on campus.”

Those companies don’t interview on campus. Hmmm. She has just spent $100,000 in cash and another $150,000 in opportunity cost to get an MBA, but…


I’ll discuss this in greater detail later but I wanted to discuss a little why the young woman replied the way she did.

We have a probably seen this figure graphing the number of people that adopt a new workflow or innovation as a function of time:


A small number of people chose the innovation rapidly, while the majority takes much longer. Part of the problem Seth describes arises because, that in my experience, many of the people in MBA schools have come from the middle of the figure, while someone like Seth comes from the earlier segments.

It turns out that people in each of these segments often exhibit a defined pattern of behavior.

The majority in the middle (67% of the total) are doers. They are the ones who get things done. They follow a workflow that generates positive results and see it to the end. They are process-driven and the backbone of any successful venture. If things do not get done, if details are not taken care of, then failure usually results.

Doers are justifiably resistant to change. Change can slow down the workflow. It can introduce a process that has not been proven to produce positive results. They hate anything that does not have a defined metric for success.They want proof it will work before changing. That is why they are in the middle.

The small percentage of innovators are disruptors, bringing change to the rest of the community. They are always finding new things that work, often after experimenting with many that do not. And they are always telling the doers that they are doing things wrong, that there are better ways to accomplish a task and generally disrupting the workflows of the doers.

These two groups are absolutely necessary for a successful organization. But they are often in opposition, with the disruptors upset that no one will do anything they say and the doers upset with the disruption that comes from change.

The critical people in a community, and the ones that actually are often in very short supply, are the so-called early adopters. They happen do be unique people who can listen to the ideas of the disruptors and translate them into processes that the doers can accept. These mediators are often well trusted by both communities because of their abilities to let just enough vital change through to the community to allow things to get done better while slowing down those things that would disrupt successful operations.

So, a doer with an MBA is going to follow procedures that have worked well in the past – campus interviews. Being focussed on current processes, it is not likely that she would have been able to accomplish novel approaches on her own. And, if somehow she met a CEO of a small company at a party, she would most likely not have been attracted to his proposal to come work for him.

But an excellent mediator, such as Seth, will explain to her how to use some of the ideas he has seen work well – small company, make mistakes. Now, it is much more likely that given the opportunity to work at a small company, she will actually consider it.

The manner by which change traverses a community seems to follow a very common framework. In many cases, the reason useful change does not get used by a community is that the ideas of the disruptors can not get to the doers. Because there are often not enough mediators.

One of the great innovations of online technologies is that they leverage the reach of a small number of mediators, allowing them to have a much greater effect than in an Industrial world. Thus a community without enough mediators to be successful 50 years ago can, by properly using Web 2.0 techniques, make those mediators much more influential. This will enhance the rate that innovations traverses the company.

Getting news in the mobile connected world

So, I’m driving to the nearby Barnes and Noble to use their Wifi and get some work done. Plus I get a discount on their coffee. I get a voicemail on my iPhone from my Mom saying she hopes I’m not in downtown Seattle, that it looks like a real mess.

Not having a clue to what she was talking about, I checked Google News. I found a couple of articles like this one, about a man wandering around near the Courthouse with some sort of device on his arm. The police has him in custody and were examining the device.

Then I ran across this article which quoted a Police tweet about the incident:

In a tweet, Seattle police said, “Adult male in 300 block of James has made general threats against persons and property. He has taped an unknown device to his left hand.”

Whoa. I had not thought about that at all. You can follow the whole incident on their Twitter page! Here is a picture of the description so far:

seattle pd twitter

Jeez. They have a picture of the device online already! Who would have really thought 5 years ago that information about something like this could not only be readily available but that organizations, such as the police, would be on the front lines of providing it. we no longer need to wait for the evening newscast or the paper the next day to get informed.

And as I finish this, the Twitter feed states that the downtown streets have been reopened.