Improvised Innovation

I’ve just been reading a new book by William Duggan, a professor who teaches business strategy at Columbia Business School. The book, Strategic Intuition, argues that the best innovation comes through improvisation, not through advance planning. It’s called “opportunistic innovation”: instead of planning and setting advance goals, sit back and watch for opportunities. When you spot a chance for a big payoff for a low investment, then set your goals and go for it. Duggan provides a wealth of historical examples, showing that each breakthrough innovation resulted from this kind of improvisational responsiveness.

This is fascinating because it’s exactly the opposite of the conventional wisdom that you find in business advice books (or even college commencement speeches): set big goals, then do what it takes to reach them. Bill Gates’s Harvard commencement speech in 2007 told students to do exactly this.

One interesting implication of Duggan’s book is that although businesses innovate opportunistically, governments and international agencies always try the “set big goals first” strategy. Of course, the voters demand solutions to specific problems, and it’s the job of governments to respond. But then, they end up rigidly pursuing the fixed goals, and the bureaucracy prevents them from responding improvisationally to new opportunities.

It doesn’t have to be that way. Duggan tells the story of how Muhammed Yunus developed microcredit (small loans to individual businesses at low interest rates). He started out by trying to relieve poverty in Bangladesh by increasing crop yields. And while he was doing his part to contribute to the Green Revolution of the 1970s, he noticed that landless women were making hand crafted items, but making almost no money because to purchase the materials, they were forced to use local lenders who charged outrageous fees like ten percent each day.

We need a lot fewer big goals and grand plans, and more leaders who are capable of responding improvisationally.

A quotation I just found:

“The real accomplishment of modern science and technology comes in taking ordinary men, informing them narrowly and deeply and then, through appropriate organization, arranging to have their knowledge combined with that of other specialized but equally ordinary men. This dispenses with the need for genius.”

By John Kenneth Galbraith, Harvard economist and advisor to Presidents Kennedy and Johnson, in his 1967 book The New Industrial State (pp. 60-61).

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