The way I see it, there are three primary ways to make money in business models that are built around information-based assets – aggregating, filtering and connecting. Previously, I have discussed aggregating and filtering in some detail – now it’s time to think about connecting. In a recent post on the Harvard Business Review Editors’ Blog, Jeff Dyer and Hal Gregersen discuss some research that they have done looking at how innovators think. They studies over 3,000 creative executives and summarise their findings by identifying five characteristics of innovative individuals:
The first skill is what we call “associating.” It’s a cognitive skill that allows creative people to make connections across seemingly unrelated questions, problems, or ideas. The second skill is questioning — an ability to ask “what if”, “why”, and “why not” questions that challenge the status quo and open up the bigger picture. The third is the ability to closely observe details, particularly the details of people’s behavior. Another skill is the ability to experiment — the people we studied are always trying on new experiences and exploring new worlds. And finally, they are really good at networking with smart people who have little in common with them, but from whom they can learn.
These are all basically connecting skills. The ability to link ideas together, often from disparate sources, is a central skill that is required in innovative enterprises. Hal Varian, of Cal Berkeley and Google, has this to say on the topic:
We’re in the middle of a period that I refer to as a period of “combinatorial innovation.” So if you look historically, you’ll find periods in history where there would be the availability of a different component parts that innovators could combine or recombine to create new inventions. In the 1800s, it was interchangeable parts. In 1920, it was electronics. In the 1970s, it was integrated circuits.
Now what we see is a period where you have Internet components, where you have software, protocols, languages, and capabilities to combine these component parts in ways that create totally new innovations. The great thing about the current period is that component parts are all bits. That means you never run out of them. You can reproduce them, you can duplicate them, you can spread them around the world, and you can have thousands and tens of thousands of innovators combining or recombining the same component parts to create new innovation. So there’s no shortage. There are no inventory delays. It’s a situation where the components are available for everyone, and so we get this tremendous burst of innovation that we’re seeing.
This is important for a couple of reasons. The first is that while I often discount the importance of idea generation relative to that of execution, ideas are still an important part of the innovation process. Consequently, organisations need to have strategies in place that enable them to make novel, interesting connections. A central part of this then is hiring people with skills in this area. Jeffery Phillips discusses the HBR post and he fears that many firms actually block or discourage these characteristics of innovators. He includes five questions that you might ask if you are trying to actively build teams of people with these skills. Here are a couple of them:
What’s your first reaction when someone offers up a new idea? If the response is to explore it further or build on it, ask for examples. Otherwise, next question.
Give an example from your personal or professional life of something new you’ve taken on. Could be learning a new language, learning a musical instrument. Need evidence of the attempt, and persistence. Quitting after a week or so isn’t good enough.
In summary, connecting is an essential skill in innovation. I think that it will benefit firms to think about connecting explicitly in their hiring practices and strategy development. If you are trying to be more innovative, it’s a good place to start.