Small business: too busy for business. But not for Fool's Gold.

Funny thing about the early, way-early prospectors in the American West. They wrote home exclaiming "Gold! It's just laying there on the ground! A man could wake up poor, take a stroll, and be a millionaire by suppertime if his pockets were big enough!"

That was then; 1848 then. Two years later, you had to know how to dig. And you had to know where to dig. And then deeper. And for what. Via Aside InnovationBlog comes: MIT Tech-Edu

MIT Professors Study InnovationInnovation has become an all-purpose tonic, the default prescription for every pain associated with the retrenching American economy. Whatever the problem -- slower growth, global competition, fewer well-paying jobs -- innovating, we are told, is the solution.

Now a pair of MIT professors has dissected the practice of innovating and found it to be generally misunderstood. In "Innovation: The Missing Dimension", published by Harvard University Press in October, Richard K. Lester and Michael J. Piore argue that much of the innovation effort in American business goes into solving problems but relatively little into identifying possibilities and opportunities in the marketplace.

"We are in danger of learning the wrong lessons about innovation," Lester and Piore warn in the book. "As a result, we risk neglecting those capabilities that are the real wellsprings of creativity in the US economy -- the capacity to integrate across organizational, intellectual, and cultural boundaries, the capacity to experiment, and the habits of thought that allow us to make sense of radically ambiguous situations and move forward in the face of uncertainty."

Haven't seen the book yet, but I like the sound of it.

Seems like it really is James Burke week here-- thinking about the future through the prism of the past and all that. Since we work (and proudly, fiercely so) with many companies that don't have the cash to bring in the big shovels like McKinsey, Accenture, IDEO et al, we help 'em learn how to dig for themselves. Hey, why should the big dogs have all the fun?

Having been both client and consultant on the innovation end, it's not a stretch to say that "thinking big" is a huge leap for many 'smaller' outfits. That's a tragedy. A big one. Too often, small companies do not give themselves credit enough to think they can be really great. Or, they think "innovation" has to come in a giant gilt box, accompanied by fireworks. And, that it requires a Brinks truck.

Ptosh. Money's over-rated. It makes you boring and lazy. It gives you excuses usually, and plausible deniability often. And maybe, a buffer downstream. Maybe. Just maybe. But what if you don't have cash? Yet, you have plenty of ambition? Mountains of it? Well, chances are, you've learned that if you don't have money, you'd better be brilliant in your poverty as we say around here. In this way, "small" is freeing and mid-cap is beautiful. Because you can think with your own brain, not the one your industry says you have to use. You can be yourself, not the persona that typical "industry-leader" or "premier-provider" -speak drives you to.

But.

But, absent money, you have to think. Hard. And wide. And deep. But you gotta see the value in it. You gotta wanna. And sometimes, the only time we wanna is when we've gotta. When there's no other choice.

A graphic (right click "view image" for bigger)....



As the graphic says, sometimes we just get out of phase. We look to get all expansive and optimistic, simply because we're flush with cash, like those early miners, but not--key point--but not because we have a damn profound business model we love, and others--consumers and employees--also love, and therefore deserves to have millions and billions sunk into it.

'Lipstick on a pig' is the term, I believe.

Strange but true fact: In business, money is wallpaper and excuse. We argue over cost-per-copy on those 50 new laser printers costing the organization, say, $75,000 in acquisition, plus $75,000 in consumables per annum. But we wizards in the boardroom choose to move the HQ across town because we saw somebody else's building that fronted a lake--with ducks! Why are we moving? Because our peple can't stop fighting with each other. Isn't it obvious? We need a new building.

Don't laugh. That's a real example. Hey, it happens. We forget why we do what we do, and what's important and neat about who we are. As one of those famous McKinsey guys, Kenichi Ohmae, has said:

Most people in big companies have forgotten how to invent. they know how to buy and sell businesses and produce me-too products... They're too worried about competition and market share and profitability figures.

Guys like Kaiser Permanente need to have IDEO come in and remind them that -- gee whiz -- they're in the compassion business, not "healthcare delivery." Krispy Kreme has a true "software" IPO, and forgets that it is sinfully delicious, fresh, warm glazed doughnuts that are what they do. Instead, they start reading the financial pages. Next thing you know the boss is front page news for sugar-coating quarterly numbers. There are all kinds of implications from the above kind of a-phasic, arythmic dilemma. Enthusiasm is the first victim. Then we begin shopping for an "appropriate" identity. (This is where I usually meet business-people.) Roles take the place of resourcefulness and willingness. Opportunity--"what if"--gets defined as a "distraction." Mistakes get amplified way out proportion. Competitors seem more capable than they really are. We feel more surrounded, clueless and inept than we really should. The chips just aren't falling, the "sky" is, and people are eyeballing the exits. And you can smell the anxiety in the air. ..

One of the cruelest things about organizations today is that they hold executives to standards of rationality, clarity, and foresight that are unobtainable. Most leaders can't meet such standards because they're only human, facing a huge amount of unpredictability and all the fallible analyses that we have in this world. Unfortunately, the result is that many executives feel they just can't measure up. That triggers a vicious psychological circle: Managers have rotten experiences because they keep coming up short, which reinforces low self-esteem. In the end, they get completely demoralized and don't contribute what they actually could - and otherwise would.

Karl E. Weick,
University of Michigan Business School at Ann Arbor
Managing the Unexpected (2001)

Ouch.

Okay, there's not much you do about "standards of rationality." There are some clearheaded people in this world, and then there are some who call the fire department if you turn the lights out.

But "clarity, and foresight that are unobtainable"? No. Wrong. At least, as presented.

If I can be so presumptuous, and I'm way out of my league, here--but Karl, you are wrong on this small part --- even a 10% improvement in the context of our work, our central purpose, yields large benefit. Clarity is not simplicity or perfection, just a better understanding of the cycles of our businesses.

And it's not about ducks. More on this later.