Change Papers: A shared effort to change North Carolina's climate for innovation.

As Bob Dylan warned us ‘the times, they are a-changing.’ They keep changing. And change is hard. Uncertain. Messy.

Changing to an innovation-based economy will be really hard for North Carolina. The only thing that would be harder would be to watch what happens if we don’t change.

Here’s what the Harvard Business Review said in its July/August 2009 issue, in an article identifying The 10 Trends You Have To Watch:

We … see signs of new forces emerging … The overall picture is of an altered business landscape. It does seem there will be no going back to the pre-crisis world.

If there’s no going back to the old business landscape, where does the business world start retooling, rebuilding, rethinking how it does business? How can North Carolina minimize the difficulty of this change for its citizens?

Thankfully, there are two emerging trends that offer hope. North Carolina is well positioned to benefit from both— design thinking and open source. Two of today’s most influential management thinkers — Roger Martin and Gary Hamel — write extensively on these trends.

Design Thinking

Roger Martin is a great advocate of design thinking. Here’s how he describes it:

Great design is characterized by a deep understanding of the user, creative resolution of tensions, collaborative prototyping and continuous modification and enhancement of ideas and solutions.

Martin calls this type of thinking integrative thinking and he believes the fundamental design principles can be applied to a wide range of business models:

Whether the goal is to develop new products or services, create new ways of marketing to customers or reinvent an entire business model, ‘design thinking’ helps get bigger ideas, faster and more efficiently. We believe the mindset and methods behind great design are the same ingredients for successful business design.

What would design thinking look like in action in your business?

• Share as much data as possible with your entire organization and encourage every employee and team to use that data to challenge long-held strategic assumptions;
• Encourage, celebrate and reward wild ideas— especially some that fail;
• Allow everyone in the organization to see how decisions are made;
• Prototype and test ideas quickly in the marketplace— allow real results to determine success or failure;
• Recognize and reward managers and leaders who set their people free to innovate and grow;
• Recognize that fear and control drive non-collaborative, ‘owner-centric’ behavior; don’t use it; don’t reward it;
• When you need to act— act, but do not threaten;
• Recognize that busy work is not necessarily productive work, and productive work often looks like play.
• Stop rewarding agenda-driven non-collaborators; ban the devil’s advocate

Open Source

Gary Hamel writes about open source beyond the software development model many associate with the term. Hamel believes this broader view of open source is the best way for today’s organizations to discover new ways to compete.

At the recent World Economic Forum he reviewed the changes business has undergone over the past century and notes that organizations of the 19th century were focused on answering a fundamentally Industrial Age question: “How do you turn free-thinking human beings into semi-programmable robots?”

But in a world where food can be grown and stuff can be made almost anywhere and, increasingly where routine problems can be solved almost anywhere, the question today’s businesses should be asking is much different according to Hamel: “How do we increase our creative capacity?” Or, one might suggest, how do you turn semi-programmable robots back into free-thinking human beings?

Hamel argues that 21st century companies employ 20th century models for operation procedures, logistics and supply chain, but continue to implement 19th century management models. In previous writings he has noted that most business leaders live in a paradigm that accepts certain ‘archaic’ beliefs— beliefs that Hamel says must be changed if these leaders hope to compete in the 21st century.

Among these beliefs are:

• the assumption that someone has to take responsibility for exercising power;
• the belief that task specialization is at the heart of good organizational design; and
• the belief that there is a right way to do things and that people are more efficient when they are on autopilot.

“People treated in this manner,” Hamel warns, “can not and will not be capable of innovation.”

These trends — design thinking and open source — go hand in hand. Design thinking is a disciplined, creative approach to change. When done right, it is inclusive and collaborative, and driven, not by agendas, but by transparent problem-solving tools and techniques.

Open source is, simply stated, a beautiful way to scale design thinking efforts. Open source involves the non-exploitive building and nurturing of a community of participants who help solve problems, create new ideas and, in many cases, prototype, test and execute those ideas. Open source builds a passionate, creative culture of authentic meritocracy. It eliminates waste, drives productivity and creates powerful new value. North Carolina should quickly begin to embrace and adopt the ideas of Roger Martin, Gary Hamel and the many other business thinkers who are writing extensively on more creative business models, new models of leadership and more community-driven innovative approaches. Thankfully, we can learn from our own resources.

North Carolina’s soil is rich with successful examples of innovative business models and leaders for this new age. The world’s leading open source company— Red Hat— is located in our capital city. Red Hat chairman Matthew Szulik won the national Ernst & Young’s Entrepreneur of the Year award for 2008. Roger Martin profiled Lulu owner Bob Young in his book The Opposable Mind. Gary Hamel presents Charlotte-based steel maker Nucor as a case study on open source management techniques. Dean Marvin Malecha and professor Meredith Davis at the NC State College of Design are nationally recognized for their writings and research on design thinking.

North Carolina has the tradition and the resources. But we have to embrace new models. And encourage challenges to some long-held, strategic assumptions. June Carter Cash sang, ‘time’s a-wasting.’ She and Dylan were both right. It’s time we get to it.

Tags: creative capacity, design thinking, Gary Hamel, Marvin Malecha, Matthew Szulik, Meredith Davis, open source, Roger Martin, share