Interview with Dr. Chris Bingham about Fostering Innovation
Dr. Chris Bingham is an award-winning professor of Strategy and Entrepreneurship at the Kenan-Flager Business School at the University of North Carolina. Dr. Bingham received his undergraduate accounting degree and MBA from Brigham Young University, and received his PhD in strategy, organizations and entrepreneurship from Stanford University. Currently Dr. Bingham’s focus is the process of accelerated learning in the context of seed accelerators. Dr. Bingham’s complete biography can be found here.
1) You have presented how one can use the Nadler and Tushman’s Congruence Model to foster and/or improve innovation within an organization. Is this more a function of a healthy organization being more innovative, or are there certain aspects specific to the Congruence Model that lend itself to creating an innovative environment within an organization?
There are different components of the Congruence Model, right? You’ve got task, you’ve got structure, you have got people, and you have got culture. And, sometimes, people will tweak this model a little bit, but those are basically the four parts. The whole point is, if one of them is off-kilter, then you can have some problems.
So, I believe in the model. I believe in the congruence. If I were to look at one of the elements that I find the most intriguing, it’s probably structure and here is why: Because I believe the counter-intuitive insight when you’re trying to innovate is that when markets become more dynamic, more ambiguous, often the best strategies are the most simple. And that’s an insight that a lot of people don’t get because what happens over time in organizations is you build up more and more structure – that is, more policies, more rules, more manuals, more routines… what that ultimately does is create inertia. It creates bureaucracy. It makes it difficult to change. Organizations are trying to become more efficient and that’s what the structure does, organizations become efficient but at the expense of flexibility.
So, if you think about a spectrum, you’ve got efficiency on one end and you have got flexibility on the other. There is a natural force pushing firm imperceptibly towards efficiency at the expense of flexibility. And so I think, as leaders, what you have to do – if innovation is key for you – is you’ve got to deliberately pare back structure. I’ve been looking at innovative companies across many different industries, and what you see is they will provide a little bit of structure, but within that structure, there’s a lot of room to adapt. For example, Yahoo, in its early years had a few simple rules shaping their partnerships: (1) don’t do deals if it jeopardizes the user experience, (2) no exclusive deals, and (3) the product or service must be free. Those rules provide some structure and guidance (securing some efficiency), but within those rules there was a lot of room to adapt.
2) You have also stated that there is evidence to suggest a diverse team dynamic promotes an innovative culture (highlighting Under Armour’s Board as an example of this). In addition to simply gaining expertise outside of an organization’s industry, are there other considerations or strategies one can use in building an effective team through diversity?
You can think about diversity from lots of different angles, right? Functional diversity, gender diversity, age diversity. But, I believe the key point here is trying to find people who disagree with you. And that’s a little non-obvious. You want to create task conflict (i.e. when people disagree with you) without creating affective or personal conflict. Task conflict often is helpful because an organization can avoid premature convergence on what might be a suboptimal plan. It keeps you from jumping into things too quickly. Also, studies show task conflict leads to improvement in team decision making effectiveness. And when this works, team decision making effectiveness improves not only satisfaction with the team, but also team performance.
The other question is, how can you find these sort of disagreements naturally occurring within organizations and what do you want to do about it? I think what you want to start looking for is internal disagreements that might come up when you are trying to develop a new service or a new product. Marketing and finance almost always are going to support the status quo because their incentives generally come from knowing the existing product. New innovation presents a risk to their livelihood.
Engineers and R&D folks are often the ones who will be pushing new and disruptive ideas. They are looking for what’s going to be best from a customer perspective and/or from a product perspective. This natural tension is good. Look for those natural disagreements to find balance.
Diversity is also key for brainstorming. A dictum at IDEO is, “Go for quantity” in its brainstorming sessions. So, it’s not untypical in an hour-long brainstorming session at IDEO for them to come up with ~100 different ideas for something. Without this practice guideline what will often happen is the power players in the room are going to get out their ideas first. And, then other players in the organization start conforming. They are going to start saying, “Oh, yeah, that’s a good idea.” Any idea they might have had gets stifled and factions start to form around the power people’s suggestions and you don’t get much further than that. And, then, it becomes just sort of a power game. In contrast, if you can just start saying, “Hey, look. Let’s get out 30 ideas in the next 30 minutes and let’s get 100 ideas in the next hour,” what happens is it quickly becomes more objective. So, you actually depersonalize it by getting high numbers of ideas out there from a diverse group maximizing the organization’s available choices.
3) One way an organization can successfully tap their market for ways to innovate is to ask themselves, “what job is our customers hiring us for?” What are some other key strategies an organization can use to tap their external market for ways to innovate, rather than simply continuing to iterate and improve?
There is an innovator’s series of books: Innovator’s Dilemma, Innovator’s Solution, Innovator’s DNA. There is now a new one out, Innovator’s Method. What I believe these books are missing is an understanding about the social innovator. Not social in the sense of social causes, but in the sense of innovators that tap community. Crowdsourcing is a great example. For example, Monopoly fans voted on Hasbro’s Facebook page to get rid of the old flat iron playing piece and adopt a new cat playing piece instead. Scrabble players vote on which new word to add to the Scrabble dictionary. It is a really powerful channel when an organization taps into its external constituents.
The other thing you’re starting to see, from a social perception, is innovation tournaments. Netflix did this a couple years ago to improve one of their predictive algorithms. My understanding is it was a very diverse team of academics and industry experts that came together for this. You are starting to see more of these innovation tournaments produce some really amazing ideas. Customers prove to be really helpful for insights. They can help you identify problems and solutions in ways that prove difficult for internal resources (for a variety of reasons).
4) It appears that health-related wearables are in the process of “crossing the chasm” and are here to stay. In your opinion, what is important to get right as we move on from early adopters, to catering to the early majority regarding these products?
So I think your question, simply put is, “how can you help the early majority?” In other words, how can you help cross the chasm, right? What do you need to do to help this new market? If you look at innovation diffusion theory, it’s actually a pretty old, well-established theory. We know early adopters are a fairly small group, where the early majority is a bigger category (more than double that of the early adopter group). If you look at differences between early adopters and the early majority, what you will see is the early majority is more pragmatic, a little more cautious, and want some proof of benefit. What they really want is the understanding that this is going to become a social norm, not just a benefit. They want refined technology to improve ease and convenience. They want a lot of stories of the innovation’s effectiveness. An interesting thing that builds on this diffusion model is actually looking at how adoptions occur. And what you’ll find – and this is actually pretty interesting – is in the early years adoption is generally based on mass media, but when you start hitting the early majority, what becomes really critical is adoptions occur more due to interpersonal communication. The social component therefore becomes really critical to get the early majority onboard.
5) The way people consume fitness is changing, especially with regards to modality, delivery, and provider. Michael Porter says a disruptive technology is, “one that would invalidate important competitive advantages.” Now that you have examined the health and wellness landscape, what are some of your predictions about how people will consumer fitness and wellness over the next five to ten years, and what does that mean for traditional health clubs?
I wish I could look into my crystal ball and get a more precise answer for you. There are broad trends that are affecting lots of different industries we can discuss. One key trend is mobility. If you look at the time spent in mobile apps in 2014, it’s gone up 50% from 2013. And that’s crazy, 50% in one year, and most of this is coming from just mobile apps. How does that exactly work for the fitness industry? I’m not quite sure. But, I think ignoring it or assuming that you don’t need to address it is not the right approach. So, I think that’s one very big influence that’s going to affect how people consume fitness and wellness over the next five to ten years.
Another trend is the idea of accessibility and simplicity. Some think of innovation as additive. I’m adding new features, new services, or whatever. Yet some companies like Google are innovating by subtracting things, and pulling things out, and making their product simpler, and more accessible. With Google Docs you don’t get all the features of Word, but you get the most essential ones. I think if you think about these three big trends of mobility, simplicity and accessibility; I think that’s going to really influence the way that people consume fitness and wellness over the coming years.