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August 12, 2005

When "ROI" means Return on Insight

Best quote of the week comes from Thomas Davenport, director of research for the executive education program at Babson College, who was interviewed by CIO Insight magazine:

The only way we can get people to use knowledge on the job is to understand how they do their jobs, and then figure out some way to inject knowledge into the course of their day-to-day work, not make it a separate thing [they] have to consult when [they] need knowledge.

In this lengthy interview, Davenport also leaves us with the ironic thought that this might be pretty difficult to do for knowledge workers (!) because so often knowledge workers don't expose or formalize the process(es) that they use to get their work done.

Well, that's gotta hurt. As a group, knowledgeworkers are these days tagged as the source of innovations that are the source of business growth. Growth is good, yes? So...

Setting aside the alchemy of k-worker production, we can still always say that the rate at which innovations prove to drive growth is a performance measure, and the resource efficiency with which k-workers produce effective innovations is another performance measure.

But certainly there can be innovations that, regardless of how efficiently produced, prove not to be growth drivers; and there can be innovations that were "produced" outside of any intentionality other than ultimately acknowledging the effectiveness of something unexpected.

This reminds me to bring up Post-It Notes and Silly Putty, two famous accidents that luckily got seen in a different way, were trademarked (or something just as fierce; please take notice), and went on to revolutionize work and play. They exemplify one of the three types of innovation:

- new solution to new problem;
- new solution to old problem; or,
- old solution to new problem.

But which one? What's so interesting about deciding which type of innovation they represent is that it depends on who the customer was. Let's face it, for some people, being able to temporarily copy a comic strip and bounce the copy across the floor had never been a problem. For them, the discovery of the gooey means to do so was... enlightening? Aggravating? Confusing? I found it Compelling, almost shocking, as did my fellow fourth graders.

Thanks to some guy with insight, when the accidental putty was christened "Silly" and re-purposed, it became an innovation instead of sunk cost. How do we assess the "productivity" of that sequence?

Effort of all kinds involves on the one hand the intended vs. unintended, and on the other hand the expected vs. unexpected. What are the possible outcomes? We actually have names for them that are already pretty conventional:

- Intended and Expected: product
- Intended and Unexpected: experiment
- Unintended and Expected: risk
- Unintended and Unexpected: accident

In hindsight, the lab work that failed its purpose yet output the putty dubbed Silly could be called "research" (experimentation); while in foresight, the intent to "salvage" value from the putty could be called "development" (production)!

Knowledge that was contributing to (or at least consumed by) the research is one thing; knowledge that drove realization of the market potential of the re-purposed putty is quite another. The labwork methodology was likely pretty well prescribed, in an explicit way. The likely tacit and intuitive method of recognizing "Silly Putty" might simply not be practically proceduralized. Is this difference one of being mechanical versus organic? Scientific versus artistic? And/or other dimensions?

This inspires me to list key touchpoints in a dynamic that might account for both the "failed" labwork and the "successful" marketing vision:

inspiration -> improvisation -> insight -> innovation

Inspiration: much of this comes from observation, experience and especially memory; deciding to see or think about something in a certain way.

Improvisation: this is very much like exploration and especially testing, whether it be conceptually and logically as with "thought experiments", or instead materially as in the lab; designing the relationships indicated within the inspiration.

Insight: this is very much like comparison and analysis, especially inference; understanding the implications of the improvisation.

Innovation: on a practical level, this is very much like categorization and especially contextualization; finally deciding what to do with the insight.

In considering modes of injecting knowledge into the "process" of knowledge work, we need to be willing and able to respect the difference between a dynamic and a process. The most important difference is that:

- a dynamic is the behavior of a network of simultaneous influences, whereas

- a process is typically and essentially linear even if it is able to contain detours, shortcuts and sideroads along the way.

It does makes sense that a dynamic can generate a pattern of behaviors that we might finally describe as a process if the pattern is recurring -- or more to the point, intentionally repeatable. But, it might be that the problem of increasing "productivity" in knowledge work is to feed information into the touchpoints of the dynamic in an effectively influential way, rather than to shoot for a process that might not exist.

Posted by Malcolm Ryder at August 12, 2005 4:26 PM

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