strategy+business is published by PwC Strategy& LLC.
or, sign in with:
strategy and business
 / Spring 2012 / Issue 66(originally published by Booz & Company)


How to Make a Region Innovative

The Right Organizational Climate

Because entrepreneurs are generally open to organizational reform and opposed to unproductive bureaucracy, clusters can and should become seedbeds for organizational innovation. A successful quad system needs organizations that are willing to continually reform themselves, and to collaborate on building the cluster’s capabilities as a whole, spreading good management practice from one organization to another. Infosys, for example, has created and spread a variety of distinctive new management approaches, including internal networks that seek out ideas. The company provides a variety of rewards — peer recognition as well as money — to employees for such proposals. Some entrepreneurially minded people within the organization are put on a fast track for promotion as a result. This practice, unusual for India at the time it was launched, has spread to other companies in Bangalore.

Sometimes the spread of management innovation takes place through explicit contracts: “If we work together, then you will have to make changes so that we can collaborate effectively and efficiently.” Sometimes it happens more informally, as managers and executives copy ideas and approaches on the fly from their fellow quad members. It may also occur through formalized communication: In Washington, D.C., the Government-University-Industry Research Roundtable of the National Research Council seeks out best practices for public–private–university partnerships, sharing them with its members and distributing them widely to interested parties.

Managerial innovation also spreads through funding institutions — either government-based like the U.S. National Science Foundation or nonprofit philanthropies — which increasingly require grantees to create partnerships across sector boundaries. University researchers, for example, may be asked to work with local communities, the private sector, and the media. This in turn requires these organizations to recruit (and learn from) people with special skills and experience in partnering with different kinds of institutions. In this way, organizations that are not familiar with management reform — including many government agencies and universities — discover that there are better ways to make the most of their people and processes.

Investment in Individuals

Sustained innovation flows from the ideas and actions of creative, capable individuals. They are especially critical to innovative clusters. In my interviews with quad leaders — senior executives and startup entrepreneurs alike — the same skills, talents, and attitudes are repeatedly mentioned. People who can combine them, and put them into action, are essential for the success of a cluster. These attributes include:

Synthesis. People need to “connect the dots,” making the relevant context of a complex issue clear so everyone can move forward.

Perspective. For sustained collaboration, people must analyze and understand the economic and social environment — the “human ecosystem” — in which the quad operates.

Communication skills. Working across sector boundaries, collaborators must negotiate with and convince others, building pro-innovation coalitions that can be mobilized for worthwhile goals.

Intellectual curiosity. People must be passionate about exploring questions and alternative solutions together, making decisions with urgency but also with an eye to the long term.

Empathy. Those working closely together need the unshakable willingness to listen to and understand others’ point of view, even when that means operating outside their comfort zone.

Substantive knowledge. For those engaged in technical innovation, superior levels of specialized knowledge are essential — and when combined with the other skills and attitudes, they allow people to act strategically.

Cross-sector experience. A successful quad cluster will feature many people with experience well beyond their own silo, preferably in a different country or economic sector. This is one positive side effect of the “revolving door” phenomenon, in which people can move from one firm to another. The wider the range of experiences, the deeper the empathy and the more finely honed an individual’s skills of cross-border communication and negotiation are likely to be.

Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store


Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.