Two words that kill innovation

Data and analytics have their roles and their benefits, but they have a dark side too, and when managers don’t see that, they accidentally kill innovation

As American philosopher Charles Sanders Peirce (pictured) pointed out it is not possible to prove analytically that a new idea is a good one in advance. Photo: Wikipedia
As American philosopher Charles Sanders Peirce (pictured) pointed out it is not possible to prove analytically that a new idea is a good one in advance. Photo: Wikipedia

Over the past 50 years, management practices have become ever more scientific and quantitative. Managing by the numbers, using business analytics and leveraging Big Data are all considered to be unalloyed goods, indicative of enlightened management. Without question, data and analytics have their roles and their benefits. But they have a really important dark side too, and when managers don’t see that dark side, they accidentally kill innovation.

The implicit logic behind the scientific management doctrine is that you must prove—analytically, and in advance—that a decision is correct before making it. To be clear, it is not the explicit doctrine—few managers think this themselves, but they’re swayed by their training to be scientifically analytical. This works productively for most of their everyday decisions. They analyse the pattern of sales per square foot in their stores and make the bottom quartile stores look more like the top quartile stores. They analyse their warehousing costs and shift the locations of their hubs. They analyse their assembly line and optimize the throughput. But when genuine innovation is required, there’s a problem.

As the clever early 20th century American pragmatist philosopher Charles Sanders Peirce pointed out—not about business, but about the world in general—it is not possible to prove analytically that a new idea is a good one in advance. Why? It’s pretty simple when you think about it. There is no data about how a genuinely new idea will interact with the world in advance of said new idea actually interacting with the world. Therefore, there is no way to prove it will work in advance.

This creates a real problem for managers who believe that their job in life is to make sure that a decision should be made only when there is analytical proof that it is the right decision. It causes them to ask for something that cannot be delivered. When an innovator comes to them with an idea, they say, “Prove it”. These are the two managerial words that are most deadly to innovation.

The great irony is that the managers who give this instruction—prove it before I agree to do it—think that they are simply being rigorous managers. They are sure that any innovation problem has nothing to do with them. Rather, it’s the people they’re managing who aren’t executing properly on their innovation programme.

They are oblivious to the fact that they are setting a standard that’s impossible to meet. They will complain about their organizations failing to come up with “compelling innovations”. They will hire innovation consultants to bring “new thinking” to the organization—but later declare that the consultants haven’t brought any “winning concepts”.

But the fact is that it’s the managers who are the problem. When they utter the words prove it, they kill innovation while doing exactly what they think they should be doing. It is very sad to watch. The innovators throw up their hands because they know in their hearts that the only way to prove an innovative idea in advance is to make it un-innovative. The managers who cause the problem spend their time looking for culprits other than themselves.

To change this dynamic, managers need to distinguish between when they are honing and refining an existing system and when they are attempting to create something genuinely new. In the former situations, it is totally fine to come in with analytical guns blazing. In the latter, they need to put away the guns and take an entirely different approach. Here, they need to borrow from the design thinking toolbox by engaging in prototyping. Try innovative ideas, but do so in small ways without a lot of upfront investment. Generate data through experimentation rather than assuming that there is pre-existing data to be harvested. Iterative experimentation will migrate the solution to an ever more compelling state—and spin off new data along the way.

In this way, the modern manager can be both analytical and innovative, leading innovation rather than accidentally squelching it.

Roger Martin is Premier’s Chair in Productivity and Competitiveness and academic director of the Martin Prosperity Institute at the Rotman School of Management at the University of Toronto in Canada.

©2014/Harvard Business Review

More From Livemint