So let's talk about some keys to innovation. First, once again, this idea that innovators are able to integrate diverse knowledge. So how you can do that? Well, one, as I mentioned before, is establishing effective lines of communication. This might relate to the organizational structure, perhaps having a flat organizational structure, not one with a lot of hierarchy, might be advantageous for being innovative. Creating cross functional teams, bringing people together across units of the organization could be another way of integrating that diverse knowledge. I think central is the vision set forth by the senior leadership of the organization, being able to create a broad vision, creating these shared values and ultimately managing the expectations around innovation is gonna be key to bringing people together. The second thing to think about, motivation and incentives. Once again, what are the incentives to invest in creative search, for example, R&D. How is that organized? How are people incentivized in those types of roles? How can you establish high powered upside incentives? Do your employees and do your innovators share in the wealth created or the value created in an innovation? This might mean giving greater ownership to the managers of the innovation process, allowing them to have the flexibility and the freedom to pursue their innovations. And then finally, we need to encourage risk taking, and one way to do this is by sharing responsibility. At some organizations what they'll do, especially in their R&D functions, is they'll have team members be involved in multiple teams. This has a couple advantages. One, it increases knowledge flow between those teams. And two, it removes the risk that, if I'm only working on one project and it fails, then everything I've been working on was for naught. If I'm working on multiple projects, then if one fails, that's fine, I have my other project that I'm working on. Finally we wanna think about ways to build this absorptive capacity we talked about. This ability to bring in knowledge from outside the organization. There are many reasons to invest in basic and applied research, however, absorptive capacity could be an additional one. Only with that scientific capability will you be able to perhaps assimilate knowledge outside the organization. And it's for this reason that you'll sometimes see organizations making, might even think of radical investments in areas that seem far afield from where they are. Google is famous for making investments in some areas that seem very far away from their core search business, including some around space technology and driver-less vehicles and the like. You wanna reward individuals not only by in terms of financial incentives, but you can also think of what we might call these non-pecuniary incentives, non-financial incentives. For many scientists they have standing outside the firm, they're in a professional community. So allowing those scientists to publish in academic journals and the like, to go to conferences, to share their ideas, can be critical. Now this might go counter to the secrecy that a lot of organizations like to maintain. So how do you maintain and balance the secrecy with the desire to allow others to go out into the world? Almost counter to this, you can often even think of ways in which you might give away key ideas in order to be a player in larger knowledge exchanges. There are companies like IBM who've taken vast parts of their patent portfolio and made them free and accessible to the public. Again, it's part about building this ecosystem so that you have others that might generate ideas that you can then work on to develop innovation yourself. Joint ventures, industrial consortium, these are all different ways in which you can be in the loop. Last but not least, I just wanna hit home this idea again that diversity in all its forms is a great way to increase the innovative capacity of an organization. Once again, only through diverse ideas do you often get the novelty that leads ultimately to innovation.
