Innovation butterfly

Last updated

The innovation butterfly is a metaphor that describes how seemingly minor perturbations (disturbances or changes) to project plans in a system connecting markets, demand, product features, and a firm's capabilities can steer the project, or an entire portfolio of projects, down an irreversible path in terms of technology and market evolution.

Contents

Origins

The metaphor was developed by researchers Anderson and Joglekar. [1] It was conceived as a specific instance of the more general 'butterfly effect' encountered in chaos theory.

How it works

The innovation butterfly arises because many innovation systems are made up of a large number of elements that interact with each other via several non-linear feedback loops containing embedded delays, thus constituting a complex system. [2]

Perturbations can come from decisions made within the firm or from those made by its competitors, or they can result from external forces such as government legislation or environmental regulations, or unexpected spikes in the price of oil. How the innovation system evolves as a result of the innovation butterfly can lead ultimately to an innovative firm's success or failure.

Complex systems, in domains such as physics, biology, or sociology, are known to be prone to both path dependence and emergent behavior. What makes the behavior of the innovation butterfly different is market selection, along with biases in individual and group decision making within distributed innovation settings, which may influence the emergent behavior. Furthermore, managers in most fields of business endeavor to reduce uncertainty in order to better manage risk. In innovation settings, however, because success is based upon creativity, managers must actively embrace uncertainty. This leads to a management conundrum because innovation managers and management systems must encourage the potential for a butterfly effect but then must also learn how to cope with its aftermath. [3] [4]

How innovation butterflies are 'chased' is highly managerially relevant. [5] Most butterflies end up 'merely' consuming a considerable amount of time and resources within a project, or for an innovation portfolio, within a firm. However, some butterflies can also unleash regime-altering emergent outcomes within an entire industry segment. [6] Moreover, once these emergent outcomes begin to mature, and in some instances lead to disruptive innovations, they become extremely difficult to manage, [7] Hence, shaping the innovation system before potential innovation butterfly's effects completely emerge is critical. [3]

See also

Related Research Articles

<span class="mw-page-title-main">Butterfly effect</span> Idea that small causes can have large effects

In chaos theory, the butterfly effect is the sensitive dependence on initial conditions in which a small change in one state of a deterministic nonlinear system can result in large differences in a later state.

<span class="mw-page-title-main">Chaos theory</span> Field of mathematics and science based on non-linear systems and initial conditions

Chaos theory is an interdisciplinary area of scientific study and branch of mathematics. It focuses on underlying patterns and deterministic laws of dynamical systems that are highly sensitive to initial conditions. These were once thought to have completely random states of disorder and irregularities. Chaos theory states that within the apparent randomness of chaotic complex systems, there are underlying patterns, interconnection, constant feedback loops, repetition, self-similarity, fractals and self-organization. The butterfly effect, an underlying principle of chaos, describes how a small change in one state of a deterministic nonlinear system can result in large differences in a later state. A metaphor for this behavior is that a butterfly flapping its wings in Brazil can cause a tornado in Texas.

<span class="mw-page-title-main">Emergence</span> Unpredictable phenomenon in complex systems

In philosophy, systems theory, science, and art, emergence occurs when a complex entity has properties or behaviors that its parts do not have on their own, and emerge only when they interact in a wider whole.

<span class="mw-page-title-main">Disruptive innovation</span> Technological change

In business theory, disruptive innovation is innovation that creates a new market and value network or enters at the bottom of an existing market and eventually displaces established market-leading firms, products, and alliances. The term, "disruptive innovation" was popularized by the American academic Clayton Christensen and his collaborators beginning in 1995, but the concept had been previously described in Richard N. Foster's book "Innovation: The Attacker's Advantage" and in the paper Strategic Responses to Technological Threats.

New product development (NPD) or product development in business and engineering covers the complete process of launching a new product to the market. Product development also includes the renewal of an existing product and introducing a product into a new market. A central aspect of NPD is product design. New product development is the realization of a market opportunity by making a product available for purchase. The products developed by an commercial organisation provide the means to generate income.

<span class="mw-page-title-main">Clayton Christensen</span> American academic and business consultant (1952–2020)

Clayton Magleby Christensen was an American academic and business consultant who developed the theory of "disruptive innovation", which has been called the most influential business idea of the early 21st century. Christensen introduced "disruption" in his 1997 book The Innovator's Dilemma, and it led The Economist to term him "the most influential management thinker of his time." He served as the Kim B. Clark Professor of Business Administration at the Harvard Business School (HBS), and was also a leader and writer in the Church of Jesus Christ of Latter-day Saints. He was one of the founders of the Jobs to Be Done development methodology.

An organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aims.

<span class="mw-page-title-main">Emergentism</span> Philosophical belief in emergence

Emergentism is the belief in emergence, particularly as it involves consciousness and the philosophy of mind. A property of a system is said to be emergent if it is a new outcome of some other properties of the system and their interaction, while it is itself different from them. Within the philosophy of science, emergentism is analyzed both as it contrasts with and parallels reductionism. This philosophical theory suggests that higher-level properties and phenomena arise from the interactions and organization of lower-level entities yet are not reducible to these simpler components. It emphasizes the idea that the whole is more than the sum of its parts. Historically, emergentism has significantly influenced various scientific and philosophical ideas, highlighting the complexity and interconnectedness of natural systems.

A complex adaptive system is a system that is complex in that it is a dynamic network of interactions, but the behavior of the ensemble may not be predictable according to the behavior of the components. It is adaptive in that the individual and collective behavior mutate and self-organize corresponding to the change-initiating micro-event or collection of events. It is a "complex macroscopic collection" of relatively "similar and partially connected micro-structures" formed in order to adapt to the changing environment and increase their survivability as a macro-structure. The Complex Adaptive Systems approach builds on replicator dynamics.

There is no agreed definition of value networks. A general definition that subsumes the other definitions is that a value network is a network of roles linked by interactions in which economic entities engage in both tangible and intangible exchanges to achieve economic or social good. This is close to the definition of Verna Allee, see below. Here are a few definitions that provide different perspectives on the general concept of a value network.

Organizational intelligence (OI) is the capability of an organization to comprehend and create knowledge relevant to its purpose; in words, it is the intellectual capacity of the entire organization. With relevant organizational intelligence comes great potential value for companies and organizations to figure out where their strengths and weaknesses lie in responding to change and complexity.

Equifinality is the principle that in open systems a given end state can be reached by many potential means. The term and concept is due to the German Hans Driesch, the developmental biologist, later applied by the Austrian Ludwig von Bertalanffy, the founder of general systems theory, and by William T. Powers, the founder of perceptual control theory. Driesch and von Bertalanffy prefer this term, in contrast to "goal", in describing complex systems' similar or convergent behavior. Powers simply emphasised the flexibility of response, since it emphasizes that the same end state may be achieved via many different paths or trajectories.

<span class="mw-page-title-main">Technology adoption life cycle</span> Sociological model

The technology adoption lifecycle is a sociological model that describes the adoption or acceptance of a new product or innovation, according to the demographic and psychological characteristics of defined adopter groups. The process of adoption over time is typically illustrated as a classical normal distribution or "bell curve". The model calls the first group of people to use a new product "innovators", followed by "early adopters". Next come the "early majority" and "late majority", and the last group to eventually adopt a product are called "laggards" or "phobics". For example, a phobic may only use a cloud service when it is the only remaining method of performing a required task, but the phobic may not have an in-depth technical knowledge of how to use the service.

Michael E. Raynor is a Canadian writer and an expert on business management practices.

<span class="mw-page-title-main">Arie Rip</span> Dutch social scientist and professor

Arie Rip is a Dutch professor emeritus of Philosophy of Science and Technology.

Discovery-driven planning is a planning technique first introduced in a Harvard Business Review article by Rita Gunther McGrath and Ian C. MacMillan in 1995 and subsequently referenced in a number of books and articles. Its main thesis is that when one is operating in arenas with significant amounts of uncertainty, that a different approach applies than is normally used in conventional planning. In conventional planning, the correctness of a plan is generally judged by how close outcomes come to projections. In discovery-driven planning, it is assumed that plan parameters may change as new information is revealed. With conventional planning, it is considered appropriate to fund the entire project, as the expectation is that one can predict a positive outcome. In discovery-driven planning, funds are released based on the accomplishment of key milestones or checkpoints, at which point additional funding can be made available predicated on reasonable expectations for future success. Conventional project management tools, such as stage-gate models or the use of financial tools to assess innovation, have been found to be flawed in that they are not well suited for the uncertainty of innovation-oriented projects

Organizational Information Theory (OIT) is a communication theory, developed by Karl Weick, offering systemic insight into the processing and exchange of information within organizations and among its members. Unlike the past structure-centered theory, OIT focuses on the process of organizing in dynamic, information-rich environments. Given that, it contends that the main activity of organizations is the process of making sense of equivocal information. Organizational members are instrumental to reduce equivocality and achieve sensemaking through some strategies — enactment, selection, and retention of information. With a framework that is interdisciplinary in nature, organizational information theory's desire to eliminate both ambiguity and complexity from workplace messaging builds upon earlier findings from general systems theory and phenomenology.

The Norwegian paradox is a dilemma of Norway's economic performance where economic performance is strong despite low R&D investment.

<i>The Innovators Dilemma</i> 1997 book by Clayton M. Christensen

The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail, first published in 1997, is the best-known work of the Harvard professor and businessman Clayton Christensen. It expands on the concept of disruptive technologies, a term he coined in a 1995 article "Disruptive Technologies: Catching the Wave". It describes how large incumbent companies lose market share by listening to their customers and providing what appears to be the highest-value products, but new companies that serve low-value customers with poorly developed technology can improve that technology incrementally until it is good enough to quickly take market share from established business. Christensen recommends that large companies maintain small, nimble divisions that attempt to replicate this phenomenon internally to avoid being blindsided and overtaken by startup competitors.

Innovation leadership is a philosophy and technique that combines different leadership styles to influence employees to produce creative ideas, products, and services. The key role in the practice of innovation leadership is the innovation leader. Dr. David Gliddon (2006) developed the competency model of innovation leaders and established the concept of innovation leadership at Penn State University.

References

  1. Anderson, E.G. Jr. and Joglekar, N.R. (2007). "Chasing the Innovation Butterfly with 'Systems Thinking'", The Systems Thinker, 18(9): 7–9.
  2. Sterman, J.D. (1994). "Learning in and about Complex Systems", System Dynamics Review, 10(2–3): 291–330.
  3. 1 2 Anderson and Joglekar (2007), pp. 7–9.
  4. Anderson, Edward G and Nitin R. Joglekar. (2012). The Innovation Butterfly: Managing Emergent Opportunities and Risks During Distributed Innovation. Springer (Understanding Complex Systems Series)"
  5. Anderson, Edward G. and Nitin Joglekar (2005). A Hierarchical Modeling Framework for Product Development Planning. Production and Operations Management, 14 (3): 344–361.
  6. Garud, R. and Karnøe, P. 2001 Path Creation as a Process of Mindful Deviation. In Path Dependence and Creation, R. Garud and P. Karnøe (eds.) Lawrence Erlbaum Associates: 1–38.
  7. Christensen, Clayton M. (1997). The Innovator's Dilemma : When New Technologies Cause Great Firms to Fail. Harvard Business Press.

Research literature

Books