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May 5, 2006
Creation Nets and information flows
John Hagel and John Seely Brown (authors of the important book on innovation and business strategy - The Only Sustainable Edge) are working on a new concept called creation nets. As Hagel explains in his blog -
Edge Perspectives with John Hagel: Creation Nets, creation nets are:
forms of open innovation that involve sustained relationships across large numbers of participants collaborating together to create new knowledge across traditional institutional boundaries. These are much more demanding forms of open innovation, but they offer much greater potential for both rapid incremental innovation and breakthrough innovation than the more limited forms of open innovation that seem to be the focus of much media and pundit attention.
. . .
There’s a lot of talk about product innovation and there is some attention to process innovation and business model innovation. But most executives do not fully understand the institutional innovation that explains the emergence and growth of creation nets.
As they acknowledge, this is not necessarily an entirely new idea:
We’ll no doubt encounter some criticism for introducing a new label - creation nets - when there are already a lot of buzz words competing for attention - innovation networks, innovation ecosystems, open innovation, value networks, social networks, etc. We hesitated to introduce yet another term to the innovation brew, but we became convinced that the other terms have been used too broadly and too loosely to be helpful in focusing on the elements that have greatest potential to drive innovation - sustained and rich relationships, large numbers of participants across traditional institutional boundaries and distinctive governance mechanisms to focus and integrate diverse innovation initiatives.
I think the concept is worth pursuing, for one important point: it focuses on flows of information. Most other concepts think about the innovations themselves. Or they assume that the flows of information will just happen spontaneously.
Unfortunately, much of the coverage of open innovation tends to emphasize self-organizing and emergent behavior, leaving executives with the impression that there is nothing that can be done to shape or focus efforts in this arena. While creation nets critically depend on emergent practices for their success, we found that these creation nets display an interesting blend of managed and emergent activity. By understanding the management techniques that contribute to the success of creation nets, executives in fact can shape the direction of creation nets and generate and capture more value from these networks.
Hagel and Seely Brown's work has been on capabilities and flows. As they point out in the more detailed white paper Creation Nets:
Stocks of knowledge become progressively less valuable while flows of knowledge - the relationships that can help to generate new knowledge - become more and more valuable. Rather than jealously protecting existing stocks of knowledge, institutions need to offer their own knowledge as a way to encourage others to share their knowledge and help to accelerate new knowledge building.
If we could just get people involved in re-writing the patent laws and the strong IP rights crowd to understand this key point, we might come up with an IPR regime that facilitates innovation rather than threatening to block it.
Another point they make about the flow of knowledge (which, again, has been made before) is key:
Now, of course, knowledge does not “flow” - it tends to be, in fact, very “sticky”, especially outside very narrowly defined communities of practice. Unlike information which can be more readily codified and disseminated, knowledge tends to reside in individuals and it is very context specific. For this reason, knowledge sharing typically requires trust-based relationships and a sharing of practice. Arms length market transactions work great when existing products or codified information are at stake; they are much less useful in accessing, valuing and leveraging knowledge. Knowledge-sharing is amplified when these relationships are grounded in some form of collaborative creation effort. Knowledge-sharing and shared understanding become even more effective when participants come together on a regular basis to undertake new collaborative creation efforts. Thus, creation nets, with their focus on building long-term relationships around sustained collaborative creation efforts and concrete action points, become very powerful vehicles for the catalyzing and participating in flows of knowledge.
This stickiness of knowledge is something that is not reflected in our technology and education policies - which tend to be built upon the transmission of codified knowledge. There is some tacit understanding of tacit knowledge in the process - as reflected in the emphasis on face-to-face interactions in some programs, such as mentoring programs. But the entire "book learning" system of education and the linear model of innovation (where information is passed off from one stage of development to another) are based on this free flow of codified knowledge.
By better understanding how knowledge is created and flows (or does not flow), as exemplified in how these creation nets work, we may be able to craft better build policy to facilitate their operations. That would be a big step forward in our innovation policy.
Posted by Ken Jarboe at May 5, 2006 8:58 AM
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