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As the global economy has transitioned from an industrial to a knowledge economy, the nature of problems that businesses face has changed as well. That’s why the innovation initiatives of many organizations aren’t as successful as they could be, according to David Weiss and Claude Legrand in their new book, Innovation Intelligence: The Art and Practice of Leading Sustainable Innovation in Your Organization.

As the global economy has transitioned from an industrial to a knowledge economy, the nature of problems that businesses face has changed as well. That’s why the innovation initiatives of many organizations aren’t as successful as they could be, according to David Weiss and Claude Legrand in their new book, Innovative Intelligence: The Art and Practice of Leading Sustainable Innovation in Your Organization.

According to the authors, in the industrial era, business challenges were complicated, but were, for the most part, repeatable problems that could be solved by simplifying them and leveraging existing expertise to solve them. In the knowledge economy, on the other hand, problems are complex – that is, they tend to be more ambiguous and unique. They don’t lend themselves to existing knowledge like problems of the previous era did. That means they need more innovative thinking to be clearly understood.

But the mindset of most senior-level executives is to solve problems quickly, rather than investing time to determine what makes the challenge at hand unique before focusing on potential solutions.

“Many leaders excel at applying their past experiences to resolve complicated issues that need to be simplified and organized. A prototypical example of a complicated problem is a manufacturing process that needs to be simplified so that workers can perform their part of the process more effectively. Many of the processes and procedures in the industrial economy were designed to simplify or streamline complicated problems. In the industrial economy, an efficient organization could be compared to a machine, where consistent processes produced predictable outcomes. As long as the ‘machine’ analogy worked well in the marketplace, this approach was extremely effective.”

“Complex issues need leaders wqho are effective at innovative thinking and who are able to build climates that will foster the use of innovative thinking by everyone. Expertise in a past problem can cause leaders to jump to conclusions and assume that the new complex problem is the same as a past problem. That’s because the leader viewed the complex problem as a complicated one. Instead of focusing on the uniqueness of the complexity, which distinguished it from previous problems, the leader assumed that the problem was not unique, that the ambiguity could be ignored, and that a quick answer that was used before would suffice.”

Examples of complex issues cited by Weiss and Legrand are stakeholder, shareholder or government relations, responding to emerging technologies and non-traditional competitors, understanding changes in customer buying patterns and leading within a diverse cultural and multi-generational workforce.

It almost seems as if Weiss and Legrand believe leaders of traditional companies approach their roles with a fatal conceit:

“Many organizations found that their efforts at innovation did not work well because they ignored the new context (a knowledge vs. industrial-based economy), did not fully understand the problem, and churned out great solutions to the wrong problem. The pervading corporate culture operated under the premise that if they threw enough corporate intelligence at a problem, they would find an answer (emphasis mine); consequently they focused on finding quick answers rather than on questioning the question… Many believed that it was easier and more profitable in the short term to recommend solutions than it was to attempt to unravel the complexity of the problem and prolong the wait for answers.”

Of course, not every problem is exclusively complicated or complex. Nor is there a clear demarcation between industrial and knowledge era business practices and processes. But the authors do shed light on an important development: The ground is shifting under our feet, the old ways are becoming less and less effective and we need to rethink HOW we think in order to be more successful and innovative in the future.

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