Thursday, July 08, 2004

Good Ideas at Raytheon and Big Holes in Our Own Backyard

Good Ideas at Raytheon

Michael Erard of the New York Times wrote a great story in May 2004, “Where to Get a Good Idea: Steal It Outside Your Group.”

The article discusses the work of Ron Burt, noted sociologist at the University of Chicago. Burt has observed that innovation is almost never a “heroic act of creativity.” Instead, innovation is an “import-export game” brokered by people who connect otherwise distinct groups. A mundane idea in one setting can become groundbreaking somewhere else, if just one person recognizes and exploits the “import-export” opportunity. Burt coined the term “structural hole” to describe the gaps between groups where this kind of innovation can occur. Click here for Burt’s full treatment (50-page pdf) of this idea.

Erard writes about Burt’s engagement with Raytheon:

Mr. Burt, whose latest findings will appear in the American Journal of Sociology this fall, studied managers in the supply chain of Raytheon, the large electronics company and military contractor based in Waltham, Mass., where he worked until last year. Mr. Burt asked managers to write down their best ideas about how to improve business operations and then had two executives at the company rate their quality. It turned out that the highest-ranked ideas came from managers who had contacts outside their immediate work group. The reason, Mr. Burt said, is that their contacts span what he calls "structural holes," the gaps between discrete groups of people.

For those of you who want the details, Burt’s paper offers solid statistical evidence to back up this claim, as well as many others. (Want better performance reviews, faster promotions, or a higher salary? Then go start bridging structural holes.)

Structural Holes in Our Own Backyard

To me, the most striking aspect of Burt’s work at Raytheon is that Raytheon did not mention it at last week’s knowledge management seminar.

Burt’s results clearly pertained to the topic at hand. The presenters described their overall mission as improving “the systematic processes that create, capture, share, and reuse knowledge [at Raytheon].” Burt’s results, obtained by studying the Raytheon organization, reveal very strong ties between specific social patterns (namely, bridging structural holes) and exactly these goals.

Considering the hours devoted to explaining Raytheon’s IT efforts, it puzzles me that the dramatic and statistically validated findings of Burt didn’t get a mention. I'm also struck that no one brought it up in the Q&A that followed. Perhaps many in the audience, like myself, didn't know about Burt's results at that time, even though they were written up in the NY Times one month before. Could the same be true of the knowledge management staff at Raytheon?

My guess is that Raytheon's employees do know about Burt's study of their own management team, but that our KM community at large does not typically pay attention to these sociologists. Perhaps Burt is too academic? But we don't need to be PhD sociologists to find ways to apply findings like Burt's. It's good business. See Bill Ives and Adriaan Jooste's comments from a recent KM Cluster for another take on managing people and innovation in the knowledge economy.

In recent months I have grown increasingly involved with a couple sociological organizations that relate closely in my mind to knowledge management (in particular The Mass Bay OD Learning Group and the International Network for Social Network Analysis). I expected to discover a thriving cross-over between these groups and our local KM groups. So far I have found few social connections between them, even at meetings (like Raytheon's) where the topical connections are obvious.

My instinct is to lament this situation. Can't we all get along? But as Ron Burt points out so well, what I really see is not a problem, but an opportunity.

16 comments:

Bruce Hoppe said...

Where to Get a Good Idea:
Steal It Outside Your Group

May 22, 2004
By MICHAEL ERARD

Got a good idea? Now think for a moment where you got it. A sudden spark of inspiration? A memory? A dream?

Most likely, says Ronald S. Burt, a sociologist at the
University of Chicago, it came from someone else who hadn't realized how to use it.

"The usual image of creativity is that it's some sort of genetic gift, some heroic act," Mr. Burt said. "But
creativity is an import-export game. It's not a creation game."

Mr. Burt has spent most of his career studying how
creative, competitive people relate to the rest of the
world, and how ideas move from place to place. Often the value of a good idea, he has found, is not in its origin but in its delivery. His observation will undoubtedly resonate with overlooked novelists, garage inventors and forgotten geniuses who pride themselves on their new ideas but aren't successful in getting them noticed. "Tracing the origin of an idea is an interesting academic exercise, but it's largely irrelevant," Mr. Burt said. "The trick is, can you get an idea which is mundane and well known in one place to another place where people would get value out of it."

Mr. Burt, whose latest findings will appear in the American Journal of Sociology this fall, studied managers in the supply chain of Raytheon, the large electronics company and military contractor based in Waltham, Mass., where he worked until last year. Mr. Burt asked managers to write down their best ideas about how to improve business operations and then had two executives at the company rate their quality. It turned out that the highest-ranked ideas came from managers who had contacts outside their immediate work group. The reason, Mr. Burt said, is that their contacts span what he calls "structural holes," the gaps between discrete groups of people.

"People who live in the intersection of social worlds," Mr. Burt writes, "are at higher risk of having good ideas."

People with cohesive social networks, whether offices,
cliques or industries, tend to think and act the same, he explains. In the long run, this homogeneity deadens
creativity. As Mr. Burt's research has repeatedly shown, people who reach outside their social network not only are often the first to learn about new and useful information, but they are also able to see how different kinds of groups solve similar problems.

Mr. Burt began developing his idea about "structural holes" - the notion that people can find opportunities for creative thinking where there is no social structure - as a graduate student at the University of Chicago in the 1970's. A student of the eminent sociologist James Coleman, he was assigned to study patterns of exchange between companies using a technique called block modeling, which classifies individuals and organizations according to a large amount of data on what they buy, who they know and
more. Structural holes between companies was a theme in his 1977 dissertation and became a focus in his 1992 book, "Structural Holes," which applied it to individual behavior.

In 2000 Mr. Burt took the idea of structural holes to
Raytheon, where he was hired to help integrate a group of recent acquisitions.

What he discovered was that many potentially good ideas
died at the hands of those who brought them. Raytheon
managers had a wide gap between coming up with good ideas and making them happen.

"Although managers with discussion partners in other groups were positioned to spread good ideas across business units," he writes, "the people they cited for idea discussion were overwhelmingly colleagues already close in their informal discussion network." The result was that the ideas were not developed. Instead, he says, they should have had discussions outside their typical contacts, particularly with what calls an informal boss, a person with enough power to be an ally but not an actual supervisor.

Wayne Baker, a professor of management and organization at the University of Michigan Business School, said the
structural holes approach reminds people to continually
open up their networks, which naturally drift toward
closure.

Mr. Burt's theory may offer some caution for people who
have been trying to enlarge their social networks on the Web by using "social software" at sites like Friendster, Ryze and MySpace. The idea underlying these computer hookups is that the better connected you are, the more valuable social capital you will have. But Mr. Burt's work suggests the opposite: expanding your network may fill in the structural holes, eliminating their creative benefits. By linking everyone together indiscriminately, it becomes increasingly difficult to reach outside your regular contacts and surprise anyone with a new idea.

"My M.B.A. students tell me all the time: `Don't
disseminate this. This should be our little secret,' " Mr. Burt said. But he tells them there are more than enough structural holes to go around. The reason? Laziness, mostly. "Often people are like sheep eating grass," Mr. Burt said. "They're so focused on what's right in front of them, they don't look for the whole."

Mr. Baker, who has evaluated thousands of personal social networks with a Web-based tool (www.humaxnetworks.com), argues that neither model offers a formula for success, though. "If there is a rule of thumb in practice," he said, "it is to have a hybrid network that has features of closure and structural holes."

Mr. Burt offers somewhat different advice: "The easiest way to feel creative is to find people who are more ignorant than yourself."

http://www.nytimes.com/2004/05/22/arts/22IDEA.html?ex=1086259131&ei=1&en=6ef1c9e6014fdf17

Copyright 2004 The New York Times Company
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