|Innovation and Knowledge Strategies for
Today's Economy: An Interview With Debra M. Amidon
(December 23, 1997)
by Stuart Haggard, U.S. Department of Veterans Affairs
Debra M. Amidon is the author of Innovation Strategy for the Knowledge
Economy: the Ken Awakening, 1997, ISBN 0-7506-9841-1, published by
Butterworth-Heinemann and co-author with David J. Skyrme of the comprehensive report, Creating
a Knowledge-Based Business, 1997, ISBN 1-898-085-27-7, published by Business
Debra is the founder
and President of Entovation International, Ltd.a global consulting network
which links forty-seven countries throughout the world. Debra holds degrees from Boston
University, Columbia University, and MIT where she was an Alfred P. Sloan Fellow.
Stuart Haggard: Debra, first of all thank you for
agreeing to an interview with the Inter-Agency Benchmarking & Best Practices Council
(Council). We are excited to talk with you about innovation and knowledge
strategies, particularly in the context of todays global economy.
Question: Your book, Innovation Strategy for the Knowledge Economy: The Ken
Awakening, seems to stress the importance of innovation as a critical success
factor in global competitiveness. If that were the case, would you please elaborate?
Answer: Most executives agree innovation is a major factor in global
competitiveness. A number of current studies draw, or reach similar conclusions. Peter
Drucker, in a Harvard Business Review (January-February 1995) article entitled
"The Information Executives Truly Need," indicated innovation was the one
competency needed for the future and the ability to measure the performance thereof. It is
that simple and that complex. Innovation, however, should not be described from the
perspective of technology alone. In other words, we are not only talking about
technological innovation, decades of history and a body of literature and research. We are
talking more about the knowledge-based economy. Most prominent are the principles
of knowledge creation, sharing, and application. How innovation relates to economic growth
is the focus more than the technology. The result is a redefined definition of
innovation according to the flow of knowledge.
You mentioned innovation is a critical success factor in global competitiveness. A
critical issues monographCollaboration Innovation and Knowledge Economyis
scheduled for release in mid-January 1998 by the Society of Management Accountants of
Canada. In short, the focus on competition has not created the kind of synergistic,
symbiotic opportunity-based view of the economy. What is needed, is a new orientation from
global competitiveness to global collaboration.
Question: What is your view about the differences, if any, in the structure, roles,
and applications of innovation and knowledge management in public sector versus private
Answer: The management methodology is identical. The management techniques and even
underlying philosophy and principles of practice are the same regardless of the size of
the organization, sector of society, or region of the world. What is different is the
array of competencies brought to bear. Let me try to explain. I spent a number of years in
higher education as a university administrator, time as a government official, and twelve
years at Digital Equipment Corporation as an industrial practitioner. I noted far more
similarities in those three environments than differences. The language may differ, the
focus may differ, but how one manages into the future is virtually the same.
Stuart: Well, Debra that supports the view expressed in a videotape produced by
Price Waterhouse on Best Practices featuring James Burke. In that videotape Mr. Burke
makes a point that the genetic makeup of organizations is 95% the same with
organizations having far more similarities than differences.
Debra: Ten or fifteen years ago, such a comment would have been heresy
becauseindustry, academe, and governmentseemed to have little or no respect or
knowledge of one another. Today, executives realize the unique competencies of other
organizations, and the advantages of collaboration with them. Value lies in combining
competencies toward shared goals. For example, consider the flow of ideas. No longer do
the best ideas reside in the ivory towers. Some of the best ideas come from industry and
government. Where the ideas originate is less important; it is more important what is done
with them. This is why the focus on innovation is permeating all institutionsso this
figure of "95%" is also my experience. It reminds me of a presentation I
attended in which the speaker believed the future belongs to those who can cross
boundaries, organizations, sectors, and regions of the world.
Question: This leads to another question. What are the greatest barriers to
corporate innovation? And what strategies or business practices have proven useful to
overcome such barriers?
Answer: Simply stated the greatest barrier is competition for resources.
When resources are plentifulfinancial, technical or humanmany ideas can bloom.
When competition for resources arises, people withhold ideastreat knowledge as
powerand build barriers and boundaries. With the impact of downsizing on the morale
of individuals and organizational culture, individuals become more competitive at the same
time that collaborative practices are necessary to support successful innovation. That
does not work in a global economy characterized by intensified global competition, the
commoditization of products and services, and increased consumer demands and
For all the good created by a decade of intensified reengineering, there has been a
concurrent effect of people (fearful of losing their jobs) hoarding ideas and the
thwarting of collaboration. What is required is an organizational culture that promotes a
respect for one anothers ideas, values people for their individual contributions to
the whole, and builds trust.
Question: Can innovativeness be taught?
Answer: Some people have the ability to generate more ideas than othersthat
is a simple fact. I even have chronic "ideaphoria"a constant flow of new
ideas and ways of thinking.
Some individuals have this idea generation ability and it can be nurtured. A second group
of people is better at listeningsuperb at knowing how to develop value from others.
Thirdly, there are individuals who are good at exploiting, experienced at selling or
marketing, or experts at discovering the value of knowledge at the point of delivery. The
innovation value system requires the spectrum of expertise.
What concerns me is the way people are defining innovation. They think invention and
innovation are synonymouswhere invention is actually the first stage of the process
of innovation. Another concern I have is the shift toward creativity at the expense of
quality. What is required, of course, is a balance of the two. Perhaps what is needed to
be taught, in addition to critical thinking, is a balanced viewthis
simultaneitythe co-existence of opposites in the system or concept, which was
developed by Mel Horwich of MIT years ago. Innovation by definition balances the quality
with the creativityit balances the operational perspective or short-term with the
strategy formulation or long-term perspectiveit balances profitability with growth.
Stuart: So what I am hearing in part is concern that the human side of
organizations is not getting the proper attention in terms of innovation and creativity?
Debra: Well, it gets even more complicated. The productivity paradox is originally
described as a technology paradoxwhy are we not getting the productivity or economic
benefits from the infusion of significant investments in technology? At Digital Equipment
Corporation, we established the first industrial-strength management systems research
organization in 1988. We created a management architecture. The management architecture
had five (5) components: Performance; Structure; People; Process; and Technology. We
developed those five components based on mathematical modelswhich applied a real
research rigor to the work. But if one simplifies the architecture, one sees that the five
components can be narrowed down or clustered into three: Economic, Behavior, and
Technological. But notice that the behavioral componentwhich includes Structure,
People and Processrepresents three-fifths of the equation. So the productivity
paradox says that we are not getting the economic benefit from the technology because of
the behavior implications. Individuals across multiple disciplines are beginning to
recognize the value in balancing all three (economic, behavioral, and technological). So
the information technology (IT) community is looking at the economic and behavioral
implications. The organizational development and training community is looking at the
economic and technological implications. The economic community is realizing the
intangible value (human assets) of the firm. Companies (e.g., Skandia) are publishing
annual reports to document and track intangible value.
I wish to make one other comment in terms of can "innovativeness" be taught. I
said that effective strategy requires a balanced approach. I believe it is not a matter of
being taught, as much as it is a matter of an environment being created where ideas can
flourish, and applied to increase the profitable growth of the enterprise, the vitality of
a nations economy, and the advancement of society. So three economic levels can
operate simultaneously: enterprise, nation, and society. It is a matter of providing the
infrastructure, respect, the trust, and the imperative to create value from ideas. The
focus is not on training, rather on the environment that supports and fuels learning and
Question: What best practices of knowledge management and corporate
innovation can you share with use as a result of your experience?
Answer: In my collaborative work with David J. Skyrme, our research identified an
emerging set of business practices that leverage knowledge including: knowledge mapping,
knowledge databases, and improvements in knowledge transfer and diffusion. Our work also
identified recurring practices such as: (1) knowledge leadership which includes top level
corporate support and a clear vision of the role of knowledge organizational success; (2)
a clear value proposition of what knowledge is vital to success in key markets; (3) a
knowledge creating and sharing culture; and (4) a well developed technology
infrastructure. These practices collective represent best practices of knowledge
With regard to corporate innovation, the bottom line best practice is that leaders of
corporate innovation are learners and leaders.
Question: What aspects or business practices of corporate innovation seem either
least developed or understood based on your experience?
Answer: As I was alluding, innovationdefined according to the flow of
knowledgeis the language that binds all activities through the value system and
networks the activities of individuals, organizations, sectors, nations, and society. In
the publication by the Society of Management Accountants of Canada, we actually created a
transnational holonomy that connects economic levels into a common vision of innovation. I
believe manufacturing is really innovation with a capital M. The roots of the concept came
from the manufacturing community, but agility actually traverses all the functions of the
organization. The origins of Concurrent Engineering are Innovation with a capital E. The
focus on marketing, sales and services, may be innovation with a capital C, and how one
brings marketing into research is really at innovation from the perspective of the
The CEO sits at the helm of corporate innovation. If no one has responsibility for
managing the cradle to grave innovation process and the flow of knowledge is
left to serendipity, then by default the CEO owns it. Smart CEOs understand the need for
Chief Knowledge Officers and place them strategically in their organizations.
There are excellent examples of CEOs who effectively manage innovation, such as Ray Stata,
Chairman of Analog Devices. Remember what I said about resources becoming scarce with
downsizing, global competition, and the commoditization of products and services.
Competition for resources is absolutely fierce. Functional organizationsengineering,
finance, R&D, manufacturing, sales, ITall develop initiatives competing
with one another when it comes to developing a corporate strategy. When these initiatives
are analyzed, there are far more similarities than differences.The competition for
resources, is not necessarily competition for the economic and technical resources. The
competition is more for access to leadership. So, the CEO should view all the competing
initiatives together as parts of the innovation process.
Stuart: My experience in government has been much the same that is it is very
difficult to get a number of disparate initiatives viewed and treated as being similar or
complimentary as opposed to different. One major initiative of my job involves a
"One-VA" initiative, which represents a rudimentary attempt to bring together a
number of seemingly disparate federal and VA initiatives and reduce redundancies and
leverage resources, which continues to be quite challenging.
Question: The report, Creating the Knowledge-Based Business, which
David J. Skyrme and you recently authored contains a tremendous amount of information on
the subject of knowledge in the context of organizations. What lessons or
information can you share with us as a result of your work?
Answer: Five conclusions come to mind.
First, the momentum of knowledge management is increasing and global. There are about
50 knowledge management conferences scheduled in the next year. Conferences have been held
in Canada, Israel, China, Latin American, and the European Union. The World Bank has a
Chief Knowledge Officer. Individuals and organizations are realizing the importance of
knowledge in their work.
Second, the implications of knowledge management transcend any organizational function,
sector, or geographic region. The community of knowledge managementbrings together
the complementary competencies of diverse perspectives.
Third, the movement is one of intangibles. That does not mean financials are not
important. Organizations appear to be measuring, what is measurablenot necessarily
what needs to be measured. How does one measure the value of interaction, partnerships,
collaboration, and innovation? Old ways of managing will not work in the futurethe
environment is too chaotic. Interactions are more important than before.
Fourth, I would focus on culture. In the report, Creating the Knowledge-Based
Business, almost every case study identified the most difficult initiative as the
establishment of an organizational culture which values and rewards ideas, learning and
Fifth, determining the value and contributions of knowledge are very difficult aspects of
knowledge management. What knowledge is most valuable?
In short, the movement is unleashing significant energy at the level of the individual
level while at the same time providing a sense of same purposeeconomic prosperity.
Question: Several of us on the Council have discussed the possibility of sponsoring
a benchmarking study on innovation since our experience suggests a lack of published
information and knowledge on this subject and the fact that federal agencies are facing
the consequences of the Government Performance and Results Act of 1993 (Public Law 103-62)
which promotes outcome-based performance measures, strategic plans, and program
evaluation. What are your reactions to this and are you aware of any published
benchmarking studies on innovation?
Answer: Well, I am aware of several efforts to track technological
innovationthe OECD for example. I think there are exemplary studies supported by the
University community evidenced in the international participation in the Innovation
Research Center (IRC) and electronic newsletter. In January 1998, McMaster University in
Canada will host the 2nd World Congress on the Management of Intellectual Capital. There
are numerous efforts to track management practices. The American Productivity &
Quality Center (APQC) and Arthur Andersen provide one example. They created the Knowledge
Management Assessment Tool (KMAT). APQC has established a clearinghouse with best
practices on knowledge management which includes hundreds of organizations.
What I have not seen is the interrelationship or infusion between the economics, behavior,
and technology communities. These communities are beginning to converge. I would suggest
the scope of any innovation study be international. I think it should be done with other
organizations. Have I seen a benchmarking study, which includes work with this kind of
scope of innovation and knowledge strategies? No. I certainly would be willing to review
the scope of such a benchmarking study. The results could provide a foundation for the
World Innovation Congress planned for the Worlds Fair in the Year 2000 in Hanover.
One word of caution on a benchmarking study. Benchmarking for the future can be effective.
A benchmarking study that focuses on practices that are not novel, documents existing
practices. What is needed is benchmarking which provides insights to influence emerging or
future practices and establish standards for the World Trade of Ideas.
The views expressed by members of the
Inter-Agency Benchmarking & Best Practices Council do not necessarily represent the
views of the U.S. Department of Veterans Affairs.
referring page: http://www.va.gov/fedsbest/Speakers-Amidon.htm?B1=Amidon+Interview
© Copyright 1998. Used by permission.