The Outsider Effect

Better decisions come from teams that include a “socially distinct newcomer”…someone who is different enough to bump other team member out of their comfort zones (From Kellog School of Management News, Embracing the “socially distinct outsider”)

There are many things that can impede innovation or even drive the innovation train completely off-track. The lack of corporate innovation strategy and executive leadership, the notorious “not invented here” syndrome–those are the usual suspects that are routinely invoked in this context. Recently, I came across of what looked like, quite surprisingly, yet another addition to the list of innovation impediments: innovation consultants. I said “surprisingly” because the item was added by Hutch Carpenter, a Senior Consultant for HYPE Innovation, an innovation consultancy.

Truth be told, Carpenter’s beef with consultants comes from a noble—and in fact quite rational—angle: he argues that when launching innovation programs, many organizations underutilize their most valuable innovation asset, namely, their employees. Instead, outside consultants are hired and put in charge. The result is often a double whammy: innovation programs don’t live up to their high expectations; worse, overpowered with “outsiders,” the employees feel demotivated and demoralized.

While consultants do provide valuable cognitive diversity, argues Carpenter, employees are vastly superior to any outsider in knowing their company’s business: its products, customers, markets and competitors. Besides, they have a strong vested interest in the company’s future, networks of informal relations helping things happen and a pool of pre-existing ideas that can be acted upon. That’s why innovation must be employee-driven, rather than “consultant-led,” as Carpenter calls it.

I do agree with Carpenter’s major point: like revolutions, innovation can’t be imported; any innovation initiative is doomed without active participation of the company’s employees. (This is one of the reasons of why so many organizations fail with Open Innovation: they go outside without establishing first an internal innovation structure.) Yet, if I were to split the proverbial hairs, I’d argue that consultants might be actually better than employees in knowing the company’s competition—just by way of prior work with other players in the field, including the competitors.

Outsiders may have one more advantage over insiders: they’re not exposed, at least initially, to the fumes of internal politics. Having preserved their neutral status, consultants might be better at dealing with internal ideas, judging them on their merits, rather than authorship.

And then, yes, there is this ability to be “socially distinct:” not knowing the ways things “have always been done here” and being “naïve” enough to keep asking stubborn “whys?” when everyone else in the room knows the right way.

I appreciated the magic power of a “naïve” question a few years ago after meeting with a client, a pharmaceutical company. The client wanted to switch from phosphorus-containing detergents they used to clean production vessels to detergents based on organic acids. (Phosphorus-containing compounds, considered environmentally-unfriendly, were increasingly under the regulatory scrutiny. The client knew that sooner or later, the FDA would ban using them; so they wanted to act preventively.) As it often happens, the meeting was organized in haste, and I wasn’t told what exactly the client wanted to discuss. Having assumed that they were planning to brainstorm an optimal composition of a phosphorus-free cleaning solution, I spent flight time reading articles on the topic that I managed to print out before rushing to the airport.

Early next morning, I was sitting in a room with five managers responsible for cleaning manufacturing equipment. Nice breakfast was served, and, judging from my prior experience with this client, exquisite lunch was to follow by noon. After a few-minute small talk, I got down to business:

“So guys, do you want to identify effective phosphorus-free cleaners?”

“No,” responded the gentleman in charge of the meeting on the client side, “there are plenty of commercially available cleaners based on citric acid. We know precisely what we want to use.”

I felt a bit puzzled:

“So, what is the problem?”

“The problem is that there is a strong resistance inside the manufacturing to switching from one cleaner to another. We tried, but it didn’t work.”

Feeling even more puzzled, I asked:

“Who in the company has the authority to make this decision? Have you talked to this person?”

By the deafening silence that followed, I immediately realized that I said something incredibly stupid, inappropriate, offensive, wrong, awful, terrible. My interlocutors exchanged uneasy glances, and the one in charge uttered:

“Well, we don’t actually know…”

Another manager ventured to help his colleague:

“We’ll find out and bring this issue to the table. Perhaps, the situation isn’t as bad as it appears…”

Barely in its 15th minute, the four-hour meeting was over. We chatted for a few more moments, discussing possible next steps, but I knew that this team would not contact me again. (I was correct.) Apparently mindful of the fact that I was deprived of lunch, my hosts paid my cab fare to the airport.

In an hour, I was there doing what professional “outsiders” are so accustomed of doing: waiting for my flight back home.

About Eugene Ivanov

Eugene Ivanov is the Founder of (WoC)2, an innovation consultancy that helps organizations extract maximum value from the wisdom of crowds by coordinated use of internal and external crowdsourcing.
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2 Responses to The Outsider Effect

  1. I agree with Carpenter that employees are often an untapped asset – especially those closest to the frontlines.

    And I agree with you that an independent observer can be a catalyst for a fresh perspective – when they take the time to understand the business rather than “sell” a recycled solution.

    I often hear innovation consultants saying “if only I could get them out of the office”. A neutral territory can be another catalyst for fresh thinking. Add an innovative and creative environment and human resources with no axes to grind or positions to defend and the potential for changemaking is high.

    Everyone needs a sounding board to validate ideas that haven’t been done before. Independent outsiders are more likely to be objective than insiders.

    Here’s what we published today inspired by the US Independence DAy:

    • Thank you very much for the comment and interesting link. I definitely agree with you: insiders vs outsiders shouldn’t be a zero-sum game. Rather, a clever balance of internal knowledge and external spark should be found.

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