A sober look at drinking and creativity

Posted on March 9, 2021 by Eugene Ivanov

In one of my prior lives, I was a researcher in a Russian academic lab. A colleague of mine was studying the effects of ethanol alcohol on yeast cells. Every time she presented project updates to the rest of the lab, an atmosphere of joy would fill the meeting room. Regardless of the results, folks would smile, giggle, and drop witty notes, which in turn triggered a new round of smiling and giggling. At the end of each presentation, another colleague would always ask the same question: “Did you try brandy instead?” A burst of laughter would follow.

I suspect that my previous posts addressing the connection between alcohol and human creativity resulted in the same smiling and giggling, however muffled by the restraints of the social media channels. And I almost heard a sound of suppressed laugh by Alison Beard, a senior editor of HBR, when she interviewed, in 2018, with Prof. Andrew Jarosz of Mississippi State University who led a study of the effects of alcohol consumption on creativity.

Compare this frivolous attitude with a stern academic tone of another HBR article, published in 2017, that studied the effects on creativity of 10 minutes of mindfulness meditation. The authors concluded their article by providing a 10-step, “do-it-yourself” guidance to conducting mindfulness meditation sessions. Can one imagine an article on the effects of alcohol on creativity that would conclude with providing a step-by-step instruction to fixing a drink?

I also suspect that such a humorous perception of the topic is a reason of a discernible pause in the academic research on chemically induced ways to influence human creativity. For example, a 2017 study attempted to systematically review all published (by that time) articles that focused on the relationship between psychoactive substances and creativity/creative artistic process. A total of only 19(!) studies were identified that met inclusion criteria. Little surprise that the results were difficult to summarize because of different study designs, diverse methods used, and various substances examined. A conclusion of the review, nevertheless, was that an association between creativity and substance use did exist.

As I argued before, alcohol represents a convenient experimental model to study chemically induced ways to affect human creativity. As opposed to many narcotics or drugs, ethyl alcohol is a simple chemical molecule, whose behavior in the body is reasonably well studied. Using this model, researchers may start identifying specific neurochemical reactions in the brain that are responsible for creativity.

My preliminary review of the corresponding academic literature allows to make two basic conclusions. First, moderate doses of alcohol (resulting in a blood alcohol content of approximately .075, i.e., just below the U.S. legal limit) did improve creating problem solving in affected individuals. Second, alcohol did not influence performance on measures unrelated to creative problem solving, suggesting that alcohol influenced specifically creative performance.  

One article attracted my attention. It is widely accepted that the creative process goes through four distinct stages:

  • Preparation. At this stage, your brain is gathering information.
  • Incubation. It is at this stage that you let your mind wander around.
  • Illumination. This is “eureka!” moment. Connections in your brain collide, and you realize that you got an idea.
  • Verification. Your critical thinking skills return at this stage, and you start “packaging” your newly born idea in a consumable way.

Back in 2011, Torsten Norlander of Karlstad University in Sweden showed that alcohol consumption specifically stimulated the incubation and illumination stages of the creative process but inhibited its preparation and verification stages. This seems to be exactly what Prof. Jarosz’s team observed a year later: intoxicated individuals who solved more creative problems in less time that the control (sober) group perceived their solutions as the result of a sudden insight. Eureka, in other words.

Taken together, the data aligns with Prof. Jarosz’s hypothesis that people under the influence are more susceptible to so-called mind wandering, which results in losing some focus but gaining instead the ability to see a “bigger picture.” This effect, of course, can be harmful in many situations requiring concentration but it might be helpful in others where the ability to connect the proverbial dots is more important than the ability to collect them.

One can further hypothesize that creativity improves when an individual is capable of engaging additional, dormant before parts of the brain in the creative process. It is tempting to take one more step and speculate that the outcome of the creative process can be dramatically improved by the engagement of not just additional parts of a single brain but of additional brains of multiple, previously unengaged individuals. This is what happens when we use crowdsourcing: engaging multiple brains instead of one.

I will return to this idea in my following posts.

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: https://www.dailyartmagazine.com/drunk-absinthe/

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Prohibition, disrupted networks, and innovation

Posted on February 26, 2021 by Eugene Ivanov

The best answer to the question “Do government regulations hurt innovation?” seems to be “It depends.”

The suspicions against regulations are fueled by wide-spread belief that they damage economic growth, with which innovation is intimately connected. Yet, academic research on the topic paints much more nuanced picture. For example, several studies show that corporate innovation is fostered by laws that limit firms’ ability to discharge their employees at will. This phenomenon is called an insurance effect: feeling increased protection from negative consequences of failure, employees are more committed to engaging in risky innovative projects.

However, there is a shining example of a massive government regulation that had profound negative effect on innovation: Prohibition in the United States in 1920-1933. In a brilliant 2020 paper, “Bar Talk: Informal Social Interactions, Alcohol Prohibition, and Invention,” Michael Andrews provides a detailed description of what happened when a government action abruptly intervened in the established pattern of people-to-people interactions. 

Prohibition and patents

Before the passage of federal prohibition, states and counties could determine for themselves whether or not to allow alcohol consumption in bars and saloons. When federal prohibition went into effect, counties that were previously wet saw an 8-18% drop in patenting relative to consistently dry counties in the same state.

As a former researcher, I admire the rigorous checks Andrews applies to prove that the observed effects were caused by preventing people from going to bars rather than by other factors. For example, he shows that the drop in patenting was smaller for groups that did not typically attend saloons, such as women and ethnic groups that preferred to drink in private.

More importantly, Andrews presents evidence that prohibition did not appreciably reduce the total alcohol consumption in newly dry counties (surprise!). And this leads to Andrew’s major point: the negative effect of prohibition on invention was caused not by preventing people from drinking alcohol, but by disrupting natural social networks.  

Prohibition and disrupted networks

Prohibition presents itself as a particularly useful model to study the role of social networks in innovation. Prior to prohibition, the saloons acted as a social hub in which individuals could exchange information in an informal setting. Prohibition is so useful to studying the effects of social interactions on innovation because it disrupted the structure of social networks but not its scale or the identities of the individuals within the network.

In my opinion, one of the study’s findings carries special weight. If networks facilitated invention by simply making it easier for individuals to find collaborators, then only patents with multiple inventors would have declined. Instead, Andrews found that solo-inventor patents declined as well. That means that networks serve not only to bring people together but also as a venue to exchange ideas between them. 

COVID-19 and innovation

Andrews’s study is especially important considering massive disruption of global innovation network caused by the COVID-19 pandemic. Like prohibition, the pandemic did not change the scale or the identity of the individuals within the network. But by massive shifting to remote work (to “drinking from home,” so to speak), it disrupted informal interactions, and we can only guess about the long-term consequences of this disruption.

Following the initial euphoria over the fact that remote work did not result in the immediate end of the corporate world, voices of caution and concern might be already heard. In particular, experts warn that online communication are characterized by lower information sharing—and that means reduced exchange of ideas between innovators, a major factor in prohibition-induced patenting slump. To believe that this will not affect innovation in some negative way in the future is to be a techno-optimist on steroids.

Innovation and post-COVID

There is one more finding in Andrews’s study that deserves mentioning. While patenting fell dramatically in the years immediately after the prohibition onset, it rebounded over time, meaning that affected individuals gradually rebuilt their informal social networks.

Interestingly, however, when folks began rebuilding their social networks after prohibition, they did not collaborate with the same individuals as they did in the past. Instead, they connected with new people in new ways, being exposed to different ideas as a result. This was manifested in a long-lasting change in the types of inventions these individuals created, as measured by patent classes. In other words, while the rate of innovation will restore over time following disruption, the direction of innovation may change.

Sure, innovation will recover post-COVID. But it will be different innovation. Will we like it more? Less?

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: http://www.reddit.com/r/reddeadredemption/comments/9w5ehq/you_can_shutdown_the_saloon/

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Innovation and spirit. Yes, that spirit.

Posted on February 16, 2021 by Eugene Ivanov

Recent evidence strongly suggests that the U.S. is facing a growing shortage of novel ideas. Worse, the cost of getting these ideas is growing while their quality seems to be declining. Left unchanged, this trend may have serious negative consequences for American innovation.

One of the possible approaches to reversing this trend could be strengthening the ideation process by stimulating creativity. In a recent post, I described a study showing that creativity could be boosted by moderate procrastination. The authors of the study argued that moderate procrastination sets in motion a mechanism of problem restructuring, which results in the production of more out-of-the-box ideas.

Promoting procrastination, however moderate, goes against the established cultural norms that force us to always stay (or at least pretend to be) busy. What the scientific data seems to be telling instead is that treating our brain with occasional spells of a quiet, unrushed deliberation may make us more creative.

Another way to stimulate creativity—while, again, going against multiple social boos and taboos–might be to consume moderate amounts of alcohol. This seemingly fancy (and even offensive to many) idea stems from a scientific study described in a 2018 article in Harvard Business Review. The authors of the study treated a group of men aged 21-30 to a vodka/cranberry juice mix in three drinks over a 30-minute period until their blood alcohol level reached near legal intoxication level (0.075). Then they were given a series of word association problems to solve.

The result? Tipsy subjects solved 13% to 20% more problems—and did it faster–than their sober peers in the control group. The authors of the study hypothesized that people under the influence were more susceptible to so-called mind wandering, which results in losing some focus but gaining instead the ability to see a “bigger picture.” This effect, of course, can be harmful in many situations requiring concentration but it might be helpful in others where the ability to connect the proverbial dots is needed more than the ability to focus on a single dot.

I like this study for one simple reason. Ethyl alcohol, as opposed to many narcotics or drugs, is a simple chemical molecule, whose behavior in the human body is quite well understood. Using this relatively simple model, researchers may start identifying specific neurochemical reactions in the brain that are responsible for creativity.

It turns out that the benefits of alcohol consumption may extend to our social life—all despite the widely-held assumption that drinking causes serious social problems. A study conducted back in 2006 found that self-reported drinkers earned 10-14% more than abstainers. Moreover, males who frequented bars at least once per month—so-called social drinkers–earned an additional 7% on top of the 10-14% drinkers’ premium.

The authors of this study hypothesized that the factor leading to higher earnings by drinking people was their increased social capital. Wikipedia defines social capital as “the networks of relationships among people who live and work in a particular society, enabling that society to function effectively.” To me, the key word in this definition is “networks.” Social drinkers might be more successful because they form and maintain networks with other folks—and do this better than non-drinkers.

A 2019 study linked alcohol-consumption-based social networks (and their disruption) to innovation. After the imposition of state-level alcohol prohibition in the U.S. in 1920-1933, previously wet counties had 8-18% fewer patents per year relative to consistently dry counties. The effect was largest in the first three years after the imposition of prohibition and rebounded thereafter. The author attributes this effect to the disruption of existing social interactions and subsequent formation of new, non-alcohol-based ones.

I suspect that when the final tally of the effects of the COVID-19 pandemic on innovation is tabulated, we’ll be shocked by the results, by the damage that the Lockdown of the Century has caused to our ability to generate new products and business models. Sure, disrupted networks will be eventually restored but how shall we make up for the irreversible loss of human interactions over the past year?

But I don’t want to end this piece on a sour note. A national survey in September 2020 found that American adults have increased their consumption of alcohol during the pandemic: the overall frequency of alcohol consumption increased by 14% among adults over age 30, compared to the same time last year. Who knows, a spike in creativity caused by alcohol consumption may compensate for the negative effect of disrupted networks.

If so, not all is lost for American innovation.

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: “Absinthe Lover” by Pablo Picasso

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Does labor regulation hurt innovation?

Posted on February 6, 2021 by Eugene Ivanov

Those who believe that government regulations, including labor laws, hurt innovation, please, raise your hand. Wow, quite a few hands raised!

Indeed, the suspicion against regulations is fueled by common belief that they damage economic growth, with which innovation is intimately connected. For example, some scholars have expressed concerns that slower economic growth in Southern European and Latin America countries with heavy labor regulation could be due to reluctance to fund innovation programs because of the burden of labor laws (for references, see here). However, a point of view has been strongly articulated too that if applied effectively, regulation can foster a thriving, competitive marketplace where innovation and technological progress flourish. 

Interestingly, academic literature on the effects of regulation, in particular labor laws, on innovation seems to favor the second, more sanguine point of view.

For example, a 2010 study compared the innovation output in five countries—the U.S., U.K., France, Germany, and India–and found that stronger labor laws positively correlated with a country’s innovation output. Interestingly, this effect was more pronounced in innovation-intensive industries, such as medical devices, than in more traditional industries, such as textile. Equally importantly, the study found that the only dimension of labor laws that had a tangible impact on innovation was the “regulation of dismissal” component, i.e., the ease/difficulty with which employers could dismiss employees.

Another study published by the same authors in 2014 analyzed the impact on innovation of the U.S. wrongful discharge laws (WDL). These laws provide employees with greater protection than employment-at-will, where employees can be terminated with or without just cause. The staggered passage of WDL across the U.S. states created a natural experiment assessing their impact on the innovation output. The study found increase in the number and improved quality of patents issued in the states that adopted WDL, with the effect starting to emerge two years after the WDL passage. As in the previous work, the positive impact on innovation was significant only in highly innovation-intensive industries.

Taken together, both studies indicate that innovation is fostered by laws that limit firms’ ability to discharge their employees at will. The authors call this phenomenon an “insurance effect”: feeling increased protection from negative consequences of failure, employees are more committed to engaging in risky innovative projects.

These findings are fully consistent with a theoretical concept proposed by Berkeley’s Gustavo Manso in 2011. The concept postulates that the optimal incentives motivating employees to innovate must include a combination of tolerance for failures in the short term and reward for success in the long term. Tolerance for early failures allows the employees to take risks at the initial stages of the innovation process without incurring the negative consequences of failed projects. The reward for long-term success encourages the employees to explore risky ideas that may allow them to achieve innovation breakthroughs in more distant future.

In other words, the best way to encourage risk-taking and experimentation is not to “celebrate failures,” as often suggested, but to remove the proverbial Sword of Damocles of punishment for them, something that any firm can easily do by modifying its termination policies.

A recent study adds an additional layer of complexity to the relationship between innovation and regulation. An international team of economists analyzed innovation outputs in France where many labor regulations apply to firms with as few as 50 employees. The authors found that regulations do negatively affect innovation, but in an interesting twist they saw that this regulation negatively affected only incremental, but not radical innovation. Using a sports metaphor, they concluded that “[a] more regulated economy may have less innovation, but when firms do innovate, they tend to ‘swing for the fence’ with more radical…breakthroughs.”

On emotional level, I hate regulations (hey, I grew up in the Soviet Union!). But regulations are part of our lives. There is no point in crying that “structure stifles innovation.” We should instead constantly look for ways to create conditions favoring innovation. Through regulations and otherwise.

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: Paweł Czerwiński on Unsplash

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Are you bored to death and procrastinating? Good for you!

Posted on January 23, 2021 by Eugene Ivanov

In my two previous posts (here and here), I argued that the wide-spread belief that we are swimming in an ocean of cheap innovative ideas–solidified in a popular slogan “ideas are a dime a dozen”–is a myth. Available evidence suggests that the U.S. is facing a growing shortage of novel ideas. Worse, the cost of getting these ideas is growing while their quality seems to be declining.

What’s going on? One thing is clear: the quantity and quality of novel ideas are declining because sources of new scientific discoveries are drying up. Although the total U.S. spending on R&D remains steady at 2.5% of GDP, only about 30% of the money comes from the federal government; 70% of it is contributed by the private sector. With its focus on rapid returns, will private sector spend money on fundamental and, therefore, potentially risky R&D projects? No. (Of note, 75% of U.S. venture capital goes to software and 5-10% to biotech. How is the rest of R&D supposed to be funded?). The industry still can generate incrementally innovative combinations of old ideas–which indeed may be plentiful and cheap–but it is unlikely to create breakthrough innovations.

There are hopeful signs that the newly minted Biden administration is going to pay more attention to basic science; yet it may take a while to repair the damage incurred by decades of neglect.

I also feel we must consider another explanation: we have become less creative as a nation.

This fanciful—and I suspect, offensive to many—idea came to me when I recently re-read a 2017 Wired article. The article described a study showing that bored individuals generated more creative ideas than a non-bored control group. The authors of the study argued that boredom might spark creativity because a bored mind craves for stimulation.

The problem is that the proliferation of social media channels eliminated this “bored” state of mind. We are always “busy” playing with our mobile devices, numbing our brains with the constant flow of mostly useless input. Being constantly artificially “on,” our brains refuse to get positively stimulated. By refusing to get and stay bored we become less creative.

There is another human trait that carries significant negative connotation in the workplace and society at large: procrastination. Procrastinating folks are considered inefficient, unproductive, and—oh, the horror!—bad team players.

However, a recent study shows that procrastination may foster creativity. The relationship between procrastination and creativity seems to be inversely U-shaped: test subjects who procrastinated moderately received higher creativity ratings than those who procrastinated less or more. The authors of the study speculate that moderate procrastination sets in motion a mechanism of problem restructuring, which results in the production of more creative ideas.

According to statistical data, the U.S. is the most overworked developed nation in the world. The average productivity per American worker has increased 400% since 1950; yet we’re working the same 40-hour workweek, at least on paper. Of course, we have no time to procrastinate! But what was the price for this spectacular gain in productivity? What if we paid for that by the loss of our creativity?

Now, I’m not saying that in order to become more creative, we have to trash your mobile gadgets and delete time management software from your laptops. What I’m saying is we have to respect our own brain by treating it with occasional spells of a quiet, unrushed deliberation.

Especially, of course, if after a shower, we went out to the garden and sat under an apple tree.

Image credit: Magnet.me on Unsplash

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

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U.S. innovation: a perennial half-full/half-empty glass

Posted on December 28, 2020 by Eugene Ivanov

In my previous post, I argued that a wide-spread belief that we are swimming in an ocean of cheap innovative ideas – solidified in a popular slogan “ideas are a dime a dozen” — is no more than a myth. Available empirical evidence strongly suggests that we are facing a growing shortage of novel ideas. Worse, the cost of getting these ideas is growing while their quality seems to be declining. Left unchanged, this trend may seriously damage American innovation.

Some folks believe we are already there. In the latest issue of Harvard Business Review, Curtis Carlson sets alarm bells ringing:

“Innovation in the United States is highly inefficient. The per capita rate of job creation from new companies has declined for decades, and only 3% of patents are ever commercialized. Most university tech-transfer and start-up incubators lose money…Most venture capital firms…lose money. All this despite the efforts of some 220 university entrepreneurial programs, 6,000 professors and instructors teaching entrepreneurship, 1,400 venture incubators, and billions of dollars a year in government investments.”  

In addition to impeding economic growth, the decline in innovation capabilities may have profound negative consequences for U.S. national security, as highlighted in a recent report, “Innovation and Security. Keeping Our Edge,” composed by the Council on Foreign Relations.

Those who think that Carlson is way too pessimistic have ammunition of their own, however. They may point to the recently released Global Innovation Index 2020, an annual ranking of the world’s innovation capacities. In this year’s list, the United States occupies a respected 3rd place (after Switzerland and Sweden). This is the same spot the U.S. held last year and even a slight improvement over the 6th place in 2018, 4th in 2017, 4th in 2016, and 5th in 2015. Where is evidence of decline?

(As someone obsessed with indexes, I immediately remembered another ranking, the 2019 Global Health Security Index, an assessment of the health security capabilities across 195 nations. The Index specifically focused on nations’ preparedness for infectious disease outbreaks that can lead to pandemics. In an estimate that sounds like a bad joke today, the United States led the world in the overall preparedness score. It also scored the highest in a few specific categories, including Early Detection & Reporting of Epidemics.)

Folks who prefer to believe that the glass of U.S. innovation is at least half-full could refer to an unprecedented speed with which RNA-based anti-COVID-19 vaccines have been developed – along with an impressive list of fast and “frugal” innovations developed in response to the pandemic.

Their opponents take a longer-term view. They argue that virtual working environment, a necessary consequence of the increasingly popular working-from-home approach, damages social networks established in large organizations, which will inevitably have a strong negative effect on corporate innovation. (Another potential danger is the so-called “covidization” of academic research, but this topic deserves a special consideration.)  

I personally see one more troubling aspect: the lack of a strong public U.S. innovation policy. Previously, I found that there is a strong correlation between a country’s innovation potential and the level of democratic developments in this country (as assessed by the Democracy Index 2019). Although all five individual components of the Democracy Index positively correlate with innovation, the strongest correlation occurs for Functioning of Government. And yet, the above-mentioned Council on Foreign Relations’ report specifically criticized current administration for the weak role it plays in shaping the U.S. innovation policy.

One hopes that the incoming Biden administration will start paying appropriate attention to science, technology, and innovation. In the meantime, we must stop fancy ourselves with the chimera of “plentiful and cheap innovation ideas.” Quality ideas are rare and expensive, and it takes a lot of valuable resources to generate a potentially breakthrough idea. No efforts should be spared to understand how to make this process more effective and more efficient.

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: Nolan Simmons on Unsplash

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Ideas are a dime a dozen. Are they really?

Posted on October 16, 2020 by Eugene Ivanov

Any seasoned innovation practitioner would tell you that idea generation is the most straightforward part of the innovation process. Generating ideas is easy, the thinking goes; it is at the stage of testing these ideas and deciding which one to scale into a new venture that the innovation process begins to choke.

Taken to extremes, this mindset feeds the perception that novel ideas are plentiful and cheap. “Ideas are a dime a dozen,” we can often hear. Are they really?

A joint team of researchers from Stanford and MIT has challenged the “plentiful and cheap idea” dogma. They  presented empirical evidence showing that research productivity, a scientific term for a layman’s “idea,” is actually declining. According to the authors’ calculations, research productivity across the whole US economy declines at an average rate of 5.3% per year. More specifically, in semiconductors (the playground of the famous Moore’s Law), research productivity is declining at a rate of 6.8% per year; in agribusiness and pharmaceutical research, the annual decline is about 5.0%.

In other words, contrary to a popular belief, ideas are not plentiful. We are experiencing a growing shortage of ideas instead.

If research productivity is on decline, how then has steady economic growth been sustained? The answer is simple: by rising what economists call research effort, which in layman’s terms means the number of researchers. Indeed, the number of researchers required to achieve the famous doubling, every two years, of the density of computer chips (Moore’s Law) is more than 18 times larger today than it was in the early 1970s.

In some areas of agricultural research, the number of scientists has risen 23-fold between 1969 and 2009. And while research productivity responsible for the drugs approved by the FDA between 1970 and 2015 has been declining at an annual rate of 3.5%, this decline was offset by the 6.0% annual growth in the number of involved researchers.

Now, if the number of ideas is declining while the number of people generating them is growing, how can these ideas be cheap? They cannot. The ideas are becoming more, not less, expensive.

One can hope that at least the quality of novel ideas remains high. Alas, there is little evidence supporting this intellectual refuge. Consider this: by the end of 2019, the venture capital industry had accumulated a whopping $121 billion in so-called “dry powder,” the money for which venture capitalists failed to find ideas to invest in. So much for plentiful and cheap innovative ideas! 

Let’s ponder for a minute over this fundamental question: where should novel ideas come from in the first place? The answer looks obvious: from R&D, where else?

Exactly, and here is the root of the problem. In the decades that followed World War II, entirely new sectors of the U.S. economy have been created, such as jet aircraft, modern-day pharmaceuticals, microelectronics, satellites, and digital computers. All these developments happened thanks to a heavy infusion of public money, with the federal government contributing more than 50% of R&D expenses.

Although the total US spending on R&D has remained steady for the past years, at 2.5% of GDP, only about 30% of the money now comes from the federal government; 70% of it is contributed by the private sector. With its focus on rapid ROI and the competition, will private sector spend money on fundamental – and, therefore, inevitably long-term and potentially risky – R&D projects? No.

The quality of novel ideas is declining because sources of new scientific discoveries in the United States are gradually drying up. Yes, the industry can still generate incrementally innovative combinations of old ideas – which indeed may already be plentiful and cheap – but it will fail to create breakthrough innovations.

We need a renewed focus on idea generation. We need to highlight current gaps in our scientific knowledge and to draw a step-by-step roadmap to bridging these gaps – with sources of funding clearly identified. We need to resume spending public money on R&D at the level that ensured the U.S. domination in innovation in the past.

It is time to bring “idea” back to innovation.

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: Josh Appel on Unsplash

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Why I Don’t Like the Term “Innovator’s DNA”

Posted on October 8, 2020 by Eugene Ivanov

“And just as each person’s physical DNA is unique, each individual we studied had a unique innovator’s DNA for generating breakthrough business ideas.”

This is a line from the influential HBR article written by Jeffrey Dyer, Hal Gregersen, and the late Clayton Christensen back in 2009. The inspiring image created by article has gone viral, and the term “innovator’s DNA” has become an innovation management buzzword. Google “innovation is in our DNA” and you would be surprised how many people and organizations have more than just adenine, guanine, cytosine, and thymine in their DNA.

Sure, I know that every popular business term immediately becomes a powerful magnet for clichés. Innovation is hardly an exception, and yet I think that mixing innovation with DNA is a bad idea and that “innovator’s DNA” is an awkward term.

To begin with, ascribing innovative (or any other) abilities of a person to her DNA implies that DNA is the sole determinant of who this person is. This simply is not true: our features are the result of a combined action of two major factors: our genetic material (represented by DNA) and our environment.

The relative importance of each factor varies for a particular feature. For example, the color of our eyes or the curliness of our hair are almost exclusively determined by our DNA. But other features, such as our behavior or predisposition to diseases, are greatly influenced by external factors, such as a lifestyle. A general rule is that the more complex the human trait, the more it is influenced by environmental factors.

There is, therefore, every reason to believe that our ability to innovate, a complex cognitive and behavioral feature, is predominantly determined by our environment. You’re an innovator not because you were born with innovator’s DNA. You’re an innovator because you’ve been exposed to innovation environment.

Second, it is fair to say that innovation is about change. Innovators must rapidly respond to changing business conditions, promptly adapt to shifting consumer preferences, and closely follow technology developments. It is also fair to say that innovation is about trying and failing. The only other cliché that comes close in popularity to innovator’s DNA is our obsession with failures (which we love to celebrate but hate to commit). 

At the same time, by virtue of it being the guardian of our genetic code, DNA is extremely stable molecule. Do you know that there are only 0.3 errors produced every time the whole human genome is reproduced – and the human genome consists of more than 3 billion elements? Sure, I can see why holders of Six Sigma Black Belts would worship DNA, but I do feel that innovation practitioners should be looking for inspiration somewhere else.

By the way, my sincere congratulations to Jennifer Doudna and Emmanuelle Charpentier for winning this year’s Nobel Prize in Chemistry for CRISP gene editing tool. You are true innovators, ladies! And you work with DNA.

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: https://innovationdistrict.childrensnational.org/decoding-cellular-signals-linked-to-hypospadias/

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Crowdsourcing: An Innovation Tool to Overcome the Limits of Remote Work

Posted on September 23, 2020 by Eugene Ivanov

(A version of this article was originally posted to the Qmarkets blog)

The unprecedented shock caused by the COVID-19 pandemic has forced many organizations to change the ways they do business. Almost every business operation has been affected: from the manner firms talk to their customers to the logistics of product delivery to maintaining channels of communication between employees.

Corporate Innovation: A Victim of Remote Work?

Corporate innovation will not be spared the troubles of adjusting to the “new normal.”

One danger corporate innovation teams may be already facing is quite trivial: reduced R&D/innovation budgets, a measure that myopic managers routinely resort to in times of economic hardship. Another danger might not be as evident yet, could turn to be much more damaging long-term: the sharp increase in remote work.

Initial reports painted quite a rosy picture of the remote work experiment. According to data presented by Upwork back in April, more than half of the American workers were working from home, with almost 60% of managers saying that “the shift to remote work has gone better than expected.” Some big tech companies went as far as to allow willing employees to work from home either permanently or for a foreseeable future.

But voices of caution and concern are getting louder, too. To begin with, not every job, however “digitized,” can be done from home. Adding to that, remote work dramatically reduces the level of interaction between employees. As a result, personal relationships suffer, internal networks shrink, and the whole organization becomes less interconnected. Experts warn that less connected networks reduce employees’ sense of their commitment to one another and to the organization. They also suggest that extended online communication may foster more self-serving behavior and even dishonesty. Besides, less information is known to be shared in online communication, increasing the likelihood of poor decision-making.

It’s highly unlikely that the hastily written Upwork report was capable – or even attempting – to consider the long-term effects of massive and prolonged remote work on organizational performance and wellbeing.

The Power of Serendipity

And then, there is a feature of innovation that sets it aside from some other corporate activities: its unique dependence on face-to-face interaction.

Remember Marissa Mayer, who, shortly after becoming the CEO of Yahoo, banned Yahoo’s employees from working from home? Amid the storm of condemnation that followed Mayer’s move, an important line in the memo announcing the ban has been completely overlooked:

“Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings.”

As a former Googler, Mayer knew that innovation requires collaboration, and both thrive on serendipity.

The role that serendipity – generally understood as the process of making an important discovery while looking for something else – plays in innovation is complex, nuanced, and obviously lies outside the scope of this article.

Yet, it’s important to remember that the so-called serendipitous encounters, unplanned interactions between employees working in close proximity to each other, represent one of the driving forces of innovation. They are believed to play a central role in the development of new collaborative partnerships that are crucial for the sustained corporate innovation process.

With so many employees working remotely – and the remote work itself becoming a permanent fixture, not a temporary fix – how can the occurrence of serendipitous encounters be preserved? How can you occasionally “bump” into someone in a hallway when all your meetings are scheduled in advance on Zoom?

Technology, of course, can help. Two promising approaches could be considered:

1. Creating a virtual reality office that employees could visit via realistic, high-quality avatars. Spatial, an NYC-based startup, allows its clients to share a virtual room using just a web link so that users can “drop-in” with just a web browser and even without a special headset.

2. Enterprise-wide adoption of networking apps allowing the random matching of the firms’ employees.

Besides, as organizations begin to return to the office space and adopt “hybrid’ approaches of mixing in-office and remote work arrangements, some face-to-face communications will gradually resume easing the pain of extreme isolation.

In addition, firms should not neglect a time-tested approach that by its very nature is designed to let large groups of people innovate together without facing each other – crowdsourcing.

Crowdsourcing Challenges and Opportunities

Crowdsourcing is a process of assigning internal jobs to external crowds of people in the form of an open call. Over the past 10-15 years, numerous organizations – including corporations, governmental agencies, and nonprofits – have adopted crowdsourcing as an open innovation tool to help them address their most pressing technical and business challenges.

By the virtue of using online platforms, crowdsourcing lets organizations bring together large groups of remotely working people around a single innovation project. Not only does this minimize costs – and in times of pandemics, complications – of in-person interactions; outsourcing the problem-solving process to a diverse crowd of external solvers, often results in highly original, often completely unorthodox, solutions.

In times of uncertainty, crowdsourcing should become an indispensable ideation tool allowing organizations to define the contours of their “new normal.” Two major crowdsourcing approaches can be used depending on specific objectives:

Internal crowdsourcing, an approach engaging the “internal crowd” of the organization’s own employees (and, perhaps, a close circle of academic and business partners, suppliers, lead users, etc.). This approach has been proven effective in finding new ways of optimizing operations and cutting costs. Many firms can also benefit from internal crowdsourcing to perfect their remote work processes. These benefits of crowdsourcing may be especially in demand today that the organizations cut their commitments to innovation and focus instead on short-term issues related to their core business.

External crowdsourcing, the more traditional form of crowdsourcing is still an excellent tool to facilitate new product development. In addition, crowdsourcing can be used to spot the so-called weak signals, early signs of shifting customer demand and newly emerging consumer needs. Later, these weak signals can serve as input to scenario planning, a disciplined process of discovering new opportunities and updating strategic plans.

Of course, crowdsourcing will never fully replicate real human interaction and those serendipitous moments. But if working from home is to become a permanent fixture for many businesses across the globe, strategies must be put in place to rectify this. And crowdsourcing is one of these strategies.

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: Andrew Neel on Unsplash

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What Will Crowdsourcing Look Like in 10 Years?

Posted on September 18, 2020 by Eugene Ivanov

(This piece was originally posted to the HeroX blog)

There is a popular joke (attributed to Niels Bohr): “It is difficult to make predictions, especially about the future.” And at times of uncertainty that we’re all living through, predicting the future is even more daunting. But guessing about what will come tomorrow is human nature. Besides, businesses use predictions to plan their next steps and foresee new opportunities and threats. As Gideon Litchfield wrote in a recent issue of MIT Technology Review, “…the point of futurism isn’t to guess the future; it’s to challenge your assumptions about the present so the future doesn’t catch you off guards.”  

Back in July, I reviewed the past decade of crowdsourcing, a tool that numerous organizations around the world, including corporations, governmental agencies, and not-for-profit foundations, use to address complex technical and business problems. In this post, I’ll attempt to predict what crowdsourcing will look like in 10 years.

Crowdsourcing Will Become an Essential Component of the Future of Work

In a recent Gallup study of U.S. workers published by the New York Times, 34 percent of respondents held multiple jobs or had income from one or more self-employment arrangements. What used to be considered an “alternative” employment is rapidly becoming a norm. We’re witnessing the dawn of the future of work in which open talent strategies and horizontal cross-functional teams will be replacing traditional vertical hierarchies and siloed organizational models. 

Crowdsourcing will become an essential component of this structure. Organizations will be using their own employees to perform the “core” activities. But for the tasks they lack internal resources or expertise crowds of independent on-demand contributors will be assembled. Many organizations will start nurturing their own crowds which will be repeatedly used for similar projects and tasks. The future competition will become competition for the quality of the crowds each organization can rapidly assemble to perform an urgent job. 

Crowdsourcing Will Finally Become a Mainstream Open Innovation Tool

In recent years, crowdsourcing has become a popular topic in business publications and social media. Yet, its acceptance as a practical problem-solving tool has been slow. One of the major factors slowing down the acceptance of crowdsourcing is widespread, often completely paralyzing, uncertainty over which technical or business problem can (or can’t) be solved by this approach. In addition, the expansive use of the term “crowdsourcing” has blurred the borders between it and other problem-solving techniques, such as brainstorming. As a result, crowdsourcing is often used in the wrong way, and when the outcome proves disappointing, it is crowdsourcing itself that gets the blame for being “ineffective.”

I predict that in 10 years, academics, business writers, and crowdsourcing practitioners will have finally found efficient ways to educate corporate innovation leaders on the very basics of crowdsourcing (“Crowdsourcing101,” so to speak): definition, typology, infrastructure, processes, success metrics, and incentives for the crowds. Crowdsourcing will become “simple” so that organizations will be capable of practicing it in an intuitive and sustainable way. 

Crowdsourcing Will Be Streamlined by AI/ML Algorithms 

Crowdsourcing of the future will be assisted by advancements in technology, of which using AI/ML tools will be the most obvious development. First, large datasets will be available on both successful and failed crowdsourcing campaigns. Analyzing the data will help identify types of problems most amenable to solving by applying the wisdom of crowds. Moreover, it’ll be possible to design algorithms allowing users to translate their technical or business challenges into specific problem statements with the highest expected levels of success. The same algorithms will tell the users which kind of information they should be ready to provide to the crowd to maximize the odds for the problem to be solved.

Second, algorithms will exist allowing to match a specific problem to a “perfect” crowdsourcing platform. By analyzing a set of problems each platform has dealt with in the past, the reported solution rate, and the size and the composition of the crowd behind the platform, it’ll be eventually possible to automatically generate a list of the most promising platforms to tackle any particular problem. Finally, AI/ML tools allowing rapid creation of sufficiently large and diverse crowds (“crowds-on-demand”) are expected to be developed, too.

Crowdsourcing Will “Invade” Medicine and Law

Although crowdsourcing has been successfully used in many disciplines and professional areas, there are some “islands of resistance” where the progress in the adoption of crowdsourcing has been especially slow. Two such areas are medicine and law, the professional fields dominated by highly educated and trained experts, who are often scornful of the thought that a “bunch of amateurs” can solve a problem that they couldn’t. 

Some positive signs of change have already been spotted in the form of crowdsourcing platforms providing medical help and legal information. Examples are CrowdMed, a crowdsourcing platform providing patients with the online medical diagnosis, and Casetext, a crowdsourced online database of legal information.

I expect this trend to continue. However, the “invasion” of crowdsourcing into medicine and law will require a deep cultural shift on the part of doctors and lawyers. They will have to understand that like any tool, crowdsourcing is not going to “replace” them. Instead, it will make their work more meaningful by taking away routine and repeatable tasks.

The Marketplace of Crowdsourcing Platforms Will Be Consolidated

Complicating the efforts of many organizations to run effective crowdsourcing campaigns is a huge number of different crowdsourcing platforms available in the marketplace, with some experts putting this number at 1,000 worldwide. Obviously, navigating such an ocean of different options is challenging, to say the very least, especially for the organizations new to crowdsourcing. Mistakes are quite often in matching problems organizations want to crowdsource to platforms best suited to deal with each specific problem.

And yet, there has been almost no M&A activity in this space. Fortunately, we’re seeing signs of improvements in this area, too. Last year, HeroX signed a strategic partnership agreement with Ideanco to launch two challenges focused on climate change and food security. In July, the UK idea management company Wazoku bought the crowdsourcing platform InnoCentive.

The trend of consolidating available crowdsourcing services looks promising. I expect that in 10 years, a few large crowdsourcing platforms will emerge, each specializing in solving different types of technical and business problems. At the same time, I have no doubts that new entrants to the crowdsourcing space will keep appearing.

New Forms of Assembling Crowds Will Emerge

As any experienced crowdsourcing practitioner would tell you, crowdsourcing is at its best when it’s applied to a limited-scope problem or task, usually being handled by a single individual or a small team. But in this simplicity lies one of the crowdsourcing’s major limitations: its inability to tackle problems or tasks requiring larger groups of workers, especially if the task on hand cannot be completely defined in advance. 

A few years ago, a group of researchers at Stanford proposed a concept of a “flash organization,” an approach and software to structure crowds like organizations, which allows them to achieve complex and open-ended goals. As far as I know, there are no published examples of organizations using the concept of “flash organizations” to run real-life crowdsourcing projects. I have no doubt that such examples will appear within the next 10 years. No do I have any doubts that new ways of making crowds more agile and effective will emerge.

Crowdsourcing is here to stay. I’d like to finish this piece with another quote (attributed to both Abraham Lincoln and Peter Drucker): “The best way to predict the future is to create it.” By perfecting the way crowdsourcing is being used by organizations, we can help shape the future of this powerful open innovation tool. 

Check out my eBook, “We the People of the Crowd…,” a collection of stories about crowdsourcing reflecting my personal experience in working with corporate and nonprofit clients.

Image credit: Drew Beamer on Unsplash

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