Clay Shirky

Clay Shirky divides his time among consulting, teaching and writing on the social and economic effects of Internet technologies. His consulting practice focuses on the rise of decentralized technologies. He is an adjunct professor in New York University’s graduate Interactive Telecommunications Program. Shirky has written about and been interviewed extensively about the Internet since 1996. His most recent book is Here Comes Everybody: The Power of Organizing Without Organizations, published in 2008. We asked him how he defines innovation and about some of the emerging models of team-based innovation.

PwC: What has surprised you about the innovations you’ve tracked over the past decade?

CS: One surprise relates to the social origin of good ideas. A lot of the innovations inside businesses are coming from people who see across disciplines. It’s not just designers or engineers. It’s designers who talk to engineers and vice versa. It’s a small group of polymaths working together, as opposed to a focused team working on a particular problem.

In collaborative efforts in the software industry, we’re seeing that the users’ mental model of what they’re doing matters more than the features the software provides, and the users’ mental model of what other users are doing matters more than the mental model of the individual user. When everybody approaching a particular problem has the same basic assumptions about what’s going on, you get what the military culture calls shared awareness. This turns out to encourage innovation that is distributed across many different users, and it supports the emergence of communities of practice.

PwC: How do you define innovation?

CS: The word innovation is so overloaded. It’s become the official good of the current business climate. We used to say, “We improved the product, and now the client is happier.” But now we feel compelled to say, “We innovated on the product, and the client is happier.”

Innovation buys you the ability for a brief period to have a non-copyable competitive advantage. What companies don’t want from innovation is to invent the product that will destroy their existing high- margin product.

PwC: How, then, would you advise a company to spur innovation?

CS: The canonical approach to this that drives me berserk is starting an innovation department—basically by rounding up all of the malcontents in one place so you can ignore them in a group rather than individually.

To do it right, first you have to decide on what time scale you’re making your bets. Are you looking to upgrade your products and services in 3, 5, or 10 years? If you’re closer to the three-year part of that spectrum, that suggests cultural change rather than organizational change. The 10-year time frame suggests cultural and organizational change.

For example, if, in three years, you want highway mileage to be 35 instead of 23, you really just need to get everyone focused on continuous improvement. And this can’t be just a top-down edict; you need to change the culture. To do that, you only have to recruit half a dozen people who care and let them start a conversation that attracts other, equivalently bright, engaged people. And then reward them for good ideas. And you have to pay attention to the special sauce that really makes these kinds of communities work, and that’s the quality of the group facilitation. We’ve learned how important that is from the open-source community.

PwC: And where does organizational change fit in?

CS: If you want radical change, if you want an all-electric car that can be fully recharged in an hour, then you also need to change your organization. You need to pull your best people out of the current culture and constraints and say, start from scratch. You want the group to be small so there’s no social loafing. You have to give them the ability to talk to anybody in the organization that they think they can learn from.