Should firms return to the ‘wild’ innovation model?

How can the R&D model be adapted to the contemporary challenges of innovation-intensive capitalism and become a model for innovative firms?

One solution is to return to ‘wild’ innovation, when firms set up small, unofficial teams of researchers working with limited resources, in the hope that by giving them more autonomy they will be able to explore new paths. In these rare forms of design organization, the firms count on serendipity, fortunate accidents and chance encounters in cross-functional teams, between wise experts who accept ideas from people throughout the firm as any suggestion can be worth investigating (Robinson and Stern 1997). The case of the Stephensons showed that wild innovation can be experimental and flexible; it can explore new ideas and create new values. However, wild innovation has its limits; it is in fact a poor model for the innovative firm, not least in comparison with the R&D model.

Although this type of organization can be interesting and can sometimes help new ideas emerge, it is never more than one element in a more general model, as we saw in our study of start-ups (see Avanti, Chapter 6), innovative firms (Chapter 4) and R&D-based firms (Chapter 7). Other issues must be dealt with, such as defining the functional spaces, launching the innovations and repeating them throughout lineages, and ensuring the gradual mastery of advanced technologies.

Introduction: Tefal, from the firm to the model?

An Innovation Manager's questions

As in the previous chapter, an imaginary Innovation Manager will serve as a guide to the practical issues involved in adopting the potential model.

'The Tefal model is of course very attractive, but I can see lots of reasons why it wouldn't work in our company. For example, I like the idea of two-headed project management and agree that it is really important to make sure that technical experts and product experts work together and communicate well. But there are also very good reasons for keeping separate departments and letting them work on precise, well-defined objectives. Isn't it risky to change specifications all the time to keep up with the latest market information? I'm concerned that a two-headed management system might mean too much to-ing and fro-ing, with difficulties in controlling variety and with high coordination costs. I'm not convinced that designers will be any more productive working together just because there is a two-headed project management team.

'The same applies to the specifications. Having less restrictive specifications will of course improve flexibility, but once again, I'm concerned about things going too far, with problems regarding excessive variety or simply nonconformity.

'The product committee seems attractive too on the face of it, but how do you organize a meeting of nearly eighty people – including the top management – and ensure that there are healthy discussions and not just sterile debates about major strategic options that always end up being too vague?

We were very pleased to accept the authors' request to focus on the key prospects opened up by this book. Renault, which has a fruitful research partnership with the Ecole des Mines de Paris (CGS), was directly involved in the issues covered here.

For Renault, this research has already encouraged us to set up an Innovation Centre and to develop experimental innovative design tools; today it helps build more effective ‘front-end’ functions for the firm, in terms of innovation capability and value creation. We were also very pleased to find that the experience provided by Renault for this research contributed to the results described in this book. The research partnership was even the subject of a joint communication by Renault and the Ecole des Mines de Paris in 2005, by special invitation from the Annual Conference of the European Academy of Management.

The distinction between innovative design and rule-based design is doubtless the latest idea and the one which will have the most impact on the way design systems operate in the future. It helps build innovative design teams more effectively. They will, of course, be composed of designers, engineers, product managers, researchers, partner suppliers, etc. But above all, these teams will have a wider scope for exploration and research, whilst also being better organized and more involved in our sales projects. The major contribution of the C-K design theory developed by the Ecole des Mines is doubtless to reconcile these two notions.

In the spring of 1999, osama bin laden (1957–), the head of the al-Qaeda terrorist group, agreed to support a plan submitted by Khalid Sheikh Mohammed (1964–) to use airplanes as weapons to crash into buildings, or what they came to call the “planes operation.” In the months that followed, they selected targets, including the World Trade Center in New York City and the White House, the Capitol, and the Pentagon in Washington. As the plans matured, bin Laden picked a group of young men who had attended al-Qaeda training camps in Afghanistan – Mohamed Atta, Nawaf al-Hazmi, Ziad Jarrah, Khalid al-Mihdhar, and Marwan al-Shehhi – to pilot the aircraft. The planning was done in extreme secrecy. None of these individuals knew how to pilot an aircraft, however, so two essential steps for the operation to succeed were to get them into the United States and to get them trained as pilots. Could U.S. intelligence analysts detect what was going on in time to prevent an attack in the United States?

Two of the intended pilots, Hazmi and Mihdhar, had fought with their fellow Muslims in Bosnia earlier in the decade, in addition to having traveled to Afghanistan for training. Therefore, intelligence analysts were likely to see them as suspicious. Nonetheless, they were granted visas by the State Department.

In 1941 much of the world was at war, with the united states the only major power still on the sidelines. American public opinion was strongly isolationist, but many in the government, including President Franklin Roosevelt, believed that U.S. involvement was inevitable. Roosevelt's focus, however, was on and across the Atlantic Ocean, where Nazi Germany's army had overrun most of Europe and its navy was threatening Britain's maritime lifelines. In October 1941, in two separate incidents, U.S. warships escorting shipments to Britain were torpedoed by German submarines. If either – or worse, both – of the two remaining German opponents, Britain or the USSR, were defeated or sued for peace, the United States would be in an extremely unfavorable strategic position. To prepare for a likely war, Roosevelt provided armaments to the British and Soviets, and set in motion a new building program for the U.S. Navy, among other preparatory measures.

Asia, in contrast, seemed less dangerous. Japan had been fighting to take over part of China for a decade, but the situation there had settled into a stalemate. The Japanese also appeared interested in taking advantage of Germany's victory over France and the Netherlands in 1940 and its continuing heavy pressure on Britain, to perhaps take over some of the European colonies in Southeast Asia; but it was not clear when or where this might actually happen. The U.S. government did not want a new and expanded round of fighting in Southeast Asia.

In april 1978, a pro-soviet government took over afghanistan after a coup. Afghanistan had been drifting away from a nonthreatening neutrality and Moscow used the influence it had through Soviet-trained military officers, a local communist party, and economic aid and advisors to obtain a government more in line with its interests. The new Afghan government immediately started to implement a leftist program, including land and education reforms that were anathema to much of the population, who wanted to maintain their Islamic traditions. A dramatic increase in the number of Soviet military and civilian advisers in the country also created animosity against the central government. By November 1978, tribes in the countryside were in open revolt.

Therefore, there were two questions for analysts: (1) Would Moscow allow a client state on its borders to slip out of its control? and (2) If the Soviets decided to reassert their influence, what steps would they take?

The possibility of increasing Soviet activity in Afghanistan caused concern in Washington. As early as March 1979, U.S. intelligence detected Soviet troops and equipment moving closer to the border with Afghanistan in limited numbers, apparently in response to the recent death of some Soviet advisers in the fighting. There was a debate among analysts in Washington over the meaning of these indicators, and several hypotheses were considered. Most believed that this was an exercise, but others were concerned that it was an unprecedented level of activity in a usually quiet sector.

The vietnam war of the 1960s and 1970s was a long and complex conflict, with one of its key elements being the role of intelligence. In contrast to intelligence analysts' work on the massive Soviet conventional and nuclear forces, the conflict in Southeast Asia required dealing with an insurgency. There were spirited debates among analysts over whether the communist effort to take over South Vietnam was better understood as a leftist social revolution, with significant control from Moscow and Beijing, or a nationalist struggle for independence, with the key decisions being made in Hanoi. Was this a largely military conflict, in which factors such as numbers and firepower would be decisive, or was it a broader undertaking, in which the political, economic, and social aspects would be important? Intelligence analysts working on the Vietnam problem also had to be careful that their assessments were not perceived as criticism of U.S. military strategy or policy in general.

When looking at the conflict in broad, strategic terms, some analysts believed that the North Vietnamese were not likely to give up their effort to take over South Vietnam in response to the level of force that the United States was willing to apply. Many in Washington disagreed, believing that U.S. technology, numbers, and will could prevail. Analysts' assessments that Hanoi's staying power could turn out to be greater than Washington's were confirmed in the long term.

Deciding can often be hard; there are so many possibilities. What do I want for dinner, or what movie do I want to see? Making a decision can be even more difficult when there are high emotional or financial stakes. Whom do I want to marry? What is the best house or career? Even in marriage, housing, or careers, however, there is usually a finite number of options and a reasonable amount of information about them. How challenging is it, then, when the stakes are huge, the information confusing, the deadlines short, and the outcomes momentous, such as when a law enforcement officer is determining which suspect to arrest, a company is considering a new product, or, even worse, a government is trying to decide whether to go to war?

There are four interrelated aspects of decision making that are particularly troublesome: the uncertainty of the current situation, the unpleasant fact that from time to time there are surprises, the strong possibility that someone is trying to deceive, and the imponderable future.

Uncertainty

One of the main reasons why decisions are so hard to make is the nature of the situation in which choices are made. This is especially the case in the three areas in which intelligence analysis is most widely used: national security, law enforcement, and business. For even a simple decision, the environment can be complex, shifting, and uncertain. There is so much information to consider and so little time to deal with it.

No issue was more important to western intelligence analysts than trying to understand the capabilities of nuclear weapons and delivery systems that were being developed by the USSR. These warheads, missiles, and bombers (and in time, submarines) had unprecedented range and striking power. The USSR's strategic nuclear forces were difficult to assess in detail because they were carefully shielded by intense security measures, including denial and deception. Early efforts to anticipate developments in Soviet strategic weapons were based on limited collection and were not successful. In 1949, most U.S. intelligence agencies' views, except for the Air Force's more alarmist and more accurate estimate, were that it would take the Soviets two to five years before they had their first nuclear weapons. It came as a great shock, in September 1949, when patrol aircraft detected evidence of a successful test in the USSR.

In an effort to construct a more accurate picture of what was going on in the Soviet Union and to better anticipate developments there, analysts in the United States focused much of their efforts on what were known as National Intelligence Estimates (NIEs). These were strategic assessments of major, long-term trends in important issues, such as Soviet weapons. The estimates were based on all available reporting and were written periodically to provide updates on significant issues. Ad hoc estimates were also prepared on other issues, as needed.

During the cold war, the soviet union, and above all its arsenal of strategic nuclear weapons, was the top priority for intelligence analysts around the world, and especially in the United States. Over the years, the Central Intelligence Agency (CIA) and the many other agencies of the U.S. intelligence community had built up a vast system of satellites, listening posts, aircraft, ships, and other means to collect information in an effort to accurately assess the Soviet threat.

CIA analysis of the USSR in the 1980s tended to focus on military issues and generally saw the country as likely to be a major threat for some time to come. An April 1981 assessment, for example, considered a number of possible scenarios for the future, but postulated that it was most likely that the Soviet defense buildup of the 1960s and 1970s would continue:

Fortunately, there have been only a few examples of chemical and biological agents being used by terrorists. The impact after an attack using such agents could be readily envisioned and would be horrific. What indicators would analysts and law enforcement officials be looking for to provide warning before an incident took place? This problem would be especially difficult the first time an assault using weapons of mass destruction was carried out, when there were no precedents. Although they did not realize it at first, this was the challenge that Japanese police faced in the mid-1990s.

Shoko Asahara (1955–) was an ambitious, poor boy from rural Japan who was frustrated that society did not recognize his abilities. He became a practitioner of alternative medicine in Tokyo and, in 1984, founded Aum Shinrikyo. The first part of the name derived from the Sanskrit word that Hindu mystics used in meditation, and the second part is Japanese for “supreme truth.” Asahara spliced together fragments from Buddhism, Hinduism, Christianity, and even the sixteenth-century French prophet Nostradamus into a new age doctrine that promised enlightenment and supernatural powers. Aum Shinrikyo quickly became a cult that found some resonance as an alternative to the prevailing Japanese culture and lifestyle. Within a decade, the group had approximately 10,000 members, including many well-educated professionals such as lawyers, engineers, and scientists, as well as government officials and members of the armed forces and police.

Like commanders for centuries before, general george Washington (1732–99) served as his own intelligence officer. Although he had no formal training in intelligence, Washington developed an impressive understanding of how to use information to assist decision making. Because he was the leader of the weaker force, it was in his interest to place a high value during the War of Independence on many aspects of intelligence, including espionage, counterintelligence, and analysis.

Assisted by only a few close aides, Washington personally organized the work of those who could bring him useful information. He employed the traditional uniformed scouts who operated more or less openly. He himself had performed this task during the French and Indian War. As commander, he also selected soldiers for short-term clandestine missions behind enemy lines, such Nathan Hale (1755–76), whose first mission ended in disaster. Finally, Washington recruited civilians to remain in place for long-term missions, such as the Culper Ring in New York City. When relaying to his agents what he needed to make decisions, he typically asked detailed questions and gave precise guidance.

Washington's correspondence has numerous references to intelligence matters, and, like many other commanders, he appreciated the importance of speed, accuracy, and secrecy in delivering reports.

Stopping proliferation of nuclear weapons, especially to unstable countries or terrorist groups, has been a major concern of governments. Because of their extreme danger, it is illegal under international treaties to sell or transport materials associated with nuclear weapons. However small the chance of misusing nuclear weapons, the potential damage is so great that the risk cannot be ignored. Therefore, how to understand and thwart anyone who would try to evade the restrictions on nuclear technology is a high priority for intelligence analysts.

In the early 1970s, Abdul Qadeer Khan (1936–), a metallurgist from Pakistan, was working in the Netherlands when the Pakistani government announced that it was determined to acquire nuclear weapons in an effort to achieve deterrence and strategic equality when dealing with its giant rival, India. Pakistan had just lost another war with India, which had led to the dismemberment of the country and the founding of the independent state of Bangladesh. As it turned out, the company for which Khan worked enriched uranium into fuel for reactors, a technology that could also be used to produce nuclear weapons.

In September 1974, Khan wrote a letter to the Pakistani government offering to help in the development of a nuclear weapon. Islamabad accepted his proposal, and before departing for home Khan stole or copied a large number of blueprints for equipment that could be used to enrich uranium.

President saddam hussein of iraq (1937–2006) was a brutal and aggressive tyrant in a volatile part of the world. After the terrorist attacks of September 11, 2001, decision makers in Washington and London were especially concerned that Saddam had weapons of mass destruction, which he might use himself or give to terrorists. Saddam's record showed that there was cause for concern. In 1981, Israel had bombed the Osirak reactor at Tuwaitha out of concern that it could be used to produce materials for nuclear weapons. It was well documented that the Iraqi government had chemical weapons and that it had used them against the Kurdish minority in March 1988 and on numerous occasions during the war with Iran in the 1980s. Moreover, after the First Gulf War in 1991, investigators found that, because of successful denial and deception operations, Iraq had been able to conduct biological weapons programs of which the U.S. intelligence agencies had not been aware and to push forward a nuclear weapons program that was much further advanced than had been suspected. In the years that followed, United Nations (UN) teams caught Iraqi officials in the act of moving sensitive equipment, personnel, and documents around to avoid inspections.

In the wake of the 9/11 attacks, there was widespread concern that economic sanctions and UN inspections might not be enough to keep Iraq from pushing ahead with its weapons-of-mass-destruction programs.

At 6:02 p.m. on wednesday, october 2, 2002, a 55-year-old white man who worked for the federal government was shot to death with a high-powered rifle in the parking lot of a grocery store in Glenmont, Maryland, just north of Washington, DC. A police station was just across the street from the scene of the crime, and an investigation began immediately. The police found a witness who remembered seeing two African-American males in a large, dark car leaving the scene, but there was no other information with enough detail to be useful.

The following day, the investigation became much more urgent when five more individuals were shot and killed in the Maryland suburbs north of the capital city using the same modus operandi – a high-powered rifle fired from a distant, unknown location. The victims were a mixture of age, gender, ethnicity, and occupation. All of the attacks took place outside, but they were at various types of locations including a car dealership, two gas stations, and a shopping mall. Witnesses provided no precise information about a possible perpetrator, but an individual did report seeing a white box truck speeding away from the scene shortly after one of the incidents. Again, there was no other evidence at the scene that was helpful.

What kinds of questions and analytic frameworks would help in catching the perpetrator as quickly as possible and preventing further killings?

Virtually every modern society, no matter how prosperous, structured, or even authoritarian, has organized crime. This is true in countries such as Britain and France, but also in Russia and China. There always seems to be individuals who for whatever reason – poverty, discrimination, lack of skills, or perhaps just a shortage of patience – cannot fit into normal organizations, relationships, and careers. They turn to crime. These individuals get money and power from the formal society, along with acceptance and respect from their criminal colleagues. The key to their success is to provide what is missing or forbidden, such as drugs, prostitutes, or gambling. They then protect themselves through corruption, deception, intimidation, and murder and become even more successful by organizing on a large scale.

In the Western world, one way that organized crime came about began in rural Sicily in the nineteenth century. With the Italian government distant, ineffective, and unresponsive, private organizations grew up to provide protection and settle disputes. A parallel, unofficial society emerged, which came to be known as the mafia. Mafia organizations were reinforced by family ties, and they provided honor and respect for their members. They also protected themselves through secrecy and violence. Over time, it was natural for the mafias to become involved in organized crime, which became extremely lucrative.

In twentieth-century United States the atmosphere was better, but immigrants were still subject to discrimination and often found it hard to achieve the American Dream through legitimate channels.

The rivalry between the united states and the ussr dominated the last half of the twentieth century, but there were other problems. The rest of the world had its own difficulties in dealing with issues such as modernization, as well as age-old disputes over land. Seeing such issues through a Cold War prism could sometimes lead to seriously misunderstanding them.

Many of these problems involved classic military issues of surprise and deception and the impact of new technology. Intelligence analysts also were grappling, however, with newer predicaments, such as limiting the proliferation of nuclear weapons and assuring the flow of energy to industrialized economies.

There was also a sense that history was speeding up – events were unfolding at an accelerating pace. The gap between developed countries and the rest of the world was widening, as was the potential for major revolutions, discontinuities, and changes in traditional trends and patterns. Islamic fundamentalists responded to these changes and were willing to use terrorism to promote their agenda.

One of the main characteristics of the contemporary world is globalization, or that things all over the planet are connected in ways that might not be obvious at first and that offer both danger and opportunity.

Effective analytic techniques are useful not only in national security and law enforcement. Medical diagnosis and deciding what to prescribe, for example, are based on hypotheses, multiple sources of information, and evaluation of data, as well as the physician's skill and experience. The risks of misdiagnosis, as well as inappropriate medicines and procedures, also have to be taken into account. Physicians readily admit that this process is as much art as science, with intuition playing a major role.

In the business world, reliable information and context about factors such as supply and demand in the present and the future have always been important for the bottom line. Business functions such as market research, risk analysis, and protecting against industrial espionage have parallels in national security analysis. The implications of technological change are also a major concern. Companies, it turns out, can be as susceptible to surprise and uncertainty as are political leaders or military commanders, as demonstrated in the global economic crisis of 2008.

Although analysts working in national security, law enforcement, medicine, and business have much to learn from each other, there are also important differences.