The Myths and Mechanics of Innovation

Innovation is the new watchword in education. The President has called for more of it. His administration is pumping literally billions of dollars into it. And you as educators, administrators, and technologists are charged with doing it. But how much do we know about it? Do we even grasp what it is? How can it be achieved? And on the off chance we manage to accomplish it, will we ever be able do it again?

Innovation is an abstraction to many of us, a word vaguely hinting at something new and good arising through inspired creativity, some invention born of "outside the box" thinking. But that perception--and the approach to innovation that it implies--is just one of the many reasons most of us fail at it.

For Larry Keeley, though, innovation is a mechanical thing, a device that can be reverse-engineered, studied, and reproduced successfully and somewhat consistently--provided those attempting to do so are willing to slough off the common misconceptions about it and approach it from the proper trajectory.

Keeley has, for more than three decades, made a study and a career of innovation. BusinessWeek described him as "one of a handful of people who are inventing a new science of innovation." He's the co-founder of professional advisory firm Doblin, where, among other things, he works with enterprises across a wide range of industries to help them develop effective approaches to innovation. And he lectures on the topic of innovation at business schools and at the Institute of Design of the Illinois Institute of Technology in Chicago.

In short, Keeley knows something about innovation.

And now he's bringing that knowledge to education. This week he's delivering the opening keynote address at CoSN Conference 2010, the annual meeting of the Consortium for School Networking, one of the major policy and advocacy groups focused on education technology.

What Keeley has to say to education on the topic of innovation is, in a word, important--important given the emphasis on innovation in federal funding programs; important given the urgency with which it's being demanded of school systems; important given the radical changes that are occurring in education and the resources being thrown at them; and important given that pretty much all of us have it wrong, at least if I'm understanding Keeley correctly, which, granted, I may not.

THE Journal recently had a chance to talk to Keeley about the object of his life's work. In our discussion, he shared some startling revelations about innovation--including the startling fact that attempts at it fail pretty much all the time owing, in part, to the other startling fact that pretty much nobody knows what it is or how to make it happen.

How are we getting it wrong? More importantly, how can we get it right?

David Nagel: There's an interesting note in your online biography that says you often wonder "why people bother to listen to innovation 'experts' at all, since innovation fails about 96% of the time." What do you mean by that?

Larry Keeley: Whenever an enterprise commits itself to doing something unfamiliar to that enterprise, in an overwhelmingly high frequency, they fail to return the cost of capital of the enterprise as they try to do that new thing.

Nagel: I see.

Keeley: So whatever it costs you to try to do something new and however long it takes you, more often than not, innovation causes you to lose money instead of make money.

That is, of course, Dave, the really bad news. The good news, however well disguised, is that if you stop doing the things that don't work, and you start doing a handful of things that demonstrably do work, you can quickly flip that around.

So among organizations that are not innovating in old-fashioned, out-of-date, discredited ways, a reasonable baseline is that 35 percent of your innovation efforts should succeed.

At this moment, the highest anybody is achieving routinely is about 82 percent of innovation initiatives are succeeding.

Nagel: Okay, that raises a lot of questions. I guess, first of all, what are the out-of date ways of innovating?

Keeley: Creativity enhancement; brainstorming; generally stage-gate processes, in particular just the whole idea of sticking a bunch of smart people in a room and saying, "Okay, innovate now"--as opposed to their regularly scheduled life.

[This] tends to produce a large number of possible projects. Usually people in such processes, Dave, are encouraged to "think outside the box" and try to generate really exotic ideas, which massively accentuates the probability that they won't be executed or executable.

Nagel: Okay, even though you're on the phone, I could practically see the air quotes you were making around "think outside the box."

Keeley: Yeah, sure.

Nagel: And so are you talking about the approach where the leaders are having their people go into a room and innovate, as you say?

Keeley: I'm talking about a great many things that are all jumbled together that I collectively call the "myths of innovation"--what it is, where it comes from, how we generate it, why we don't get it today. All these things are plagued with a large number of myths.

Nagel: Okay. I'd actually like to get into those, but first, who is achieving the 82 percent success you mentioned, and how are they doing it?

Keeley: Companies like General Electric; Target; to a certain extent Apple; venture capital firms, a few of them, like Kleiner Perkins; Google until recently; Pixar in particular: [All] are examples of people who are routinely achieving innovation at the high end.

Nagel: And how are they doing that?

Keeley: Well, it's a longer answer than a crisp bullet point. But the most important thing is that these are generally firms that have started to build a conscious innovation competence, and they've rooted out the myths more or less systematically.

One of the ways to understand this, Dave, is to realize that innovation used to be kind of a vague hope, and now it's emerging as a deep science. When I teach it in business schools, I like to say innovation as a topic is finally, for the first time in the history of our species, giving up its secrets. And we can turn it from a black box that doesn't work very reliably to a glass box where we can understand the mechanisms.

And once you understand those mechanisms, then the simple issue is: How conscious are your leaders about knowing what works? How willing are they to stop doing the things that people believe in and start doing instead the things that clearly make a difference? You know, I get the greatest return on investment if I stop doing the nonsensical things.

Nagel: And that means a lot of different things in a lot of different ways, depending on the situation, I'd imagine. I'm wondering what that means in terms of education.

Keeley: Education is a particularly difficult case for innovation. And the reason is that by and large every district, every school, every classroom tends to be averse to innovation until there's proven efficacy in lost of other places.

So you end up with … multiple layers of dysfunctionality. At one layer there's political dysfunctionality. At another level of dysfunctionality you get all kinds of problems in the way education tends to be funded and in the strategic degrees of freedom within the district or within an individual school system about how those funds are indeed allocated. And then, beneath that, there [are] all kinds of dysfunctionalities imposed on the rules and the meaningful unit of action.

So, if a state board determines what textbooks are going to be used, is that really the right answer? What we'd like to believe is that we have extraordinarily talented teachers and that we would trust the talent and that the talent would have the freedom to decide what's working with their students. What we'd like further is to believe those individual teachers are given an enormous amount of insight routinely about what kinds of innovations are emerging elsewhere in the world or in the system that they could be learning from and adapting.

And what we get, Dave, is none of those things. We get a relatively inflexible, top-down approach to trying to tell people what to do, combined with a relatively rigid set of tests that we're supposed to drive performance in. I'm not totally opposed to the tests per se. The one virtue of No Child Left Behind is that we have begun to accept the idea of accountability broadly.

But, if you compare the world of education to the ideal world of innovation inside of enterprises, there's a radically different … let's just call it "topology."

The topology of innovation is to try to move as much authority and freedom down and closer to the place where the individuals are encountering the sort of moments of truth.

And what we have in general in education is the exact opposite pattern, where too much of the decision making authority tends to be at the top; the decision-making processes are way too slow; the budgets are completely inadequate; and the consequences for failure are disproportionately applied to the individuals that tend to have the lowest degrees of strategic freedom.

Nagel: You mentioned the "myths of innovation." I imagine those will be the major portion of your discussion at CoSN.

Keeley: It will be the first of three basic topics I address, the one that says basically there's a bunch of innovation fundamentals. We all ought to know them; we all ought to use them.

Nagel: Could you talk about that here?

Keeley: Basically what I do when I talk about innovation fundamentals is I make fun of the standard practices that people do--you know, run around the cubicles, thump everybody on the head, pick the ones that sound right, and stick them in a room and say, "Okay, innovate now"; mention offhand that the last five, six, seven times we tried to innovate was pretty crash and burn, and people lost their jobs; but this time we're really serious about it, and we're really counting on you guys to solve it.

This is a very standard way that innovation is perceived, Dave. So I will talk instead about the basic things that work.

First off, it's not about creativity. It is specifically not about generating lots and lots of ideas. It's specifically not about thinking outside the box and generating a lot of exotic ideas.

[It's] simple things, like understanding what you're already good at in your district, in your state, in your school system and using that as the building blocks for breakthroughs; the creation of much more modularity and a culture of performance attached to metrics so that we know what's working, and that gives us a chance to try more things.

I will specifically introduce something that virtually all of our clients cite as radically altering forever their sense of possibilities about innovation. And that's our relatively well known framework. You can find it on our Web site. It's called "The Ten Types of Innovation." This is a handy way to guide people in creating more sophisticated, bolder ideas.

So, where the basic way to innovate is to generate new products, our data demonstrably proves that it's the least valuable way to innovate. It's the most easily copied; it's the least likely to be distinctive; it's the least likely to be profitable; et cetera, et cetera.

So, "The Ten Types of Innovation," when you use them well, Dave, achieve one really crucial outcome, which is to help people to generate a smaller number of bigger ideas, and that is highly correlated with much bigger return on investment for innovation.

What normally people do in "brainstorming sessions" is they generate a large number of little ideas. The idea of a good innovation system is that it helps you to concentrate your firepower, your scarce resources, on a smaller number of bigger ideas.

So that's the general lesson of the first module that I'll be doing at CoSN.

Nagel: There's an easy way to measure the success of what you're talking about in business in that you're going to make money at what you do, right? Or am I wrong?

Keeley: Yes.

Nagel: And in education, there's another problem because even when you talk about accountability, you're talking about….

Keeley: Yes, you're absolutely right, and you're going to a useful place, which is the utter ambiguity and frankly political nature of what we agree upon would be progress. Right?

Nagel: Exactly.

Keeley: I completely understand that. On the other hand, there is a growing recognition, including Arne Duncan's proclamations, about what they're going to be using as their major drivers of progress.

We can agree or disagree about whether or not those are the right things for us to be measuring, but at least there is some declaration about what it is we're going to be trying to pursue. I'm going to not challenge that construct other than to just say, "Let's pretend that we all agree on this." (I know that's a big stretch in modern political systems.) And let's talk about the kinds of consequences that might have for how we will behave.

Nagel: Sure. Not to belabor it, but the other consideration is, even if we all agree on it now, is it going to last past this first administration of President Obama?

Keeley: Absolutely right. That's again one of the basic issues. How stable are these constructs? When and how should we challenge them? How frequently should we revisit them? How do we deliver on them? But I don't want to go to that level of declaration, of breakdown, because nobody in the room at CoSN will really have the ability to address that. Let's see if we can be pragmatic about helping people to manage well the things that they have some authority to impact.

Nagel: But they will have the ability to lobby for policies that could help stabilize things, if those policies could be articulated.

Keeley: Sure. That's just something that I'm just going to finesse away by saying: Look, from time to time, the overall goals will change, no matter what they are, even if you choose to make them different in your district, your school, your single classroom, [from] the national norms that are emerging at any given moment. Here's how you take them seriously and help to achieve them.

My whole world, Dave, is highly specialized. What I'm known for is achieving innovation effectiveness. So I don't want to add the additional dimension of, look, the goals are wiggly, unclear, and unstable; politically contrived; and subject to random and continual change.

Even though all those things are true, I simply want to say: Pick a goal, whatever it is, and let's talk about how you drive toward it with skill, with purpose, and with efficacy.

Nagel: What do you think is the recipe for guaranteed failure when an organization like a school or district is trying to be innovative?

Keeley: Be grandiose; try to enhance everybody's creativity; assume that individual teachers should generate lots of incremental project ideas; have no discretionary budgets whatsoever; have no metrics that we know how to define or measure--let's see, how else can I stress test an average system?--make sure that the people setting the goals never, ever meet or talk to the people executing the programs; absolutely be eager to set the goals at the highest possible levels, state and national levels, with no regard whatsoever for the fact that, gee, those might have to be interpreted slightly differently in [for example] Ottumwa, IA, which has one of the most literate districts in the world, versus some portions of Alabama or Mississippi or West Virginia.

And other things like that are pretty much going to guarantee disastrous results.

Nagel: Okay. Do you have one or two things you could share that would help minimize the chances of failure?

Keeley: Let me say two things. Let me talk at a very granular, very specific level, the kind of thing we can do more or less instantaneously and have it enhance nearly everybody's attempt to innovate.

One thing we could do is to simply start to create richer varieties of curricula and different ways to teach existing topics. Let's just think of that as extreme modularity, Dave: If we could do that in an open way so that it was like an iTunes music store for teaching materials, and those things were created in a way that allowed individual teachers, who really are the most important element in the system for innovating, to succeed as their modules are adopted by more and more users.

Let me tell the story slightly longer. Just imagine that I'm a fifth-grade teacher in Detroit, MI, and I've busted my ass for many years to learn how to teach fractions to a bunch of kids who really do not give a rat's ass about fractions. Let's imagine further that I've figured out that the way to do that is by generating rap songs that teach fractions, and that it works absolutely brilliantly. What would be ideal is if I could package that, and if it was available to other teachers and other regions, and if it was subjected to a rating system, and if I did further work to do a video showing how it works and produce a teacher's kit giving teachers advice and counsel about how best to do it, wouldn't it be nice if, let's say, on May 30 every year, surprise, surprise, what arrives in my mailbox is a royalty check of, let's say, $25,000 that just is the collected royalties for the huge number of districts elsewhere in the world that have discovered that this is really an advance. And this helps me to have a wonderful summer, and it completely changes my sense of purpose, and it completely reinvigorates my commitment to teaching, and it augments my entirely decimated retirement fund that the state of Michigan is probably stealing and underfunding and mismanaging.

So that's a good outcome. And that would be an ideal thing. Let's take the talent of teachers and turn it into an accessible set of modules.

Are you with me so far?

Nagel: I am. I have to laugh because I've seen the videos you're talking about on TeacherTube.

Keeley: Yeah, there's a bunch of them, and this is not a particularly novel idea.

Nagel: Sure.

Keeley: Now let's talk about the most radical and, to a large extent, unthinkable change. The unthinkable change, the one thing that would make the biggest difference, is the idea of giving up grade levels. It's a really bad, out of date anachronism to say that we really want to march all the second graders to third grade, or at least as many of them as we possibly can.

Those things are arbitrary, as you know, Dave, and probably we'd be better off just identifying modules of things that somebody has to master. Some of the better educational laboratories in the country claim to have done that; some are going so far as to say, "Well, for a 21st century education, you have to master 571 concepts in mathematics." I'm here to tell you that I haven't the vaguest clue--and I bet you don't either--how many of those supposed 571 areas of expertise you personally have mastered, Dave; I don't have a clue how many I have mastered.

But, you know, even though I did fine in school and took an awful lot of it, my guess is I could use a brush-up in, let's say, 70 of the 571 concepts. Maybe that number's high; maybe it's low. I don't know because I don't know the modules. And in any event, what would be a gift to the whole world is to be able to say, "This is stuff you gotta know."

I don't know if you've seen it or not, but one of the things I find reasonably interesting is Khan Academy.

All this is by one guy ... who's decided to produce things that are about four or five minutes at a time, and he's done it in the most trivial possible way, of using Microsoft Draw as a blackboard and his own voice to try to tell you lessons. But he's atomized in a really fairly profound way....

But the idea of giving up grade levels in favor of saying, "This is what you have to learn, and here's a likely progression--a sequence that we think most people learn it in most comfortably--and for each of those things that you have to learn, we're going to allow you to work either individually or in teams and with a whole bunch of available different tools and different games and different ways to master those modules": That's the radical shift; that's the one that moves the responsibility for education increasingly to individuals....

The value of ... asking what would be radical is that it helps to point out the orthodoxies and the silly assumptions that are baked into what we do now.

Nagel: Do you find that it gets people frustrated also when they're in a situation like education where so many people who are so instrumental in everything that happens have so little say in what happens?

Keeley: Absolutely, and as it should. It would be the same exact thing if we never trusted anybody in the military, if we constantly, no matter what fight somebody was in, sent them specific messages from the Pentagon, and they couldn't do anything, couldn't shoot a single bullet until the Pentagon sent them a message. It's just ridiculous. That's what I meant when I was talking about the topology of innovation is all messed up. We don't trust the talent.

Nagel: What industry can education look to for a model that relates somewhat to what they're doing and their circumstances where they could learn something about how to innovate in a way that's more successful than what they're doing?

Keeley: Venture capitalists have historically achieved a rate of innovation success that is four to five times the global norm. Venture capitalists get a success rate that hovers around 20 percent, where the global average is 4 percent. I'm talking about the very best five venture capital firms in the world. And so I spent a long time, Dave, going to those guys and saying, "Well, how come you're so great at innovation?" And naturally their conclusion was because they're geniuses. And I said, "Yeah, yeah, yeah, but show me specifically what you do and how you do it" because I'm always skeptical about the argument that our people are simply better than other people's people. (Any organization that's bigger than 1,200 people, that's no longer statistically true ever.)

It turns out there are two things that materially change the success rate of venture capital firms and offer up news we can use and lessons we can steal.

No. 1 is deal flow. Whereas the average corporation, even a fairly large corporation, rarely looks at more than one to five new business concepts a month, the average high-end venture capital firm looks at as many as 5,000 new ideas a month. So when you see that many new ideas, you're being what's called "in the deal flow." So the idea that we would just look at more variations of teaching ideas would help a lot.

And the second thing that is actually interesting relates to every cliche meeting you've ever attended, Dave. How many times have you sat in a meeting where after the end of a large amount of effort some supposed leader in the room says, "Yeah, well this is great, sure appreciate the energy, sure appreciate everybody's contributions, now let's make sure we look for the low-hanging fruit."

Nagel: That specific one I've never encountered.

Keeley: Oh, you're kidding me. You've got to get out more often.

That cliche is really routine in the world of anybody trying to do something new. What it means is, yes, there [are] many ideas here, now find me the easy ones that we can succeed with early on. Well, guess what. Venture capital firms do the opposite. What they look for is the hardest bits they have to get right as they try to do something truly new. So they don't ever listen for the things that are easy. They listen for the things that are hard.

In that same sense, what I think happens in lots of educational systems is people try to make progress by doing something different, finessing away the parts of what they're trying to do that are going to bump up against real failure modes, real breakdown. "Oh, we simply don't have the authority to do anything other than this textbook. We simply don't have the authority to use some other test than this test that we've been handed."

So what's important is not to look for the easy pathway to progress as you're trying to do innovation, but to manage for the things that are hard, rare, and exceptional.

Nagel: I think that bears more explanation.

Keeley: If you want to do a quality improvement program [as differentiated from an innovation initiative], you look for low-hanging fruit. What are the things we do routinely? Everyday in the cafeteria we serve all these foods. How can we serve these foods so we have less waste? Or, how can we serve these foods so they're marginally more healthy? How can we serve these foods so we don't count ketchup as a vegetable? Those are all improvements. An improvement in a known system lends itself to low-hanging fruit: Find me a few things we do routinely that we can improve upon.

What innovation demands is the opposite way of thinking. Again, a counter-intuitive, little-known principle, Dave, that basically says: What are the hardest bits that we would have to get right if we wanted to create a completely different system capable of producing completely different outcomes?

I'm trying to set up, if you will, a dichotomy between the things one might do to improve the known versus the things one might do to create the new.

Nagel: I'm afraid to ask because it's very complex, but what are those things for education?

Keeley: I think we can think about a variety of things that one might do to improve the known. And that, to a very large extent, is what you're seeing most districts do with their scarce and usually declining budgets and their rigid and usually more intrusive testing. They're caught in a pincer, a vise, where they have to do more with less all the time. That gives them a world of fairly steady improvement in performance, and it tends to--at least in my mind--sort of say, okay, what can we learn from the quality revolution, which corporations embraced 16 years ago, and is there a way we can sort of quickly adapt those lessons?

And of course there are many ways, and I'm not going to give you a little treatise on quality improvement programs….

… Across the entire United States educational system, where we try to do something new, a reasonable guess is that 92 percent of the things that we do that are new should be improvements to the known.

Eight percent of the time it should be the Monty Python school of innovating. "And now for something completely different." What are we going to do in the places where we have more strategic degrees of freedom and we can think more boldly?

And that's where quality improvement programs and slightly improved operational disciplines in fact, counter-intuitively and unavoidably, do not help and may actively harm the innovation efforts. So if I'm really, really good at improvement--steady process improvement--oddly enough that tends to be negatively correlated with skills in primary innovation.

Nagel: That is a lot to digest.

Larry Keeley is presenting his opening keynote address at the CoSN Conference 2010 event Monday, March 1 at 3:30 p.m. EST. He said he is hoping to be able to answer questions there. Further information can be found here.