Category: Process and Change Facilitation

Changing how a problem is framed can describe who can contribute and what success would look like

The way a problem is described often reveals what kind of expertise is required to solve it. It can also indicate whose issue it is and what resources are presumed to be needed. Experts might describe problems in ways that are hard for most people to understand, creating a sense of alienation or distance from issues that could be crucial for individuals to tackle. Many important problems, like climate change, water insecurity, or human trafficking, are presented in ways that disempower ordinary citizens.

Why is it important to frame or reframe a situation?

As process facilitators, we need to intervene and help interested or affected ecosystems or interest groups frame the problem in a way that enables them to take action, contribute what they can, and exercise their individual or collective agency in the situation. Otherwise, ecosystems and interested citizens are reduced to beneficiaries or mere spectators.

Donald Schön, a prominent thinker in process consulting, characterised framing as “the way practitioners define and interpret a situation, influencing their understanding of the problem, the relevant factors, and the potential solutions.”

Framing a problem is not only about making it more likely that novel solutions are generated because more people understand the problem. The process of reframing a problem also forces people to confront a problem and how it permeates or persists in their context or surroundings. It nurtures a deeper understanding of how an everyday problem affects others in our communities, and thus reframing enables collective action, joint learning and the strengthening of trust.

How we frame a problem significantly influences who can contribute to solving it and what success might entail.

Finally, when we can reframe a problem in a more open way, everyone who engages in understanding the problem or in contributing potential solutions becomes a co-innovator. Contributing to problem-solving builds confidence and gives hope, as it restores agency and builds social ties across social spheres.

What is wrong with how problems are usually framed?

Before discussing how to reframe a problem or a situation, I want to explain why the way we describe problems can sometimes be problematic.

  • A frequent challenge in problem framing is that descriptions are often too general. While individuals can identify symptoms, they frequently miss how the underlying causes or structural factors interact in a particular context. For example, although the effects of unemployment are straightforward to recognise, the underlying causes and potential solutions vary greatly depending on the situation.
  • Problem descriptions often implicitly favour a specific action or blame a particular actor. This is common when the problem is overly simplified or when the underlying causes are assumed to be more direct or straightforward than they are.
  • It can also serve as a method to transfer responsibility to another person.

How can we reframe a problem or a situation?

Now, let’s return to how we can alter the problem’s framing.

If urgent issues stay unresolved by stakeholders or earlier efforts haven’t yielded results, it could mean the problem isn’t effectively framed within the current context. The way the problem is presented might also be unappealing, discouraging individuals from engaging or contributing to a solution. It might also sound like someone else’s issue or a problem that demands specific expertise to fix.

Sometimes, we become so accustomed to problems that we see them as simply part of the environment we move through. We avoid confronting the issue and instead find workarounds that often come at a high cost or cause great inconvenience. The reality is that those with fewer alternatives tend to expend more effort and resources on workarounds, while those with more resources could perhaps switch to substitute solutions.

When people become familiar with long-standing problems, it may seem as if they need approval to challenge the status quo, because the common framings do not invite their input or interest. This is especially likely to happen when problems become the rallying cry of politicians who promise that they will get somebody to solve these problems on behalf of citizens.

What is framing?

Framing extends beyond simply rephrasing the problem. It involves dedicating time to thoroughly understand the problem space and the underlying structures that sustain patterns, even when they cause pain and inconvenience. Furthermore, framing is seldom a solo activity; it typically requires a group with varied experiences of the problem to collaborate, developing a shared understanding of the issue, its impacts, and frameworks.

Steve Jobs quoted in Newsweek, 2006

Marvin Minsky, an early AI pioneer, emphasised that understanding involves viewing the problem from multiple perspectives, allowing different permutations or representations to be detailed as fully as possible. Essentially, this means forming a multidimensional understanding of the problem and its structure. With this deeper insight, identifying potential solutions in a particular context becomes easier. Moreover, involving more people in understanding the problem, its causes, and effects enables better contributions to solving it.

Einstein argued that “The formulation of a problem is often more essential than its solution, which may be merely a matter of mathematical or experimental skill”.

I often cite a quote attributed to Albert Einstein: “If I had an hour to solve a problem, I would spend 55 minutes thinking about the problem and five minutes thinking about solutions.”

How to reframe

Here are suggestions on how a problem, situation or opportunity can be better framed:

  • Gather a small, diverse group of stakeholders representing different perspectives or interests to help describe the problem from multiple viewpoints. Ask “how do different people experience this problem?” or “why do different people see this as an issue?” Revise the framing to include these varied perspectives and the consequences of failing to resolve the problem.
  • Describe the problem in a way that clearly shows it is a shared issue that matters in our context, and that we (as a group, not just the experts or those directly affected) collectively take responsibility for this problem within our sphere of influence.
  • If the group doubts their ability to reframe or resolve the problem, challenge them to describe the issue, why it persists, and who it impacts in at least three different ways. If they struggle to do this, it may suggest that perspectives or experiences from diverse backgrounds should be invited to join the effort. This way, the original group might also learn from the perspectives of the newly invited contributors.
  • Identify whether there are people in the system who have already framed the situation to their own advantage. When individuals benefit from a problem, they might not be eager to see it resolved. When actors benefit from a problem, you must consider their influence in undermining any solutions that could affect their interests. Is there any way we can frame the problem in a way that might also benefit those who are benefiting from the current situation, to ensure they support the solutions?
  • When describing the situation, avoid placing blame or favouring certain solutions. Instead, keep the options for solutions open so that more people feel like they can contribute in their own way.
  • If you sense that the problem is complex or messy, then formulate a description of the problem that allows for multiple safe-to-fail probes to be tried. These attempts should be carefully observed to see whether any had a positive or perhaps negative effect on the situation. These small efforts are not so much about solving the problem as about seeing whether we have any influence on the situation.
  • Treat any explanations of possible causes or solutions as “first cut” understandings or hypotheses. Encourage participants to develop “low-cost tests” to minimise the costs of testing and to reduce the risk of making things worse.
  • Lastly, agree on what success would look like. If success is hard to measure, or if the people affected by the problem cannot see the difference, then the interventions might be successfully implemented, but the problem may remain. Or worse, the original problem might be replaced by several new problems that require new solutions.

I leave the final word to Donald Schön, who argues that “Framing is not a static process but rather a dynamic one, involving continuous reframing as the situation unfolds and new information emerges.”

If you use this blog to reframe a problem in your ecosystem or network and get stuck, reach out to the weaver community or to us. Sometimes, some distance from the problem situation may make it easier to ask the naïve questions that may be needed.

This article was written with inputs from Bronwyn James from PNC and Nikolaos Archontis. It was published originally on www.mesopartner.com as a contribution to the GIZ IYBA-SEED project implementation.

Weaving entrepreneurial innovation ecosystems in South Africa

In the second half of 2024, Annelien and I were awarded a contract to mobilise, equip and support facilitators who weave together entrepreneurial innovation ecosystems in South Africa. We were subcontracted by the EU-funded IYBA SEED programme through GIZ in SA. This project allowed us to consolidate many of the methods we developed over the last twenty years. In addition, we could improve the designs of many of our templates and supporting materials. We could also work with our long-standing colleague Nigel Gwynne-Evans, who is known for his work on entrepreneurial ecosystems, clusters, and sector development.

Our approach to promoting entrepreneurial innovation ecosystems is based on the Mesopartner Annual Reflection 2021-2022 article Fostering Dynamic Entrepreneurial Innovation Ecosystems.

Some background

The political discourse in South Africa is shifting in the right direction. There is more debate and a contest for alternative development ideas. This may sometimes feel unsettling, but the monopoly over debate has been broken. The timing is perfect for mobilising change agents, community-based organisations, local development organisations, businesses and the public sector to foster the bottom-up improvement of different entrepreneurial innovation ecosystems. 

Here are some of the important shifts in the South African economic landscape:

  • During the 2024 national elections, the most dominant political party lost its majority. It had to form a coalition with its opposition. With its majority, it also lost its dominance over the political discourse of ways to improve the economy.
  • Many of our institutions, key infrastructure, and local economies have declined and lack investment and a complete rethink.
  • There is mounting pressure on the public sector to curb wasteful expenditures and to improve public services and infrastructure. 
  • Finally, the increased oversight by opposition parties, the courts, and civil society has increased the pressure on public sector decision-makers to be more careful about implementing their programmes. 

What we have done in the last few months

Our first task in our project was to identify and engage with individuals and organisations already facilitating and promoting entrepreneurial ecosystems, even if they did not call it that. With the IYBA SEED country team, we organised three training events in Gauteng, Western Cape, and KwaZulu-Natal. Over three days, we guided the participants through various thinking frameworks that helped them assess their ecosystems and identify starting points for their homegrown (or ecosystem-grown) improvement processes. 

We challenged the weavers not to pursue an ideal ecosystem based on a normative framework that assumes everyone has the exact same needs. Instead, we argued that weavers should identify strengths and then mobilise their networks to innovate unconventionally to strengthen their ecosystems’ gaps. Our emphasis was on learning what is possible and building networks of individuals and organisations that, in pursuing their interests, also build the dynamism of the larger ecosystem. On the final day of the training, we showed the weavers how to identify potential starting points to establish coalitions for change around identified issues. 

It was not only our trainees who learned during this process. We also learned. Firstly, repeating the same event thrice in different parts of the country was extremely valuable. We could learn much quicker how to explain essential concepts and exercises. Secondly, we also learned how the three regions were different. We learned from the wisdom of several champions who have been organically weaving networks over extended periods. It was rewarding to see how our frameworks resonated with them and helped them reflect on what they were doing. We heard the most amazing stories from all over our country about how networks of entrepreneurs, public officials, local or community organisations and international funders had innovated together. 

Lastly, we spoke to and even met up with old friends, who have taken slightly different paths. And now we ended up back where we started, in local spaces where our biggest asset is the resourcefulness and interdependence of local stakeholders.

Over the next year, we will continue to support the implementation of IYBA SEED in SA and the weavers in this process. In addition, we will identify and document inspirational practices and examples of how ecosystem actors have improved not only the dynamism of their networks but also where thriving ecosystems have resulted in improved public services and infrastructure and inward investment by the private sector into areas that have been starved of innovation and funding.

Identifying firms to work with to induce upgrading of industries

This is a revised edition of a blog post I wrote back in 2011.

When working on the improvement of innovation systems in developing countries, we have to work with firms. These firms have several roles, and there are three units of analysis:

  1. The firm is an important unit of analysis of innovative practices (product, process, business model).
  2. The firm is also a unit of analysis in terms of cooperation and collaboration, thus its ability to cooperate with rivals is an important consideration when we design interventions.
  3. Working with the right firms also provides an important source of technology and knowledge spillovers. This is where the challenge comes in for development practitioners.

Generally, firms that are able to lead the way, or could be good role models, are difficult to involve in development programmes for a variety of reasons. I won’t discuss that right now. What is important to remember is that most firms not only absorb or use technology and knowledge, they are also the main sources of knowledge and technology. This is both from a supply perspective (equipment suppliers, technical or specialist sources of knowledge, etc.) and from a demand perspective (demanding customers, sophisticated demand). Whether firms are aware of their role as disseminators of knowledge of technology is another story!

I will rather focus on how to identify the firms that we can work with to improve innovation and competence in all three units of analysis discussed above. Remember, our objective is to find ways to improve the dynamic in innovation systems that will result in the modernisation and technological upgrading of industries and regions.

More than 25 years ago Bo Carlsson and Gunnar Eliasson described a concept called “economic competence”. At the time they defined economic competence as “the ability to identify, expand and exploit business opportunities” (Carlsson and Eliasson, 1991). This is a useful definition as we have to remember that we cannot innovate on behalf of a broader industry. Somehow we must work with those firms that are able to innovate, imitate, adapt and integrate new knowledge and ideas.

According to Carlsson and Eliasson, economic or business competence has four main components:

  1. Selective (strategic) capability: the ability to make innovative choices of markets, products, technologies and overall organisational structure; to engage in entrepreneurial activity; and especially to select key personnel and acquire key resources, including new competence. This aspect has been amply illustrated in recent years as many companies have struggled to define their corporate identities and strategies as distinct from their competitive strategies in each individual business unit (Porter, 1991).
  2. Organisational (integrative, coordinating) capability: the ability to organise the business units in such a way that there is greater value in the corporate entity as a whole than in the sum of the individual parts.
  3. Technical (functional) ability: this relates to the various functions within the firm, such as production, marketing, engineering, research and development, as well as product-specific capabilities. These are the areas of activity in which firms can compare themselves to their peers or leading competitors.
  4. Learning ability, or the shaping of a corporate culture which encourages continual change in response to changes in the environment.

Economic competence must be present in sufficient quantity and quality on the part of all relevant economic agents, users as well as suppliers, government agents, etc. in order for the technological system to function well. This is both true at a local or regional level, our a national or sectoral level.

If the buyers are not competent to demand or use new technology – or alternatively, if the suppliers are not able or willing to supply it – even a major technical breakthrough has no practical value or may even have negative value if competitors are quicker to take advantage of it.

I think that this business approach of choosing the entrepreneurs that we work with is very relevant to finding the people who can absorb new ideas and make them work in a developing country context. I would also go so far as to state that I do not believe that it is feasible to select “change agents” according to social criteria such as gender, age, etc. – but that we recognise that change within economic systems happens because of the economic competencies of the people who are recognised in the system (regardless of their demographic data). The reality is that you cannot be competent on behalf of other people!

I challenge you to review the firms that you are working with to see if they are economically competent!

Sources:

Carlsson, B. and Eliasson, G. (1991). The nature and importance of economic competence. Working Paper No. 294, The Industrial Institute for Economic and Social Research (IUI).

Porter, M.E. (1991). “Towards a dynamic theory of strategy“, Strategic Management Journal, 12 (Winter Special Issue), pp. 95-117.

Exploring individual Social Technoliges that enables Systemic Change

My exploration of complexity thinking and how it enables leaders and collectives to make better decisions is taking me back to where I started. I started in organisational development and innovation. Then I shifted into larger economic systems like innovation systems, local economies, value chains or regions. For the last four years I have been working mainly on organisational development in meso organisations involved in technology development and innovation promotion. So I have come full circle, but I sense that I am now better able to synthesize and use my experience and ideas. Now I will focus on the role of individuals in changing economic systems.

Marcus Jenal and I wrote last year about Systemic Change. In our reading the wealth of literature on economic evolution we were were deeply impressed  by the work of Eric Beinhocker. In particular, the idea that economic development demands a co-evolution of:

  • Physical technologies – are methods and processes for transforming matter, energy and information from one state into another in pursuit of a goal or goals; they enable people to create products and services that are worth trading. A physical technology is not only the physical object itself, but both the design of the thing and the instructions and techniques to make and use it. The ability to learn how to use, make and adapt the physical objects is critical.
  • Social technologies – are methods, designs and arrangements for organising people in pursuit of a goal or goals; they smooth the way for cooperation and trading products and services. For example, the ability to organise people into hierarchies, such as companies or other organisations, which can allocate resources to specialised functions and which can learn is a social technology.
  • Business plans – are developed by enterprises and other organisations that are competing for resources, acceptance and buy-in in the economy. Business plans play the critical role of melding physical and social technologies together under a strategy and then operationally expressing the resulting design in the real world. From an evolutionary perspective, the purpose of business plans is to discover what is profitable, efficient or even possible in a given economic context. You could call this an economic technology.

I realized last week that I have spent at least five years of my career immersed in each of these three co-evolutions, but with the others not completely forgotten. From a physical technology perspective, I have always been involved in promoting trans disciplinary research, promoting innovation systems and helping innovators become more effective. I have spent a number of years supporting entrepreneurship, developing supply chains and promoting value chains. From a social technology perspective I have been working on management education, business consulting, assisting with change processes and facilitating search and discovery process within and between organisations.

Now I am taking this to a next level. I will for the next few months focus intentionally on the role of individual leaders in the co-evolutionary process. The co-evolution is fractal. I started at the highest level, the level of open systems, innovation systems, local economies and industries. Then I shifted to meso organisations, development organisations and universities, where I often focused on teams and how they use their resources in a systemic way to improve the networks they form part of.

The focus on individuals will be formal this time, where in the past this was informal, almost a by-product of my process consulting and advisory work. To equip me for this role I had to refresh my organisational and coaching skills. I have also participated in an advanced coaching programme in order to facilitate this shift in focus. Lastly, to enable this process I have exited many contracts, or not renewed contracts as they came to a close. This will enable me to dive deep. I will focus my coaching praxis on leadership support, innovation support and institution building, but with the role of the starting point. This will require many new business practices, and many new clients. I will try my best to frequently reflect here on my learning.

Instigating Innovation: Accelerating Experimentation in industry

Originally published Feb 2016, revised March 2018

When innovation centres, technology transfer centres, applied research platforms and other similar organisations wish to help industry with innovation, one way could be to assist companies to experiment with new ideas. I will simply refer to these centres from now on as innovation and technology support centres. In most of the places where I work these centres are often hosted by or associated with universities, applied research organisations or technology transfer organisations.

One way to support industry to experiment is through various technology demonstration-like activities, allowing enterprises access to scarce and sophisticated equipment where they can try out new ideas. In its simplest form, a facility allows a company to order samples to a certain specification so that the company can see whether a particular process will be able to meet a particular specification or performance criterion. A slightly more intensive form of technology demonstration allows visitors in and a technology and its application is demonstrated (eyes only, no touching!). Very often equipment suppliers play this role, but in many developing countries equipment suppliers act more as agents and cannot really demonstrate equipment.

In Germany I saw demonstration facilities where the pro’s showed the enterprises how things work, and then they stood back to allow teams from companies to try things out themselves.

A critical role of innovation support centres is to provide industry with comparative studies of different process equipment. For instance, an innovation centre supporting metal-based manufacturers, providing the industry with a comparison of the costs and uses of different kinds of CAD systems could be extremely valuable to the industry.

Maker labs, Fablabs and similar centres all make it easier for teams that want to create or tinker with an idea to have access to diverse technologies, reducing the costs of experimenting. However, the equipment in these labs is often not so advanced, but it can often be very diversified. In my experience these centres are very helpful when it comes to refining early idea formation and prototyping. However, helping manufacturers to experiment with different process technologies, different kinds of materials, substitute technologies, etc. is a binding constraint in many developing countries. The costs of gaining new knowledge is high, and the high costs of failure make companies wary of experimenting.

Innovation support centres must be very intentional about reducing the costs of various kinds of experiment if they want manufacturers, emerging enterprises and inventors to try new ideas. These innovation centres can play a role by:

a) assisting companies to organize themselves better for experimentation internally

b) assisting many companies to organize themselves better for experimentation collaboratively

c) conducting transparent experiments on behalf of industry collectives.

In my experience, graduates from science disciplines often understand how to conduct experiments because their course work often involves time in a lab. They know basics such as isolating variables, managing samples, measuring results, etc. However, engineering graduates often do not have this experience (at least in the countries where I have mostly been working). The closest many engineering graduates will ever get to an experiment is a CAD design or perhaps a 3D printed prototype.

Therefore it is necessary for a range of these innovation and technology support centres to assist companies at various hierarchical levels to experiment.

At the functional or operational level, organising for experimentation involves:

  • creating teams from different operational backgrounds
  • creating multiple teams working on the same problem
  • getting different teams to pursue different approaches
  • failing in parallel and then regularly comparing results
  • failing faster by using iterations, physical prototypes and mock-ups.

According to Thomke, results should be anticipated and exploited – even before the results are confirmed.

At a higher management level, organising for experimentation involves:

  • Changing measurement systems not only to reward success, but to encourage the trying of new things (thus encouraging learning and not discouraging failure).
  • Moving from expert opinion to allow naivety and creativity.
  • Preparing for ideas and results that may point to management failures or inefficiencies elsewhere in the firm (e.g. improving a process may be hampered by a company policy from the finance department).

Getting multiple companies and supporting organisations to experiment together is of course a little more difficult. Management of different organisations have many reasons to conceal failures, thus undermining collective learning. One way around this could be to use a panel or collective of companies to identify a range of experiments, and then to have these experiments conducted at the supporting institution in a transparent way. All the results (successes, failures and variable results) are carefully documented and shared with the companies. However, to get the manufacturers to use these new ideas may require some incentives. In my experience, this works much better in a competitive environment, where companies are under pressure to use new ideas to gain an advantage. In industries with poor dynamism and low competition, new ideas are often not leveraged because it simply takes too much effort to be different.

Promising ideas from experiments can be combined and integrated after several iterations to create working prototypes. Here the challenge is to help industries to think small. First get the prototype process to work on a small scale and at lower cost before going to large scale of testing several variables simultaneously. An important heuristic is to prototype on as small a scale as possible while keeping the key mechanical or scientific properties consistent. More about this in a later post. (Or perhaps some of the people I have helped recently would not mind sharing their experience in the comments section?)

I know that this is already a long post, but I should like to add that Dave Snowden promotes Safe2fail probes, where teams are forced to design a range of experiments going in a variety of directions even if failure is certain in some instances. In my experience this really works well. It breaks the linear thinking that often dominates the technical and manufacturing industries by acknowledging that, while there may be preferred solutions, alternatives and especially naive experiments should be included in the overall portfolio. To make this work it is really important that the teams report back regularly on their learning and results, and that all the teams together decide which solutions worked best within the context.

 

Source:

THOMKE, S.H. 2003.  Experimentation matters: Unlocking the potential of new technologies for innovation. Harvard Business Press.

 

 

Instigating innovation in traditional industries

Originally published in January 2016, revised in March 2018

The average manufacturer in a developing country often grapples with the notion of innovation. That is why such industries are often called “traditional“, although almost all industries will have one or two outliers. While governments, such as the South African government, offer incentives to stimulate innovation, most manufacturers do not identify with the term “innovation” the way governments use it. For instance, when governments use the word “innovation” they often mean “invention“, in other words something that can be protected, copyrighted and owned (see more about the differences between innovation and invention here). While I understand the argument for patenting and protection, I think this narrow definition of innovation is inhibiting many industries from increasing their productivity and competitiveness by copying what works elsewhere (this is just a process of catching up). It also fails to recognize that in many value chains the manufacturers themselves make components or sub-systems that go into overarching architectures (defined by standards, compliance, specifications), so their design authority is limited in scope.

Innovation_invention

Here is a list of synonyms from thesaurus.com for innovation that I have assessed to see how enterprises might understand or react to these words:

  • Modernization – many enterprises dream about this but often do not have the financial means nor the organizational capability to pull it off (one day, some other time)
  • Contraption – many innovations and most inventions result in one of these. You can see them standing in  corners in most factories
  • Mutation, addition, alteration, modification – this is what most innovations in traditional industry would look like. They are doing this all the time as their machines get older, but this behaviour is mostly not recognized nor speeded up.
  • Newness, departure, deviation – the bolder enterprises with more financial and organizational capability might try these, but it takes capital to maintain.

Most people understand innovation as an outcome, but the word is a noun that implies change and novelty. It is about a shift, even if it is often incremental. The reason why so many of our enterprises in South Africa are not regarded as innovative is because they struggle (or perhaps do not have the organizational capability) to manage several simultaneous change processes. As Tim Kastelle posted some years ago, change is simple but not easy. Although this is often described as a technology problem it is really a management problem (see some older posts here). I would go even further and state that in many industries the margins are so narrow that even those enterprises that have a reasonable management structure would struggle to finance many innovations at the same time.

However, in my experience of having visited more than 50 manufacturers every year since 2009, I am always stunned and awed by how ingenious these companies can be. They keep old machines running, often modifying them on the fly. They operate with a fluctuating and unreliable electricity supply, inconsistent water pressure and often hardly any technical support. What policy makers often do not realize is that in developing countries it takes a lot of management time and capacity just to keep the throughput going. The time and effort to go and explore “change” beyond what is necessary in the short to medium term is very costly. The costs of evaluating new ideas, new technologies, new markets and better suppliers are all far greater in developing countries than in developed countries. Yet at the heart of innovation is the ability to combine different inputs, different knowledge pools, and different supporting capabilities with different market possibilities.

There are two implications for innovation promotion practitioners.

  1. The process of instigating innovation must start with recognizing how companies are innovating NOW. How are they modifying their processes (and products), and how much does it cost? What are the risks that are keeping them from introducing more novelty? Perhaps they could use the Horizons of Innovation to create a portfolio of innovation (change) activities that can be identified at the enterprise or industry levels.
  2. It is hard if not impossible for different manufacturers in most countries to figure out what others are struggling to change at a technological level. Use your ability to move between enterprises to identify opportunities to turn individual company costs into public costs (this is often cheaper). Do not take the innovation away from enterprises, but use your meso level technology institutions to try and accelerate the learning or to reduce the costs of trying various alternatives. Be very open with the results to enable learning and dissemination of ideas.

The process of instigating innovation must start with recognizing where manufacturers are naturally trying to change, just as a change process in an organization must start with understanding current behaviour, culture and context. Somehow innovation has become so associated with contraptions and narrow views of technology that the body of knowledge of organizational development and management of change have been left behind.

Innovation systems in Metropolitan Regions of developing countries

During 2015 Frank Waeltring and I were commissioned by the GIZ Sector Project “Sustainable Development of Metropolitan Regions” (on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ), Division 312 – Water, Urban Development, Transport) to write a discussion paper about a hands-on approach to innovation systems promotion in metropolitan regions in developing countries. The discussion paper can be found here.

Frank (left) and Shawn (right) in front of the Berlin Wall Memorial

This assignment was a great opportunity for us to reflect on Frank’s experience on structural change in territorial economic development and my experience on industrialization and innovation systems in developing countries. We also had to think hard about some of the challenges of using a bottom up innovation systems logic in developing countries, as such an approach would rely heavily on the ability of local public management to coordinate strategic activities aimed to improve the dynamics between various public and private stakeholders. It was great to reflect on our past Local Economic Development experience and our more recent work on innovation systems, industrial upgrading and complexity thinking.

A key aspect of this discussion document was to think long and hard about where to start. We know many economic development practitioners in cities are often overrun by demands from both politicians and industries for support. We also know that by selecting promising sectors based on past data and assumptions about job and wealth creation often end in little impact and much frustration. We agreed that an innovation systems approach must be aimed at stimulating the innovative use of knowledge, so we decided to not start with a demand focus (assuming the officials are already responding to some of the demand) or with statistics but a knowledge application focus. The use, generation and recombination of knowledge is central to the technological upgrading of regions, industries, institutions and societies. From our experience in promoting innovation systems and our recent research into non-consensus based decision making (this is where you do not select target sectors based on consensus or assumptions about growth potential, but you look at emergent properties in the system) we decided to start with three questions to understand the dynamics of knowledge flows in the region:

  1. Which enterprises, organisations and even individuals are using knowledge in an innovative way? Obviously this question is not simple and can only be answered by reaching out in the local economy to institutions, firms and individuals.
  2. Which stakeholders are actively accumulating knowledge from local or external sources? Again, this is an exploration.
  3. Who are individuals or organisations that know something about unique problems (challenges, demands, constraints) in the region? These could be buyers, supply chain development officials, public officials, engineers or even politicians that are willing to articulate unique demands on the regional economy that might not have been responded on by local (or external) enterprises.

These three questions are treated as an exploration that will most likely be most intensive at the start. In our experience economic development practitioners should constantly be asking themselves these questions when working on any form of private sector upgrading.

A second dimension is about assessing the interplay between institutions and industries and its effect on innovative behavior within regions. Who is working with whom on what? Why? What are the characteristics of the life cycles or maturity of various kinds of stakeholders in the region? Thus we are trying to understand how knowledge “flows” or is disseminated in the region. While some knowledge flows are obvious, perhaps even formal, some knowledge flows could be more tacit and informal. For instance, while knowledge flows from education is quite formal, the informal knowledge exchange that takes place at social events is much more informal, yet very important.

Apart from the identification of the dynamics and interrelations between the industries and the different locations, one other key factor is to identify the drivers of change who want to develop the competitive advantages of the region.

We also present our technological capability upgrading approach as six lines of inquiry, some of which have been covered in earlier posts on this weblog:

  1. The company-level innovation capability and the incentives of firms to innovate, compete, collaborate and improve, in other words the firm-level factors affecting the performance of firms and their net-works of customers and suppliers. These include attempts within firms to become more competitive and also attempts between firms to cooperate on issues such as skills development, R&D, etc.
  2. The macroeconomic, regulatory, political and other framework conditions that shape the incentives of enterprises and institutions to develop technological capability and to be innovative.
  3. Investigation of the technological institutions that disseminate knowledge.
  4. The responsiveness and contribution of training and education organisations in building the capacity of industry, employees and society at large.
  5. Investigation not only of the interaction and dynamics between individual elements in the system, but of the whole system.
  6. Exploring poorly articulated needs or unmet demands that are not visibly pursued by the innovation system.

We, and of course our GIZ colleagues of the Sector Project Sustainable Development of Metropolitan Regions, are very keen to engage with the readers on these ideas? Please post your comments, questions to this weblog so that we can have a discussion.

Best wishes, Shawn and Frank (Mesopartner)

 

 

New series: Instigating Innovation

I have been developing a new capacity building method and training approach that brings together my work in innovation systems promotion  and my work on improving technology and innovation management. I call it “Instigating Innovation”.

I chose “instigating” because it has a more positive ring to it than provocation or incitement. While it is a noun with mainly a positive tone, it is a bit more aggressive than support, enable or encourage or even stimulating. I have been referred to in my past as an instigator of change so I thought this was a good idea.

Why was this effort firstly necessary and secondary so rewarding?

My work on innovation systems is mainly aimed at assisting meso-organizations such as technology transfer centres, research centres and universities to be more responsive to the needs of the private sector. While it only takes a few interviews by a senior decision maker from one of these institutions to a few leading enterprises to get the organization to improve its offering to the private sector, it does not solve the problem that these institutions often needs a continuous process of innovation itself. So while they can respond to the needs of the enterprises (for instance by launching a new service, or making a key technology available, etc), they often are not able to innovate constantly in order to anticipate what they private sector might need in the future.

With my other hat on, working in the private sector to improve the management of technology and innovation is focused on helping individual and on rare occasions, groups or networks of enterprises to formalize or improve their management of innovation. Here my challenge is that most enterprises innovate by accident, or have elements of an innovation management approach in place without knowing it. But it is not systematic nor is it consistent.

So both supporting institutions and enterprises lack some very basic frameworks to focus their existing development and learning processes to ensure not only short term results (new products & services, process improvements, cost reduction, etc) but to also ensure longer term success (playing in the right markets, selecting the right technologies, investing in the right kind of knowledge, partnering with the right people, etc). Furthermore, most enterprises and supporting institutions have something else in common: they often face resource constraints with the most versatile of their staff being involved in problem solving and not thinking about the future and what may be possible sometime down the line.

I set aside most of March and had great fun reading through my collection of articles, books, reports of past missions, and speaking to entrepreneurs and development practitioners I trust. Based on this investigation I decided on the following criteria for instruments to include in the Instigating Innovation module:

  1. Each instrument or concept must be relevant to both enterprises and meso-level organizations05 building innovative capacity small
  2. Each instrument must provide a very simple framework that can be illustrated on a flipchart
  3. The simple framework must be usable as a workshop format that allows people to reorganize or explore their current and future practices
  4. The frameworks must be scalable, both in depth (allowing pointers for a deep dive into an issue) and in width (useable for a product, issue, portfolio or the strategy of the organization as a whole).
  5. Lastly, I did not want to be the consultant with a project, I want to be the facilitator that enables change and that builds long term sustainability into the organizations that I work with.

This was a very rewarding exercise. Not only do I love reading about innovation, change and technology, I love finding better ways to explain these concepts. It was also great to find a way to connect my work on innovation systems, which often seems abstract, with the tough decisions that the enterprises that I work with must confront and address. I tend to work in the more technical domains dominated by academics, engineers, scientists and manufacturers, so finding a simple yet convincing way to add value to what these clever people do was important.

I will in the next few posts reveal a little bit more of the tools I selected and how it can be used.

Thank you for the EDA team in Bosnia and Herzegovina who motivated me to turn this idea into a capacity building format and who agreed that I try “Instigating Innovation” on their team during my visit to Banja Luka in May 2015!

Instigating Innovation in Banja Luka with the team from EDA
Instigating Innovation in Banja Luka with the team from EDA

Systemic Insight – Economic development is about introducing options, not bringing solutions

Marcus and I have just posted a new article on the Systemic Insight website. The post is about our recent article that was published in the IDS Bulletin (Vol 46.3) and is titled “Explore, Scale Up, Move Out: Three Phases to Managing Change under Conditions of Uncertainty”. 

Please note that in future all my posts specifically about complexity and resilience will be published on our Systemic Insight website. To my regular blog readers it may be worthwhile to also subscribe to the feed on that site. We promise to write more often now that the foundation for our applied research theme on complexity in development has been created. We already have many customers using our approaches and this area of work is promising and rewarding. We have added a new page to the Systemic Insight site that explains some of our most frequently asked about services related to complexity thinking applied to development.

On this site I will keep on writing about Private Sector Development in general, and particularly on innovation and innovation systems.

Your feedback, comments, emails, phone calls, tweets and likes are appreciated. Let us know what you think and what you would like to discuss, read about or just “air”.

Best wishes,

Shawn

The oblique search for new industrial opportunities

Industrial policy is typically set at national level. It is often aspirational and attempting to “stretch” an economy into new kinds of production and value addition. Programmes are designed, targets are set such as doubling manufacturing contribution of x% within 7 years. Therefore it is sometimes disconnected from the present as it seeks a new Status Quo, a different structure of production.

Yet the natural process under which new production activities are created is complex. It is not as simple as finding a market opportunity, finding the right production process, securing funding and launching a business. The economic context, the political climate, the entrepreneurs with the right levels of experience, backing and confidence are all needed. And don’t forget individuals with a desire to expand, take risks and try new things.

Danni Rodrik argues that Industrial Policy should be a search and learning process. Many centrally planned industrial policies even cite Rodrik as they then commence with outlining with great certainty what must be done, by whom, with which resources and to which effect. This logic completely ignores the importance of what exists, and what is possible from here. It ignores that fact that the past matters, and that the current structures are the result of a series of evolutionary steps. Complexity science teach us that these plans ignore the fitness landscape, a landscape that is dynamic and constantly changing. Any attempt to extend the horison further than what is within reach should be treated with great caution. One of the greatest obstacles is the attide towards risk and the optimism of enterprises. I don’t think Rodrik meant the ministers officials must do the search, rather, industry must do the search or at least be actively involved in the search in partnership with government and institutions.

But the search is not about answering a simple question. A more oblique approach is called for (see John Kay, Obliquity). Which means we should set aside targets and indicators, and focus on creating small experiments to introduce more variety and options into the system. It means that finding out that something is not possible is as valueble as figuring out that something else is indeed possible. Taking Rodrik literally, it would mean also giving much more attention to what entrepreneurs are searching for and experimenting with in the background. It requires that we recognise that the current economy is creating what is viable under the current dynamic circumstances, and that only strategies that recognise where we are and what is certainly within reach from here is in fact viable. The challenge for developing economies is that what is possible is typically limited and further constrained by strong ideological bias as to what is possible or desirable. For instance, many South African business owners are trying to shift out of price sensitive markets competing on a basis of low cost skills. Entrepreneurs are moving into knowledge and capital intensive production, with more focus on service and integration. Government is searching for a way to employ people with low skills because its own social programmes and service delivery is not a viable fall back for people with insufficient skills.

The search is not about analysis
Complexity describes a situation where the patterns of what exactly is going on is unclear or shifting. We cannot entirely figure out what is leading to what and what is reinforcing what. Due to the dynamism, we cannot really understand the situation better through analysis. Another way of explaining this, is that a situation is complex when more than one competing hypothesis can with some probability explain what is going on. The only way to make sense of complexity is to try something, actually, try many things. And then see what seems to work better. It means that we start with what we have and who we know (and can trust), and then try a range of things with the simple purpose of seeing what is possible within the current constraints of the economic system. Steps must be taken to reduce risks (for instance by ensuring that the costs of failure are small, or that the experiments try different ways of solving the same problem), but then this whole approach in itself must be recognised to be politically risky.

This is where donors and development partners come in. By assisting developing countries to conduct low key experiments in order to create variety is essential, as development partners can reduce the political risks of their counterparts. This approach will furthermore require the abondenment of targets and indicators as an attempt to measure accountability and progress. A more subjective approach that sets indicators that monitors the overall health or dynamism is needed so that the experimentors can sense when they are indeed making progress. Thus the indicators does not measure success, nor input.

Perhaps then a skunkwork approach to a more complexity sensitive industrial policy approach is needed. Let the normal industrial policy targets and rigmarole be there. Politicions and bureacrats like this sense of certainty and purpose. But allow for some experimentation on the side under the heading “industrial policy research”. Allow this team to work with private sector partners to conduct small experiments to try new business models in an incremental way. For instance, do incubation to try new ways of mineral beneficiation, but without investing in large buildings or expensive equipment. Use what is existing as far as possible, even if it means having the manufacturing done on a contract basis elsewhere in order to test if local demand for the outputs exist.