By Clarence J. Henderson
Operating in a Knowledge Economy
It is not the changing character of war but the changing character of work that will most profoundly affect the Army as an institution and society as a whole. The individual worker is no longer regulated to bureaucratic tasks and has been empowered by technology to cultivate information into useful knowledge and increase productivity. Useful knowledge can be combined with today’s lower capital investment requirements to further empower individuals to conceive and create innovative technologies within their entrepreneurial organizations. What has emerged are regional and global knowledge economies driven by the exchange of useful information. And it’s within these knowledge economies that the Army is attempting to capitalize with entrepreneurs to maintain technological overmatch against global peer threats. With the creation of Army Futures Command in Austin, Texas the Army has placed its modernization enterprise into one of the country’s most burgeoning knowledge economy’s.
Army leaders who’ve been raised within the bureaucratized society of the Department of Defense (DoD) must now drive innovation processes in a knowledge economy. To do so requires understanding three fundamental concepts of innovation:
Knowledge economies drive innovation; not information economies.
Solutions are designed; not found.
Innovation is managed; not inspired.
Incubators, accelerators, co-creation platforms, and innovation districts. Army modernization is incorporating a new vernacular of open innovation concepts. The most pronounced of those concepts is the innovation ecosystem. Innovation ecosystems exist to merge knowledge, human capital, and material resources; in the midst of urban centers that can offer diverse cultures and a high quality of life. Collaboration is accelerated in these ecosystems by bringing together the money (commercial economies), and minds (research economies). Proximity to academia, industry, and innovators can offer an advantage of accelerated innovation needed now more than an ever in a world of compressed actions and reactions.
The knowledge exchanged within the innovation ecosystems of America’s great cities provide an impetus for developing novel technologies. Such technologies when merged with the Army’s internal Research, Development, Test, and Evaluation (RDT&E) enterprise can produce the technological advantage that the National Defense Strategy demands. But innovation ecosystems are not a place where technologies are found by chance, or at least they shouldn’t be. Applicable technologies arise from iterative processes driven by individuals who design solutions to problems. It is the individual exercising influence on the innovation process as a whole that can make innovation more rapid and more precise.
Doing this is a matter of mastering the flow and understanding of knowledge emanating from the developing ecosystems of America. Mid to senior grade officers who have matured within the industrial and information economies of the Defense Department are now charged with leading innovation in an open knowledge economy. Capturing information and data isn’t good enough. The ability to interpret useful from useless technological knowledge that builds value within the operating concepts of the U.S. Army is required. This quest for useful knowledge will occur while navigating through irrelevant inventions, immature wildcat ecosystems, and start-ups whose primary objective is to make a whole lot of money. The challenge now for the Army is to acquire useful knowledge, distribute it, and use it.
The Knowledge Economy and a World of Things
We live in a world of “things” and try to juxtapose each with a revolution. Robotics, artificial intelligence, nanotechnology, and bioengineering are some of the things we call revolutionary. These are not revolutions. Nor is the ubiquitous term “technology.” Technology and its global diffusion is an enabler to change. But it is not a revolution in and of itself. Technology enabled the industrial revolution and mechanization was every bit as innovative then as artificial intelligence is now but was not “the” revolution. These “things” are influencing agents in an ocean of cultural, social, political, and scientific disciplines.
The real revolution that has emerged amongst us is “knowledge.” No longer is land, labor, and capital the predominant factor of production.1 The transfer of knowledge and its integration within organizations now drives economies. Knowledge becomes an advantage when it is used. That is, today’s successful organizations apply acquired knowledge to systems, processes, and techniques in a continuous quest for incremental improvements to products and services. As a revolution, the transformative change from information collection to knowledge distribution has empowered institutions, populations, and individuals to acquire new technologies, alter governance, and enlighten inhabitants of virtually every region of the world to the critical human affairs before us.
The exchange and distribution of knowledge are enhanced by diffusion of information technologies ranging from cloud computing, big data collection and analysis, access to the internet of things, and an array of handheld media devices. But sharing knowledge ultimately involves humans engaging in dialogue to expound upon their ideas. Humans are still required to engage on personal levels to advance notions and concepts. Through these personal interactions, intimate exchange of experiences and expertise enables us to advance thought to create new technologies and processes. Leaders who understand how to leverage personal interactions and cultivate relationships built on trust will be able to promote social capital across a range of disciplines. The engineers, scientists, entrepreneurs, and futurists can collaboratively contribute to sensing emergent technological opportunities in a rapidly changing operational environment.
And herein lays a paradox. The mid to senior grade military officers responsible for extracting knowledge from the innovation ecosystems have themselves emerged from a bureaucratized society. Specialization in functional areas and bureaucratic tasks encourages administrative and technical competence, but are not necessarily related to the vision and creativity needed for leadership.2 Knowledge economies rely upon the intellectual capital of leaders instead of bureaucratic information inputs to rudimentary elements of a problem. The intellectual capital required for sensing novel technologies in a knowledge economy deserves a competency model of its own. Competencies such as crafting business strategies, forecasting and managing change, creative and critical thinking, minimizing risk, and applied research surpass bureaucratic competencies and are required within the innovation ecosystems.
In the absence of an innovation competency model, businesses should simply expand existing processes to cultivate innovation competencies. For the U.S. Army, the Operations Process is a perfectly sufficient framework to understand the environment necessary to sense new and novel technologies that can be applied against existing capability gaps. Any officer incapable of employing the Operations Process Framework at a point in their career when it should have been mastered should leave the modernization enterprise and return to bureaucratic work.
But innovation competencies are only a start point for mastering the exchange and distribution of knowledge in a knowledge economy. The very structure of organizations must focus less on hierarchy and more on sharing information.3 The Cross Functional Team concept is a start and will need to be employed across the whole of the modernization enterprise. The term “Agile” referred to so often in Army modernization literature is not an adjective; but rather an approach to software development employing a range of values and principles beneficial to iterative development. Agile development methods such as Scrum, Kanban, and the SAFe Scaled Agile Framework should be used to manage work and distribute knowledge. Delivering value to Soldiers in the field will require leaders who’ve mastered the collection, analysis, and dissemination of knowledge. Adopting new ways of growing knowledge and expanding beyond bureaucratic tasks in a world of things must be pursued.
Design Solutions to Problems – Incremental Approaches to Sustaining an Institution
Solutions are not found, they are designed. An analysis of the environment, development of the problem, strategic design with the operational approach, and measurement of success should occur before an innovation model is implemented. From this process arises requirements that are entered into an innovation model. Innovation models serve to move
strategies from the world of things into a framework for incremental development that adds value for the end user. Six generations of innovation concepts have evolved from simple linear innovation models to the current interactive networks and innovation systems combining knowledge and specific competencies.4 Key to this approach is the incremental development of knowledge. The incremental growth of knowledge is a process of strategy development and is expanded within the ordered process of an innovation model.
Beware the break-through technology that proclaims a “revolution.” In a world of things where everything is a revolution, incremental approaches to innovation tend to be reduced or even discarded. Revolutions can proclaim a solution as “found” rather than designed. Revolutions are not logical and cannot be defined or predicted at the point of emergence. Breakthrough mindsets can circumvent incremental knowledge in this sense. Seeing innovation regarding breakthroughs and ignoring the potential of incremental innovation risks “partial thinking”.5 Since most breakthrough technologies tend to be presented as “revolutionary,” care must be taken not to abandon incremental innovation in a legitimate quest to onboard novel technologies. We are just now more accurately defining the phases of the industrial revolution 200 years after its genesis. The concept of a knowledge revolution is nearing its 60-year mark of postulation. Show me a break-through technology that professes a revolution, and I will ask to see your strategy, and incremental approach first; then 100 years from now someone can profess it a revolution.
Evolutionary, or iterative, innovation is a process that begins with an idea and then incorporates concept requirements, prototype development, demonstration and testing, and evaluation. Incremental innovation provides an approach to technology expansion that incorporates continuous planning, development, and testing with manageable inputs. Tempered with Agile frameworks the incremental approaches to innovation can become more adaptive, rapid, and flexible. Army Secretary Mark Esper has stated that permanent evolution with the ability to remain flexible will be pursued.6 This iterative innovative process will ensure constant adaptation to the “revolutions” amongst us. The most successful sustaining companies have implemented incremental approaches to innovation. Companies such as Corning Inc. (formally Corning Glass) provide examples of incremental innovation in a world of things. A continuing commitment to leadership development, research and development, and creation of innovation strategies with incremental innovation models have enabled Corning to continue growth for the last 167 years.7 Corning’s combination of material and process innovation using robust R&D has enabled this sustaining success.
Other industries too have demonstrated a profound commitment to incremental approaches to innovation that are often mistaken as “revolutionary discoveries.” The software industry has given us an array of Agile innovation frameworks born of the disk drive wars of the 80s and 90s, and the oil and gas industry never stops innovating in a world of platforms and pipelines. The Army too is a sustaining institution, and the creation of Futures Command demonstrates a commitment to the expansion of knowledge for innovative technologies. The current Innovation Maturity Model for the U.S. Army directs that innovation processes should be established by 2019; with senior leadership partaking in the processes by 2021.8 Currently, the Army is taking a more holistic approach to innovation and pursuing a strategy of organizational evolution (i.e., the creation of Futures Command) as the innovation processes are concurrently being conceived, developed, and initiated by 2019. New capability development innovation models must be developed, and then driven by leaders who know how to merge the distributed knowledge of an innovation ecosystem with required capabilities. The challenge of Army Futures Command, just like any private sector corporation, is to reduce the complexity of its innovation environment by applying real Agile processes to one expandable innovation model that values incremental knowledge across the organization. Until that is resolved, the incremental knowledge gained in any one Army organization will continue to diffuse uncaptured and underutilized amongst the whole.
Manage Innovation
Management is required to move new technologies from ideation through the incremental development process. Management in today’s knowledge economy encompasses three essentials. These are the sharing of useful knowledge, cultivating the intellect of entrepreneurs, and applying business processes to new technologies. For the Army modernization enterprise, the challenge becomes employing the capabilities of a bureaucratized society into a knowledge economy where the capabilities of the individual are valued.
Business leaders are still required to sense opportunities, understand markets, propose novel offerings, articulate compelling visions, lead work, and deal effectively with customers.9 By contrast, large complex organizations such as the Defense Department draw upon its concentration of commands, direct reporting units, directorates, and mass of disparate knowledge workers to move agendas. The inevitable struggle is for the knowledge worker who possesses business leader capabilities but is inundated with bureaucratic tasks. Never the less, in an open innovation ecosystem military leaders must master innovation management.
The first management essential is to share useful knowledge. Knowledge is built from information, and that information requires analysis to determine what is useful and what is useless. Information begins its journey as data which originates from a variety of structured and unstructured sources. The selection and usage of data analysis and data integration tools to enable digital transformation must be selected and then applied. Capturing and managing all this data can be a bureaucratic task, but converting it into information is within the domain of the knowledge worker. Information is then aggregated into content and must be captured, managed, retained, and ultimately delivered.10
The delivery of information is critical, and it must be distributed across various disciplines ranging from managerial to engineering. And this must occur on a daily basis. Therefore, hoping data is captured and cultivated to information absent a data architecture will not suffice. Data architectures must be complete with policies and rules to ensure every informal conversation that occurs within the innovation ecosystems are captured as data. Failing to do so risks not sharing useful knowledge to a critical leader.
The second management essential is to cultivate the intellect of entrepreneurs. Entrepreneurship is all about business. There is a misconception developing within the innovation ecosystems that an entrepreneur is an inventor or prodigy. Entrepreneurs are much more than that. They are responsible for introducing a new product or service into a market; but they are primarily responsible for organizing a business construct, acquire resources, and then manage it. The technological prodigies are a “part” of the entrepreneurial enterprise. Google refers to these technological prodigies as the “smart creatives.”11 A term coined by Eric Schmidt and Jonathan Rosenberg of Google, the smart creatives disrupt industries through an aggressive passion for causing change. They also spread knowledge and insights to their peers at work.
The bureaucratized society does not nurture smart creatives; it crushes them. Managing the smart creatives requires leaders and managers who can first identify who they are and then insulate them from bureaucratic redundancies that lack conceptual problem-solving talent. Smart creatives don’t fall into any one discipline. A current mistake is assuming anyone with a Ph.D. is a smart creative and thus must be on an innovation team. Smart creatives need not emerge from the world of academia. A good place to look for smart creatives in the Army inventory are those junior officers and non-commissioned officers who have published journal articles, franchise and small business owners, and the class of global professionals working in industry as reservists. Scientific literacy is not required to design a solution and match it to a requirement. What is required is a passionate desire to solve complex problems through innovative experimentation.
The third management essential is to apply business processes to new technologies. A business process is a beginning-to-end progression of tasks that culminates with valued added to a customer. It incorporates an innovation model but also expands to strategic development, financial capital, and business portfolios. Inputs to the business process are identified which will increase value. Automating the business process through the application of tools will ensure a standard level of performance. It will also ensure standard production of measures of effectiveness and common operating pictures to ensure all members are operating as efficiently as possible. Just as the iterative steps within an innovation model are tempting to discard in a wildcat innovation ecosystem where “everything is a revolution,” so too are business processes they are attempting to circumvent. But business processes will ensure that important tasks required to add value to the end user are not neglected.
Conclusion
Individual productivity, the diffusion of technologies, economic growth, and the enlightenment in human affairs each enabled in a knowledge economy will shape societal progress into and beyond the 21st century. These knowledge economies will result in a changing character of work and will have the most profound effect on the Army as an institution. How this knowledge is shared and applied will ultimately determine the success or failure of the Army’s modernization enterprise. The Army modernization enterprise must adapt to seeing things in a new way, and open innovation will provide new ways to streamline business practices, modify innovation and acquisition concepts, and foster leadership development. But within the open innovation ecosystems of America’s great cities care must be taken not to neglect the core concepts of innovation. Leaders must understand that knowledge economies drive innovation, solutions are designed, and innovation is managed. The challenge for the Army within the knowledge economies is to acquire useful knowledge, distribute it, and use it.
Colonel Clarence J. Henderson is a traditional drilling member of the U.S. Army Reserve. He is assigned to the DAMO-SSW (War Plans), U.S. Pentagon. He is the former commander of the 72nd IBCT and 3-141 IN Battalion and has deployed to Afghanistan, Iraq, Central America and the U.S./Mexico Border. He holds a BS in Botany, an MS in Soil Science from Stephen F. Austin State University and an MSS from the U.S. Army War College. He has been a small business owner in the construction industry of Houston, TX for over twenty years.
Views contained in this post do not represent the United States Army, or the Department of Defense.
Notes:
1Peter F. Drucker, “The New Society of Organizations,” Harvard Business Review, September-October 1992, 95-104.
2Henry A. Kissinger, “The Policymaker and the Intellectual,” The Reporter, March 5, 1959, 30.
3Joseph A. Maciariello, A Year with Peter Drucker: 52 Weeks of Coaching for Leadership Effectiveness (New York, NY: Harper Collins, 2014), 71.
4Benjamin Taferner, “A Next Generation of Innovation Models? An Integration of The Innovation Process Model Big Picture Towards the Different Generations of Models,” Review of Innovation and Competitiveness, 3, Issue 3 (2017): 53.
5Joe Tidd, “Innovation Models,” Tanaka Business School, Discussion Paper 1 (2006): 4.
6Army Secretary Mark Esper “Permanent Evolution: Secretary of Army Esper on Futures Command,” May 7, 2018. Breaking Defense, https://breakingdefense.com/2018/05/permanent-evolution-secarmy-esper-on-futures-command-exclusive/ (accessed July 8, 2018).
7Corning Glass Home Page, https://www.corning.com/worldwide/en/innovation/culture-of-innovation.html (accessed August 12, 2018).
8U.S. Department of the Army, Army Innovation Strategy 2017-2021, (Washington, DC: The Office of Business Transformation, 2017), 3.
9Andrew McAfee and Erik Brynjolfsson, “Big Data The Management Revolution,” Harvard Business Review, Winter 2017, 49.
10Danny P. Wallace, Knowledge Management (Westport, CT: Libraries Unlimited, 2007), 143.
11Eric Schmidt and Jonathan Rosenberg, Alan Eagle (with), Holter Graham (read by) “How Google Works,” Hachette Audio, 2014, Disk No. 3, 6/11.
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