Sunday, February 14, 2021

the business bro's math of innovation is fifteen percent correct

It's bizarre the way busy business bros make time to talk about innovation - how much they like it, that they believe in it, that they consider themselves innovators, and possibly even inventors, though of course their only recent invention is this fresh charade of self-delusion; busy people don't have time for innovation. It sounds like one of those ancient riddles - if your entire day is allocated to predetermined tasks, how much time is left for new pursuits? I suspect this logic was at the foundation of 3M starting "15 percent time", a program which encourages employees to "set aside a portion of their work time to proactively cultivate and pursue innovative ideas that excite them." If there isn't time for innovation, then the only solution - or at least the initial step - is to make time for innovation. This style of programmatic thinking is not limited solely to 3M, and there are many more successes from this approach than just the famous example of the Post-It note - loyal TOA subscribers reading this on Gmail should pause for a moment in acknowledgement of the email service having been developed during Google's variant of the concept (cleverly renamed "20 percent time" by the tech giant, perhaps to disguise its roots). But the existence of these programs is the exception rather than the rule in most organizations.

The situation concerns me because my experience suggests that innovation is beyond the reach of most organizations, whose leaders seem to think innovation is the result of little more than sporadic votes of confidence. One reality shared across the different roles I've held in three organizations has been the proliferation of busy business bros who allocate every hour of staff time to an existing concern, the frenzy of short-term directives occasionally being interrupted long enough for them to insist - yes yes, we're open to change, invention, and progress. The actions always spoke louder than the words, or at least it was in my case, as I've found over the years that my various attempts at innovation would generally be met with a range of reactions ranging from indifference to open hostility, but rarely support. It reminds me of something Michael Lombardi said on an episode of The GM Shuffle podcast - if you think someone is smart, you should be able to list off two or three specific things about this person that support your position. When I think back to leaders I've worked with who spoke in grand terms about their commitment to innovation, it strikes me that not a single one of them said - here are two or three specific things I've done that demonstrate my commitment. Instead, they always spoke of their intangible qualities, like dedication to the cause; sometimes they wrote checks for future creativity that would have bounced at the patent office.

The temptation is to conclude that organizational behaviors reflect the natural human tendency to crave the familiar and the routine over the unknown. I remain open to the possibility that the business bros of my past feared change at a visceral level and tailored their managerial philosophies such that the status quo could reliably protect them from the horror of tomorrow, this terror being their only certainty regarding the otherwise unknowable future. However, the issue with this conclusion is that there were always certain instances where the gatekeepers would relent in the face of new evidence. In my first managerial role, I could never implement an official work from home program for my team, but working from home was otherwise permitted for a wide range of exceptions including my six weeks on crutches, anyone who moved out of state, or a violent case of the common cold; I was almost fired from another job for trying to automate a certain process using SQL, but a few months later a similar project was assigned to me as a top priority. I am sure millions of workers have asked at some point during the past year - why did it require a worldwide pandemic for our organization to embrace virtual collaboration?

I am intrigued by the possibility that failures to lead innovation are less about business bros being afraid of the unknown and more about them ignoring the underlying math, which in my mind always demonstrates the return on innovation. The example of the COVID-19 pandemic is especially intriguing to this point as almost all employers with the capability shifted to remote work, seemingly overnight, in a mass admission of the new cost-benefit equation. I suspect prior to this moment many organizations existed much like my own, where there was a clear divide between junior and senior management in terms of each group's belief regarding the benefit of widespread remote working arrangements. In fact, my current organization - which years ago grudgingly permitted senior staff to work from home for one day a week, assuming of course that the staff member in question met a long list of additional criteria, a checklist that covered at least one printed page and included critical reminders such as "staff may be asked to attend key meetings in person on their work from home day", this document a testament to the tireless work that addressed every risk associated with one butt being out of one seat for one day a week - this organization of mine suddenly found its entire roster logging into Zoom meetings from home, a transition period that lasted all of three days; there is no official verdict at the time of writing, but all signs point to this being a permanent arrangement, due mostly to the success of the past year. The mentality change, it should go without saying, was due to the sudden mortal risk of riding the Green Line to the office, which convinced everyone that 2019's reservations over working from home suddenly represented trivial concerns in the larger context of the advantages of remote working considerations.

If you strip away the buzzwords that litter certain TED Talks about innovation, I suspect you'll find that the truth underpinning programs like "15 percent time" is the same as for any other successful business practice - the balance of costs and benefits associated with the approach is beneficial to the company. This is crucial because the business bros who hide their fear of change by keeping everyone busy may find a cost-benefit approach more convincing, as many did when COVID-19 simplified the calculus of working from home - after all, the only consistent truth about business bros is that, given two numbers, they will cleverly steer their organizations toward the more beneficial of the figures. I suppose the logical conclusion, then, is to explain the math of innovation in the simplistic terms necessary for allowing a busy business bro to see the benefit. I usually refer to this as "managerial math" and the concept is simple - you have to figure out if the innovation has a profit, just as you would do in building the case for any other business plan.

I'll use the example of innovation through coaching to highlight this idea. The math involves accounting for the following - on the cost side, I consider the time I spend coaching, the time a colleague spends learning, the opportunity cost to both coach and colleague, and the possibility of allocating resources in the future to repair errors associated with misusing the new technique; on the benefits side, I tally the time saved from reapplying the new skill across future iterations, the direct cost savings or revenue gains of a new approach, and the possibility of inspiring colleagues to pursue additional training. I'm comfortable estimating these aspects of the equation but those concerned of painting with broad brushstrokes are advised to incorporate a comfortable margin that protects against this risk - for example, only proceed if benefits exceed cost by over 10%.

Below is one calculation using a situation from a few years ago - I was considering an email to a large group which would explain a trick I thought they could use in Excel files. I came up with the following estimates:

Costs (known)
  • Time to draft email: one hour
    • Cost - one hour of my salary
  • Time to read email: one hour (sixty colleagues, half will delete or ignore, two minutes each for the thirty who read the email)
    • Cost - one hour of aggregate salary among sixty total (thirty responsive) colleagues
Costs (unknown)
    • Fixing future errors
    • Opportunity cost of writing/reading email
Benefits (known)
    • One percent annual efficiency for three colleagues
      • Response rate to email: three colleagues (assuming ten percent read and respond)
      • Time saved in Excel: three hours (one hour per colleague based on one hundred total Excel hours in a year)
Benefits (unknown)
    • Colleagues develop curiosity and proactively pursue additional skills

In other words, by writing out the email, I figured it would cost us two hours with certainty in terms of my time plus the time thirty colleagues spent reading the email. In addition, there was an unknown risk associated with someone screwing up the concept and making a mess of an existing file or process. I expected a one percent efficiency increase for the three colleagues that ultimately read and applied the email, with each of those three saving one hour per year based on an estimate that they spent one hundred hours each year using Excel. As it was on the cost side, I also noted the possible gain of these three colleagues choosing to pursue additional skill development opportunities based on this exposure to a new technique. The stated numbers give a clear verdict - three hours of gain for two hours of cost, so writing the email was a great use of my time - a 50% return on the overall investment.

If I think back to the various supervisors and managers from my three different career stops, I would estimate 100% of them would pursue any opportunity with a 50% return, with that morning's original priorities relegated to secondary status with immediate effect. However, there is a catch - I'm fairly certain not a single one of them would agree that my spending an hour on an instructional email demonstrated a good use of my time, even if I used my above calculation to demonstrate the error in the rebuttal. It could be due to any number of factors, with the most likely being a dispute over my assumptions, but the key is that the specific nature of the dispute doesn't matter because each moment spent in additional discussion adds to the cost side of the above calculation. If the process of making my case takes up a half-hour of work for two people, then the stated benefit in the math is wiped away - it's now three hours of cost for three hours of benefit; effectively, any business bro who filibusters through a presentation of managerial math is strengthening the objection through the cost associated with the act of objecting.

There could also be an outright refusal to consider the managerial math, which is a problem in its own way, but I think the underlying objection in such a case follows a track that I'm quite familiar with from experience - they would point out that my hour writing the email meant an hour lost for a different priority. It would likely be implied at this point that seeing as how the superior set the priorities to begin with, the eventual conclusion of any discussion was destined to affirm the superior's original set of objectives; the battle ahead of me to change existing priorities promised to be bloody, and forever uphill, with pyrrhic victory representing the closest thing to a positive outcome. This is the worst form of objection to innovation in my mind because most mediocre managers actually think they are asking a smart question - if you do this, what do you have to stop doing? It never occurs to them that questions like this often hold back innovation.

I actually encountered an endorsement of this question recently in a mediocre management book, which should have been named Good But Not Great Questions for Good But Not Great Managers. It sounds good, this question - if you do this, what do you have to stop doing? - but it imposes an unnecessary scarcity consideration onto the topic of innovation, which is inappropriate given that new thinking lives on the infinite side of known boundaries. If I think about how to ask this question without shoehorning the scarcity mentality, I end up with a superior question - why aren't we already doing this? I suppose an alternate formation offers a similar upside - when else can we do this? The power of a program like "15 percent time" is obvious when considering these reframed versions of the merely good question - if you do this, what do you have to stop doing? The answer lies in the inverse - if we don't do this, then we don't innovate. As noted above, it's also often the case that small innovations lose their marginal return in the course of prolonged discussion, debate, or justification. The unspoken value of a program like "15 percent time" is that it should eliminate the need for these questions - there is no discussion required when the employee is encouraged to direct time toward projects that have the faintest hint of innovation. In the context of the coaching example from above, it's also worth noting that the response rate to such an email might improve if those colleagues felt like working on the skill was an acceptable use of their "15 percent time", which is yet another possible benefit to such a program - it creates time to pursue meaningful learning opportunities.

This leads me to my overall point, which is that the biggest barrier for innovation in most cases is talking about it - by definition, innovation is about discovery within the unknown, and I don't consider the unknown among those topics which invite intelligent discourse. Even the managerial math that I outlined above, compelling though it may be in certain cases, seems like it does more harm than good in the way it suggests the possibility of a knowing conversation about an unknowable subject. The only way an organization can demonstrate a commitment to innovation is to set as many of its people as possible to the task, which of course means all of them, and to set them to the task in a way that eliminates any and all known barriers to innovation. I believe a program like "15 percent time" helps move an organization closer to innovation, but in some ways I find the broad definition from 3M ("pursue innovative ideas") too narrow for my tastes. I recommend a variant of this program that encourages employees to use time in a self-directed manner, even if it's as little as 5 or 10 percent, with the only requirement being the self-belief that the activity will someday help the organization. I would clarify that this includes personal and professional development projects, and for organizations that do not allow for remote work I would even recommend allowing "offsite" time to count within the parameters of this program; I would allow anything that did not attract the notice of the local police. I suggest such extremes because ultimately innovation comes down to one necessary ingredient, time, which means a policy whose administrative requirements take time away from itself is self-defeating -  the moment people busy themselves with justifications, the program itself has become the obstacle; busy people don't have time for innovation.