Institutional Innovation: White Paper Overview

For more than two decades now we have been trying to adjust, sometimes unsuccessfully to a changed market place that in many respects does not reflect its predecessor, The Industrial Era. Some have labeled our present time the Social Era, which is a sociological outworking of a surge forward in the information age, a service based economy and global business. The dilemma for many organizations is that what worked in the past era is failing to get traction mainly due to an inability to adapt and respond in a timely manner and this results in negative effects on earnings, cost containment and an inability to innovate. This holds true in the sectors of non-profit, for profit, governments and virtually any other organizational type. Authors John Hagel and John Brown with Deloitte Center for the Edge have written a white paper, Institutional Innovation, Creating Smarter Organizations to Scale Learning that addresses a contrast between these two epochs of economic history with a focus on the historic benefits of “scalable efficiency” (benefits of economies of scale) and a new and requisite organizational characteristic, “scalable learning.”

A compelling hook at the very beginning of the paper describes the organizational structure that seeks to govern scalable efficiency: command and control. To the average person who has read any degree of managerial trends in the last decade (or two), the very term, command and control bristles against almost anything considered effective in our present time. When I say effective, I don’t mean can it exist or can you get away with it. What I mean is, does such a structure really translate into organizational value and draw out the best in people, or does it cause people to become professionals at observing the boss, and avoiding them accordingly? The upside of this structure is that it puts systems in place (assuming managerial competence) that create predictability, which worked out well when social, political and economic trends changed more slowly. The problem is, this is no longer the case. The compelling resolution that the authors suggest is “a new rationale of ‘scalable learning’.” The result, they argue (with examples), is that smarter organizations actually benefit from radical and essential change, rather than be harmed by it. The key to this is “increased learning and adaptability” that will result in coveted product and process innovations through the advent of “creation spaces,” which is not a new concept, but may be better suited than ever for addressing the future challenges of organizations of all types. Get your copy of this excellent paper here, or if you would like a quick reference copy with highlights and a note or two, drop me an email.


Hagel, J. III & Brown, J. Institutional innovation: Creating smarter organizations to scale learning.


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