At the Table or on the Menu: The Politics of Innovation

Wednesday, August 1, 2012

    

Political. Self-interested. Calculating. Aggressive. Machiavellian. Few people use these words to describe innovation. Fewer still take pride in these traits.

 

Yet developing more sustainable products or processes depends on the willingness and ability to engage in the politics of innovation.

Most stories of innovation describe entirely new markets, like the personal computer or the Internet, where brilliant ideas can build a new world where none existed before. Sustaining innovations, on the other hand, must overturn entrenched technologies and practices defended by equally entrenched competitors.

In existing industries, innovation changes the balance of power - for every gain there is a corresponding loss. This means, as organizational scholar Jeffrey Pfeffer writes in Managing with Power:

"Unless and until we are willing to come to terms with organizational power and influence, and admit that the skills of getting things done are as important as the skills of figuring out what to do, our organizations will fall further and further behind."

He's talking about the need to engage in the politics of organizations but, in pursuing sustaining innovations, it is equally important to engage in the politics of industries - to shape the standards by which new innovations are measured, certified, legislated, and even mandated. Become adept at the political process or risk being washed out.

Take organics. In principle, a well-intentioned practice. It is a $30 billion food market battling for shelf space and profits against existing food companies. What defines organic? Ingredients? Farming practices? Sustainable labor practices? In response to these questions, the Organic Foods Production Act of 1990 created the 15-member National Organic Standards Board, with the authority to make recommendations on policies regulating the production and distribution of organic food and products. The board has stated:

"The program will be based on federal regulations that define standard organic farming practices and on a National List of acceptable organic production inputs…. It will be illegal for anyone to use the word "organic" on a product if it does not meet the standards set in the law and regulations."

Stephen McGee of the New York Times described the rise of big company influence in organics, and the domination of the National Organic Standards Board by corporate interests:

"Over the last decade, since federal organic standards have come to the fore, giant agri-food corporations like these and others - Coca-Cola, Cargill, ConAgra, General Mills , Kraft and M&M Mars among them - have gobbled up most of the nation's organic food industry. Pure, locally produced ingredients from small family farms? Not so much anymore."

Moreover, these corporations have come to dominate the board that determines what organic means.

"As corporate membership on the board has increased, so, too, has the number of nonorganic materials approved for organic foods on what is called the National List. At first, the list was largely made up of things like baking soda, which is nonorganic but essential to making things like organic bread. Today, more than 250 nonorganic substances are on the list, up from 77 in 2002," McGee writes.

Until true organic farmers can learn to organize, build a base of power, and engage in the politics of their industry, it's like the weather: everyone complains but nobody does anything about it.

We can complain about the undue corporate influences at work: more evidence that existing interests will use their power to resist change or, if change is inevitable, shape it to their advantage. Thus one more reason to disdain politics.

Or we can acknowledge that politics and commerce are inextricably twined, that politics plays an essential role in setting industry standards that will shape the path of innovation, and that to succeed we must learn to play - and win - at this game.

This is true in the evolution of any industry. Thomas Edison drove the most famous standards war in his fight against alternating current, but the fight over standards shaped many innovations. From computing (the WinTel standard), to electronics (anyone remember VHS vs Beta?), to corn-based ethanol, to emerging innovations in healthcare, organics, energy, and water.

Without the capacity to see existing and emerging issues, to build the necessary coalitions and consensus, and to shape policy and wield power in ways that create winners and losers, sustaining innovations will wither and die. As Jim Rogers, CEO of Duke Energy and alternately hero or villain in clean energy innovation, says: "You're either at the policy table, or on the menu."

 
 
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AndrewHargadonAndrew Hargadon is the Charles J. Soderquist Chair in Entrepreneurship and Professor of Technology Management at the Graduate School of Management at University of California, Davis. Hargadon's research focuses on the effective management of innovation, particularly sustainable innovation, and he is author of numerous articles, essays, and the book How Breakthroughs Happen: The Surprising Truth About How Companies Innovate (Harvard Business School Press).

Read more about Andrew Hargadon
 

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