Institutional innovation, collaboration and “creative spaces”

In recognition that, “Institutions are embedded in the cultures, technologies, and infrastructures of their time, and the emergence of new social and technological infrastructures often catalyzes fundamental institutional innovations,” John Hagel III and John Seely Brown‘s new paper on  “Institutional Innovation” argues that institutions must become more intelligent and collaborative to keep pace with rapid technological and societal change.

First, the authors argue that traditional institutional architectures are out-of-date in the modern world:

 “Scalable efficiency has been a winning model for the past two centuries. However, it relies on centralized governing systems, rigid hierarchies, and a paradigm of long-term planning and forecasting. While effective in times of stability and predictability, these systems break down during times of rapid change and uncertainty. Centralized leadership is unable to dictate all of the requisite changes quickly and, as a result, can, and probably will, become dysfunctional and massively inefficient during times of uncertainty and change.”

“As the pace of change accelerates, the value of any stock of knowledge depreciates faster and faster. Today, competitive advantage is not based on stocks of knowledge, but having access to flows of knowledge to enable up-to-date information that enables adaptability.”

The central focus and recommendation of the paper is on creating an institutional ecosystem that allows for both more internal and external collaborations around so-called “creation spaces”:

 “Institutional innovation requires embracing a new rationale of ‘scalable learning’ with the goal of creating smarter institutions that can thrive in a world of exponential change. Through new architectures, organizations can build ‘creation spaces’ that help facilitate (rather than limit) interactions and relationships, allowing organizations to increase the flow of information within and across their organization’s walls to increase learning, adaptability, and downstream product and process innovations.”

More importantly they argue (with a hint toward crowd-sourcing) that:

 “Creating architectures of relationships reaching beyond the walls of our institution is one of the most powerful ways to tap into richer and more diverse flows of knowledge and accelerate learning.”