Managing Excerptations: Resource Dependence

Innovation Resource Dependence Investment

I started my blog to kick my non-writing habit. I've now got enough material to start blocking out a book (hooray!). So while I'm doing that, I thought I'd start a small series looking at some of the books that have influenced me.

"Managing expectations" is one of my least favourite managerialisms. I cringe whenever I hear it. Expecting is about hope, which is the only thing that keeps many professionals going. We take what we can from life and do our best with it

So this series is about some of the excerpts that caught my eye over the last six months. They're part of what gives me hope about the profession of management

Hands up if you've read Clayton Christensen's 1997 book 'The Innovator's Dilemma'?

In a crowded meeting room, where people are busy talking disruption this and disruption that, my guess is only a few would raise their hands. We're not experts in what we read, but making the effort to read at least gets us into the conversation.

One of the ideas in the book that made me sit up and take notice was that of resource dependence.

"... most proposals to innovate are generated from deep within the organization not from the top. As these ideas bubble up from the bottom, the organizations middle managers play a critical but invisible role in screening these projects.

Managers careers receive a big boost when they play a key sponsorship role in very successful projects. Projects that fail because the market wasn't there have far more serious implications for managers' careers.

Hence middle managers tend to back those projects for which market demand seems most assured. They then work to package the proposals for their chosen projects in ways geared to win senior management approval.

As such, while senior managers may think they're making the resource allocation decisions, many of the really critical resource allocation decisions have actually been made long before senior management gets involved."

At the time read this I was working horizontally and vertically across a large organization providing risk advice to the enterprise level investment process. Soon enough I began to see how the middle echelons of the organization played their 'invisible role'.

It reminded me of the famous phrase from Adam Smith that is selectively quoted by many an economist. Amartya Sen put this habit best when he wrote '... the standard view of Smith that has been powerfully promoted by many writers who constantly invoke Smith to support their view of society".

But this post isn't a rant against one-eyed Smith quotes (I'll save that for another day). After observing all the small interventions on innovation proposals, and considering all those I didn't observe, I came to the conclusion that I needed to find another job.

Innovation in large organizations is like the joke about the psychologist and the lightbulb,

Q: How many psychologists does it take to change a lightbulb?

A: One, but the lightbulb has got to want to change.

Do I think innovation in large organizations is doomed? No, but I have a very healthy respect for the impact of bounded rationality and decision making.

What do I think the way forward looks like?

Well, put it this way, think about what happens when you combine the 'lead a horse to water' and 'whipping a dead horse' quotes.

Image via Gratisography