Innovation Ecosystems: Why Culture is the Key Element

Dear readers, I want to introduce new theme that will be covered in this blog. It is Innovation Ecosystems. I will be blogging about it in many senses:

  • benchmarking best practices,
  • uncovering frameworks and secret sauces of building an entrepreneurial ecosystem,
  • interviewing experts,
  • visualizing and analysing reports and many more.

Today, as always, I’m going to start with nice infographic by Accenture and Report created by Jeanne G. Harrisis (managing director, Information Technology Research at the Accenture Institute for High Performance in Chicago) and Iris Junglasis who is an Assistant Professor at Florida State University and a research fellow at the Accenture Institute for High Performance.

They recently prepared an analysis called Decoding the Contradictory Culture of Silicon ValleyThe key question for this report was “What makes Silicon Valley such an exceptional hothouse for innovative new businesses?

I want to stress that there are different ways to analyze innovation ecosystem. You can think abou best practices such as Silicon Valley or Israeli entrepreneurial ecosystem. You can think about frameworks or key pillars that form a system. You can think about historical development and trends that could be analyzed considering successful examples. But I would like to start from one particular issue. This issue is Culture. I personally believe that without culture institutions, infrastructure, funds, business incubators, companies simply will not work. Because innovations is always about people, their relations, their cognitive and emotional intelligence, their values and beliefs. So, what makes Silicon Valley culture so unique?

Accenture Silicon Valley Innovation Ecosystem

Accenture Silicon Valley Innovation Ecosystem

Authors’ findings are the result of methodology based on more than 600 interviews with IT experts from Valley. I want to provide a quote of their findings. It’s very interesting and self-explanatory. However, I will make my short comments. “A complex mix of five characteristics has made Silicon Valley difficult to replicate.

  • Executives in the valley are congenial and relaxed but will nevertheless work intensely for long hours, leading to high productivity and relentless innovation. Comment: Hard work! Remember? Keep drilling and you will find you way to the gold mine. Just never give up.
  • Despite their deep commitment to their work and colleagues, executives are essentially free agents with no strong allegiance to one company, promoting a mobile workforce that fosters a greater exchange of ideas and information across the Valley. Comment: I personally think that ideas’ cost is nothing. What really matters is ideas implementation. That’s why free agents and free flow of ideas is a unique cultural thing. For instance, in Russia many entrepreneurs are frightened to uncover their ideas because they think it will be stolen. And sometimes it is. However, I think it is an attribute of emerging ecosystem.
  • Companies and individuals can be ruthless competitors, but also cooperate regularly toward larger goals. This leads to information-sharing across organizational borders, leading to greater cross-fertilization, and innovation. Comment: I think this is a bit overstated. Even though there are cooperations. It’s firsty business and business counts money. Personally I don’t like it, but this is truth of life. If some famous companies decided to cooperate in order to create Blu-Ray they already know how they will earn money from it. Large visions exists, but they also co-exist with monetary goals.
  • People in the Valley’s tech industry know that failures are inevitable, but are also confident that any problem can eventually be solved. The work culture allows prudent risk-taking, higher resilience, greater experimentation and innovation, and more ‘shots on goal’ that increases chances of success. Comment: risk-taking culture. It’s very very very important. If you’re educated and grown under the culture of “collective irresponsibility” (the case of many former Soviet Union people) or in the poverty trap (the case of many African Countries and India, etc) you have a bit other priorities. I’m not saying that it’s bad or good. I think that risk-taking culture is the most suitable culture for startups. If country is willing to create an entrepreneurial ecosystem, it should start change this firstly!
  • Money remains the motivator, but Silicon Valley IT executives find fulfillment in being recognized for their creativity and innovation. The best of the talent is attracted mainly by work that is interesting, worthwhile and challenging. Comment: non-monetary motivation is essential. Remember Daniel Pink’s TED talk about it. Autonomy, mastery and purpose. These are key elements of motivation when you’ve reached sustainable income level. If not, keep working in order to reach it. Then you will be able to feel that you have much more freedom to experiment and fail.

In conclusion, I want to remember a quote by Victor Hwang (author of Innovation Rainforest) who said that economies thrive when culture overcomes social barriers and fosters connectivity, trust, and collaboration between diverse people… Think about that.

I would like to finish by providing links to two videos. First is the TED clip by Daniel Pink. The second one is the RSA Animate video, adapted from Dan Pink’s talk at the RSA. It illustrates the hidden truths behind what really motivates us at home and in the workplace.

Good luck and see you soon!

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