Musings on Entrepreneurship and Innovation
Tuesday, January 30, 2007John Hagel on Brokerage and Closure
John Hagel wrote recently of the work by Ron Burt on brokerage across social networks. In his post, John notes:
...our firms are much more optimized for closure than brokerage, yet enhanced performance, especially in times of great change, hinges upon shifting the balance more in favor of brokerage activity.
I'd love to see how the framework of brokerage and closure might apply to the opportunities for, and challenges to, Open Innovation.
For instance, in How Breakthroughs Happen, Andy Hargodon asserts:
Technology brokering describes a strategy that firms have developed to expressly pursue...recombinant innovations. This strategy involves bridging different worlds. By working in a range of different industries or markets, firms are in a better position to see when the people, ideas, and objects of one world can be combined in new ways to solve the problems of another.
But, as I understand Burt, network closure is required in order to translate opportunity into action. In other words, if brokerage creates real options, closure is required to execute an option. Execution requires the commitment of resources, which makes such resources unavailable for other uses - at least for a period of time. Consequently, closure is a prerequisite for creating value, but at the (temporary) cost of openness and flexibility.
I suspect that a two-valued description of a firm as having an "open" or "closed" system of innovation is too simple. I imagine a more realistic description would paint a picture of a dynamic mix of becoming more open and becoming more closed.
The Problem with Evidence-Based Decision-Making
Dave Pollard at How to Save the World writes:
Evidence-Based Decision-Making is a great idea. But what evidence, according to whose interpretation, arrived at how, in what context, assessed through what decision-making process, and including whom?
The nice thing about valid evidence, though, is that it can be tested. However, there is risk in our tendency to see evidence selectively and to protect our preferred evidence from challenge. As Dave points out, critical thinking skills, empathy, and humility can go a long way toward mitigating the risk that Evidence-Based Decision-Making becomes yet another club with which to bludgeon others into submission.