BUREAUCRACIES NEVER FORGET:

Remember to Forget, Borrow, and Learn: That's the formula for innovation offered by the Tuck School's Dr. Vijay Govindarajan, a world authority on the subject (Marshall Goldsmith, 3/28/07, Business Week)

My good friend Dr. Vijay Govindarajan is a professor at Dartmouth's Tuck School and a world authority on strategic innovation. He is also one of the best executive educators and business-school professors in the world. He and I recently spoke about innovation in older businesses. Edited excerpts of our conversation follow: [...]

What is the hardest part of executing innovation?

For a breakthrough idea to have a chance, there must be a careful approach to building the new business unit .The new business must be designed in such a way that they can forget, borrow, and learn. They are the three fundamentals. They must forget the parent company's success formula, borrow the parent's resources, and learn how to succeed in a new environment. It's kind of like when you leave home to go to college. You forget your parent's rules, borrow their laundry facilities, and learn how to succeed on your own terms.

What is the most common mistake that gets made when companies try to innovate?

They underestimate just how hard it is for an organization to shake itself loose from its past. Organizations understandably become very complex machines--machines hard-wired to excel in the current game. As a company gets bigger and bigger, employees get more and more specialized, and the number of people who understand how the machine works as a whole gets smaller and smaller.

And then along comes an idea for an innovative new business. Step 1 in building it is to destroy the hard-wiring. In creating the new business unit, you must be questioning every assumption about the way the core business works. That's a tall task that we call "forgetting."

Why do you say that "forgetting" is one of the most important steps for innovation?

I once had a baseball coach who told me that he couldn't teach me how to hit until he managed to get me to forget all of the bad habits that I picked up on the elementary school playground. This coach understood that forgetting is often a prerequisite for learning. Forgetting is crucial for innovation because at its core, innovation is an experiment-and-learn process. When a company clings to established mindsets and assumptions--when it fails to forget--it cannot learn.

So how do you get an organization to "forget"?

To get an organization to forget, you have to change the underlying rules that control how an organization behaves--things like how it hires and promotes, how it confers status, how it plans, how it evaluates business performance, how it awards bonuses, the core values to which it aspires, and more.

Which is why every federal bureaucracy should sunset and start over again from scratch every few years.

Posted by Orrin Judd at March 28, 2007 12:00 AM