Wednesday, November 26, 2008

Sustaining Innovation: Perspectives From Andrew Hargadon

An interesting thesis of Andrew Hargadon's book How Breakthroughs Happen is that creative breakthroughs in organizations are more the result of innovation than invention. Organizations that stay ahead of the curve foster collaboration that leads to recombinant innovation: ways of assembling old things in new ways. "For these companies," he explains, "innovation isn't a process of thinking outside the box so much as one of thinking in boxes that others haven't seen before" (p. 13).

What kills creative breakthroughs is insularity and a lack of communication. Teamwork fosters innovation by helping participants think in unnoticed boxes. This is particularly the case when team members can "broker" information across disciplines.

One of the greatest threats to trader success and longevity is isolation and insularity. Without the free flow of ideas from different sources and perspectives, individual traders become trapped in limited ways of viewing and doing. Hargadon argues that creativity requires both bridging and building; it is a fundamentally social process. Perhaps that is why I have consistently found that successful traders and portfolio managers have well-developed networks of contacts.

One of the great challenges of the online medium is to create virtual networks that can sustain one's own creative processes. In the right kinds of networks, participants serve as knowledge brokers, combining and recombining ideas and perspectives. If one's trading is a business, it is helpful to understand how successful businesses innovate. A large part of success is situating oneself in the right social networks.
.

7 comments:

yew kock said...

Hi Brett,
Sorry I have to use this page to ask you a question. I read your 3-part article in your Article Section on "A trader's Self-evaluation Checklist". The last part appears to be missing. May I know how to access to this final part of the article and also, any other such related topics that I can read. Thanks.

YK Lim

IDkit aka Ana said...

Brett

In a nutshell, we have to combine the right brain with the left brain to sustain innovation.

A first module course combining the Arts with the Sciences in tertiary institutions would lay this foundation for inventiveness and sustain innovations.

Quote
Leaders in modern organizations attempting to pursue
innovation must recognize that success won’t
come through the individual pursuit of invention. As
the science fiction author William Gibson once said,
“The future is already here, it’s just unevenly distributed.”
The firms that best exploit their innovation
networks will shape that future.

Russell said...

Morning Brett,
As an insulated and a tad isolated trader, I am very familiar with your thoughts. To what extent does personal blogging and creating an environment with others fit in?

IDkit aka Ana said...

Brett
As to how your post fits in with your thinking, as well as mine is this:

1. If there is no sharing of knowledge, there will be no passing of the baton , so to speak, to successors who in turn pass on and share their knowledge , for posterity to improve on.

2.Imperial old China is a classic case in point. China invented many scientific papers on , eg printing, the compass, gunpowder, etc. However due to close and selfish pursuits of the Mandarins, their knowledge died with them and the nation instead of progressing, regressed over the centuries, while the Western scientists published their papers for posterity to share and the West progressed ahead of the old China.

The new China has now opened its door to the the world and see what miracles have emerged, with China now at the brink of overtaking the biggest economic power in the world!

3. Being a loner trader, which I am one, does not preclude writing and sharing at forums or weblogs to participate and learn from each other.



Humans cannot live by bread alone ; we need social interaction to have a healthy attitude in life, my thinking.

Brett Steenbarger, Ph.D. said...

Hi YK,

The checklist is not a 3 part article; sorry. It's the article on my personal site "A Personality Questionnaire for Traders" that is in 3 parts. All 3 are condensed into a single Word file.

Brett

Brett Steenbarger, Ph.D. said...

Hi Russell,

You make a good point; I find that the interactions I have online do help with jogging my mind and aiding fresh perspectives.

Brett

Brett Steenbarger, Ph.D. said...

Excellent points, Ana; thanks for the perspective--

Brett