The Idea Driven Blog

Top-down Innovation is Orderly but Dumb

Top-down Innovation is Orderly but Dumb post image

One of my favorite sayings about innovation comes from Curtis Carlson, CEO of SRI International, “Top-down innovation is orderly but dumb, bottom-up innovation is chaotic but smart.” His observation is now informally known as “Carlson’s Law.”

As readers of this blog already know, the same is also true of improvement, but for today, I would like to focus on innovation.

The best evidence I am aware of for Carlson’s Law comes from a study conducted by Sam Stern, a professor at Oregon State University, some twenty-five years ago. For several years, he led a research team at the Tokyo Institute of Technology that studied some two hundred new products and services that had won national awards for creativity. Today, the study remains a wake-up call for any leader who wants to make his or her organizations more innovative.

Stern’s study was funded by the Japan Management Association (JMA), which also helped by giving him unparalleled access into Japanese companies. To this day, the JMA study is one of the largest studies of innovation ever done.

Stern began by sending his team out to get extensive data on each of the innovations. His team interviewed the inventors and direct champions of the idea, but also cast a broad net around each innovation, talking with co-workers, managers, people from different departments – anyone and everyone they could find who had information about how the innovation came to life. Stern had no preconceptions; he merely wanted to get good data on how a large number of innovations in different fields had come about.

The first thing he noticed, which surprised him, was that the majority of innovations were bottom-up. They had been a complete surprise to management, which had not anticipated them in any way.

Stern then put together a panel of high-level Japanese executives, and asked them to go through all two hundred innovations and assess the novelty and impact of each one. When the panel reported back, the novelty and impact of the bottom-up innovations turned out to be far greater than the novelty and impact of the innovations initiated by management.

Furthermore, at many of the companies where one of the award-winning innovations had taken place, Stern had the opportunity to compare these innovations with planned new products or services (i.e., ones that had been initiated by management) which had come out around the same time. He couldn’t help but notice that these planned products were much less innovative, in fact, most were not particularly innovative at all.

The lessons he drew? First, innovative products are far more likely to be bottom-up, while new products and services initiated by management are likely to be much less innovative, or not innovative at all.

Second, Stern realized that the environment for innovation was key and that there was a lot that leaders could do to increase the likelihood of a major innovation occurring in their organizations.

With all the accumulating evidence that bottom-up ideas are where the action is – in both innovation and improvement – it is fascinating how slow the business world has been to respond to this fact, and how little effort managers and leaders generally put into promoting and enabling these kinds of ideas, preferring to pour money and resources into comparatively ineffective efforts to innovate from the top. It is a very costly mistake, for all of us!

Photo by: Dan Mason

Alan Robinson
Alan Robinson
Alan received his Ph.D. in applied mathematics from the Johns Hopkins University and a B.A./M.A. in mathematics from the University of Cambridge in Great Britain. He is a professor at the Isenberg School of Management of the University of Massachusetts – Amherst, and has advised more than 200 organizations in 25 countries on how to improve their idea performance.

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Mark Edmondson   |   25 July 2014   |   Reply

Great post. Which companies would you say are best at fostering a culture of bottoms-up innovation?

Reading this reminded me of a favorite Gary Hamel article, “Innovate Now”. His metaphor for tops-down innovation was the Soviet’s model of central management and planning. Neither is very successful.