Why Managing Innovation is Like Theater

By Robert D. Austin and Lee Devin

A stage production and the development of your next product have a lot in common. If you don’t know where you’re going, any map will do.(1) This conventional wisdom sounds right to many managers. It highlights the safety of having a clear objective for your management actions. It implies that all management actions are likely to be confused and inefficient if you don’t have a clear objective. If you don’t have a good fix on your destination—be it a product or service, a strategic or competitive outcome, or anything else—you may as well not start the journey.

For a lot of your work, though, this so-called wisdom is wrong. Why? For one thing, you can’t always know your destination in advance. Whether you’re-designing a new product, running a business in volatile conditions, operating a process that might encounter unforeseen inputs, or just trying to figure out what to do with your life, the journey usually involves exploration, adjustment, and improvisation. Situations in which you don’t or can’t know the results in advance are common and consequential. All businesses face them.

If you’re not too narrow in what you’re willing to call “management,” you can manage these situations. You can enhance effectiveness and efficiency, and you can improve the likelihood of valuable outcomes. However, the methods you’ll use will differ from, and sometimes conflict with, methods that work when you do know where you’re going.

There is an increasingly important category of work—knowledge work—that you can best manage by not enforcing a detailed, in-advance set of objectives, even if you could. Often in this kind of work, time spent planning what you want to do will be better spent actually doing (or letting others in your charge do), trying something you haven’t thought out in detail so you can quickly incorporate what you learn from the experience in the next attempt. In appropriate conditions—only in appropriate conditions—you can gain more value from experience than from up-front analysis. In certain kinds of work, even if you can figure out where you’re going and find a map to get you there, that may not be the best thing to do.

Whenever you have no blueprint to tell you
in detail what to do, you must work artfully.

Forging ahead without detailed specifications to guide you obviously requires innovation, new actions. We take this observation one step further by suggesting that knowledge work, which adds value in large part because of its capacity for innovation, can and often should be structured as artists structure their work. Managers should look to collaborative artists rather than to more traditional management models if they want to create economic value in this new century.

We call this approach artful making. “Artful,” because it derives from the theory and practice of collaborative art and requires an artist-like attitude from managers and team members. “Making,” because it requires that you conceive of your work as altering or combining materials into a form, for a purpose.(2) Materials thus treated become something new, something they would not become without the intervention of a maker. This definition usually points to work that changes physical materials, iron ore and charcoal into steel, for instance. But the work and management we’re considering don’t always do that. Instead they mostly operate in imagination, in the realm of knowledge and ideas.

While artful making improves anything that exhibits interdependency among its parts, we’re not primarily concerned with heating metal and beating it into shapes. We’re more concerned with strategies, product designs, or software—new things that groups create by thinking, talking, and collaborating.

Artful making

Any activity that involves creating something entirely new requires artful making. Whenever you have no blueprint to tell you in detail what to do, you must work artfully. A successful response to an unexpected move by a competitor requires artful activity; so does handling a sudden problem caused by a supplier. An artful manager operates without the safety net of a detailed specification, guiding a team or organization when no one knows exactly where it’s going.

In the 21st century, it’s a simple fact that you often don’t know where you’re going when you start a journey. A manager who needs to be handed a clear set of objectives or a process specification is only half a manager (and not the most important half). To know where you’re going by the time you start, that’s an amazing luxury and you probably can’t afford it. Anyway, if you think you know where you’re going, you’re probably wrong. The need to innovate, to make midcourse corrections, and to adapt to changing conditions are the main features of a growing part of daily work.

Many people in business admit that parts of their work are “more art than science.” What they often mean, alas, is that they don’t understand those parts. “Art” used in a business context usually refers to something done by “talented” or “creative” people who are not quite trustworthy, who do work that resists reasonable description. There’s often a disparaging implication that art-like processes are immature, that they have not yet evolved to incorporate the obviously superior methods of science. The premise that underlies this point of view equates progress with the development of reliable, rules-based procedures to replace flaky, unreliable, art-based processes. We reject this premise.

Our close examination of art-based processes shows that they’re understandable and reliable, capable of sophisticated innovation at levels many “scientific” business processes can’t achieve. A theatre company, for instance, consistently delivers a valuable, innovative product under the pressure of a very firm deadline (opening night, eight o’clock curtain). The product, a play, executes again and again with great precision, incorporating significant innovations every time, but finishing within thirty seconds of the same length every time. And although art-based processes realize the full capabilities of talented workers and can benefit from great worker talent, by no means do they require exceptional or especially creative individuals. Nor does great individual talent ensure a valuable outcome.

A company of exceptionally talented big stars can (and often will) create a less effective play than one made up of ordinarily talented artists who have, through hard work, learned how to collaborate. Business history too provides numerous examples of underdog upstarts out-collaborating and out-executing companies with much better resources; and few (if any) companies have ever worshiped more devoutly at the altar of raw individual talent than Enron, one of the most spectacular corporate failures in history.(3)

As we will show, underlying structural similarities in costs make theatre rehearsal and other collaborative art processes better models for knowledge work than more rules-based, scientific processes. The key to understanding these similarities is something we call cheap and rapid iteration.

The cost of getting it right

The cost of iteration—the cost of reconfiguring a process and then running it again—significantly impacts the way we work. Reconfiguring an auto assembly process can involve buying and installing new equipment, which can be pretty expensive. So, automakers usually do a lot of planning before they commit to a configuration. They don’t want to have to reconfigure very often. They try to “Get it right the first time.”

On the other hand, some software development processes are designed nowadays so that they can be reconfigured cheaply and quickly. Developers generate new versions of a software system as often as needed. Technologies that allow new versions to be rebuilt easily keep the cost of iteration low. When enabling technologies help keep the cost of iteration low, we don’t need to worry as much about getting it right the first time. Instead, we can try things, learn from them, then reconfigure and try again. Because it doesn’t cost much to iterate, the value of doing is greater than the value of thinking about how to do. Cheap and rapid iteration allows us to substitute experience for planning. Rather than “Get it right the first time,” our battle cry becomes “Make it great before the deadline.”

Management researchers often talk about cheap and rapid iteration as cheap and rapid experimentation. The ability to run experiments cheaply and quickly is an important benefit when the cost of iteration is low. Simulation technologies, for example, allow automakers to run virtual crash-testing experiments to determine the safety implications of many car body structures, more than they could afford to test with actual cars.(4) But experimentation, though important, is only part of what is achieved by cheap and rapid iteration. If you think and talk about iteration as experimentation, low cost of iteration seems to make business more like science. Its broader effect, though, is to make business more like art.

Here’s why: Before you can crash test virtual cars, you must create virtual cars. Cheap and rapid iteration lets you test cars more cheaply, but it also lets you create them more cheaply, and in many more forms. The creation of things to test—in scientific terms, the generation of hypotheses—is a fundamentally creative act. In many business situations, the hypothesis, problem, or opportunity is not well-defined, nor does it present itself tidily formed; you must therefore create it. Even when a problem or opportunity appears well-defined, often you can benefit from conceiving it in a new form. The form you conceive for it—the idea of it you have—will determine how (and how well) you solve it. Cheap and rapid experimentation lets you try new forms; cheap and rapid artful iteration helps you create new forms to try.

A company of exceptionally talented big stars can…create a less effective play than one made up of ordinarily talented artists who have, through hard work, learned how to collaborate.

Artful making (which includes agile software development, theatre rehearsal, some business strategy creation, and much of other knowledge work) is a process for creating form out of disorganized materials. Collaborating artists, using the human brain as their principal technology and ideas as their principal material, work with a very low cost of iteration. They try something and then try it again a different way, constantly reconceiving ambiguous circumstances and variable materials into coherent and valuable outputs.

Artful making differs from what we call industrial making, which emphasizes the importance of detailed planning, as well as tightly specified objectives, processes, and products. Its principles are familiar: Pull apart planning and production to specialize each; create a blueprint or specification, then conform to it; don’t do anything before you know you can do everything; “Get it right the first time.” When industrial makers conform to plans and specifications, they say their products and processes have “quality.” The principles of industrial making are so embedded in business thinking that they’re transparent and we don’t notice them. We apply them reflexively; they are “The way we do things.”….Industrial methods can distort reality and smother innovation. Artful and industrial making are distinct approaches and each must be applied in the appropriate conditions.

It’s important to recognize that artful and industrial making are not mutually exclusive. Artful making doesn’t replace industrial making. Artful making should not be applied everywhere, nor should industrial making. They complement each other and often can be used in combination. Complementary doesn’t mean interchangeable, though. As opportunities for artful making multiply with the expansion of the knowledge work sector of business, managers and other workers must be careful not to attempt to solve artistic problems with industrial methods, and vice versa.

The Four Qualities of Artful Making

RELEASE.

The first (and perhaps the most counter-intuitive) quality of artful making, essential to the other qualities. A method of control that accepts wide variation within known parameters. Release contrasts with restraint, the usual method of industrial control.

COLLABORATION.

The quality exhibited by conversation, in language and behavior, during which each party, released from vanity, inhibition, and preconceptions, treats the contributions of other parties as material to make with, not as positions to argue with, so that new and unpredictable ideas emerge.

ENSEMBLE.

The quality exhibited by the work of a group dedicated to collaboration in which individual members relinquish sovereignty over their work and thus create something none could have made alone: a whole greater than the sum of its parts.

PLAY.

The quality exhibited by a production while it is playing for an audience; or, the quality exhibited by interaction among members of a business group, and ultimately between the group and the customer.

Excerpted from Artful Making: What Managers Need to Know About How Artists Work” [Amazon] by Rob Austin and Lee Devin, with permission from the publisher.