IN THIS ISSUE:

• Letter From Sarah
• Feature Article: Innovation and Complexity - 3 Ways to Ramp Up Your Mindset
• Out of the Box
• Events and Resources
• The Edison Awards
• About Sarah Caldicott

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Dear Innovator:

When our family first got a home computer, my dad used to spend hours on weekends playing a computer game called "Chaos." I always thought this was a really bizarre thing to do with your free time. Playing sports or spending time with my friends ranked much higher on my list.

But it turns out my dad had a method to his madness. Behind the scenes of this Chaos game, my dad was actually adding to the power of what neuroscientists today would call his "schema." My father (now retired) was an accomplished lawyer who had to deal with complex thickets of facts, nuances, and personalities.

Looking back at all that time spent with his Chaos game, I see how its principles added to my dad's formidable ability to solve complex legal challenges. His schema was greatly enhanced by his gaming abilities, his love of mystery novels, Scientific American, National Geographic, and more. As with Edison, the time my dad spent developing his schema significantly enhanced his ability to see interdependencies and patterns.

The Schema Helps Us Address Complexity
In simple terms, a schema represents the mental space of our expertise and deep knowledge. A schema is the cognitive space which connects all the cool stuff we know how to do, and all the fun stuff we like to do. Although the schema has no anatomical home, the network of neural connections which comprise the schema helps us spot interdependencies between ideas. The neural connections represented by the schema enhance our ability to combine and recombine ideas rapidly when we're presented with a new challenge.

Perhaps most importantly, neuroscientists tell us the schema is a crucial governing force in our ability to handle complexity.

Handling Complexity Is Increasingly Crucial
Today, complexity surrounds us. We read about complex issues in the newspaper and online. (Remember the weeks of BP's bumbling?) We hear about it as our colleagues - and children - face job markets governed by global economic conditions. We also stare complexity in the face as we consider how to use collaboration as a vehicle for undertaking innovation in our organizations, no matter how large or small. (At right...a representative from the Iowa Association of Business and Industry talks with me about how peer-to-peer networks enhance innovation, and help address complexity.)

In this month's feature article I describe three ways we can begin to effectively address complexity by building our "schema." The article draws upon research conducted by Jeanie Egmon, co-author of The Prepared Mind of a Leader and Director of the Complexity in Action Network at Northwestern University. I recently interviewed Jeanie, and you can find the link to a video podcast of the interview in the article. The first in a two-part series, the feature article focuses on 3 steps we can all take to develop a mindset that can successfully handle complexity. These same steps were used by Edison and his collaboration teams.

Connecting Creativity and Complexity
This month's Out-of-the-Box segment offers another look at Creativity, and the diverse facets which constitute it. After addressing "uniqueness" in the May Out-of-the-Box edition of Edison's notebook and "ambiguity" in the June edition, a third driver of Creativity which I take up this month is "inner-directedness." Read how Netflix has created an entire work culture around inner-directed employees. Learn what this means for the ability of Netflix to handle increasing facets of complexity in the business world, and how you can begin to consider your own inner-directed qualities.

Don't forget...September kicks off the 2011 Edison Awards nomination season!Check out the new online videos in this month's Edison Awards section including actual segments from the April 2010 awards program. See former P&G CEO A.G. Lafley in action, along with many other innovators who were honored this year!

In Events and Resources, follow the link to my guest blog post on "How to Think Different, Edison Style." Plus, if you are a Twitter maven, now you can follow me @SarahCaldicott. Hope to see you all soon on my Twitter Deck! 

PS: Please share this newsletter with a co-worker or a friend!

Feature Article - Part 1 - Developing a Mindset for Complexity: 3 Ways Innovation and Complexity Connect

(click here to view past newsletter issues)

A few days ago, I read a rather odd Discussion Forum entry on one of the LinkedIn groups I belong to. A group member asked: "Is multi-tasking killing innovation?"Hmmmm.

This question offers an interesting lens for the subject of this month's featured topic: "Complexity." To win at driving innovation we each have to win at handling complexity, too. Multi-tasking will never get us there...not in a million years. According to experts, multi-tasking is defined as a process of jumping back-and-forth between things we're already familiar with. But Innovation - and complexity - represent different animals altogether.

Viewed from this perspective, another way for my LinkedIn colleague to pose his question might be: "How can we get better at handling complexity, so we can drive more innovation?"

Edison was a master at addressing complexity. He adopted several methods which modern management science - and neuroscience - tell us are highly effective at handling complexity. He taught these methods to his employees, and you can learn them, too.

Handling complexity has never been more crucial. We face complex work environments, complex technological environments, and complex economic environments - sometimes all in the same day! Given the increased complexity we face, fewer and fewer innovations today can be developed within only one area of expertise. Increasingly, solutions must span boundaries that require bringing individuals from multiple disciplines together. Collaboration is itself a complex endeavor, and crucial to successful innovation. So even to collaborate effectively, we must handle complexity effectively.

This article focuses on 3 of 6 specific steps Edison took to jump-start his brain's ability to handle complexity. These first 3 steps focus on ways to successfully reorient our mindset and thought processes. The second 3 steps - which I'll take up in the September edition of Edison's Notebook - address specific processes that drive success at handling complexity at the team or enterprise level.

In outlining the steps Edison took, I draw upon recent research conducted by Jeanie Egmon, co-author of The Prepared Mind of a Leader, and Director of the Complexity in Action Network at Northwestern University. Jeanie's work is quoted in Innovate Like Edison, and you can view a video podcast of Jeanie and me talking about complexity by clicking here.

Preparing Your Mind to Handle Complexity: The Schema
Jeanie Egmon defines one's ability to deal with complexity as "...the recognition of interdependencies. Spotting them, creating them, and leveraging them." However, she also indicates that "...to tap into the value of these interdependencies, we need to be able to handle cognitive complexity." And handling cognitive complexity requires some preparation.

Egmon states the fastest and most efficient way to amp up our ability to handle cognitive complexity is to work on diverse projects at the same time. Having multiple endeavors underway simultaneously enhances one's ability to spot patterns and interdependencies. By having multiple projects in play, we develop what Egmon calls a rich "schema."

A schema is a cognitive construct - a cluster of thoughts or projects all being undertaken at the same time in your mind. Egmon says a schema "...is like a portfolio: the richer and more diverse it is, the more you can profit from it."

Edison worked on multiple projects simultaneously throughout his career. It drove tremendous productivity and made him "very prolific of new ideas. "Edison's own schema reflected a rich combination of his work with sound, with electricity, and with moving images. It included his understanding of chemistry...even his fascination with planting acres of gardens to fuel his laboratory research. According to Egmon, Edison's passion for fishing even counts in his schema!

Egmon indicates that two important benefits emerge from developing a rich schema. The first is a sense of ease in generating robust solutions and ideas. Egmon says, "People who work on multiple problems have richer schemas. They have more to pull from and they can combine and recombine ideas with ease."

Secondly, Egmon's research revealed that the speed with which desirable solutions can be developed is increased." Research shows that if you're working on a diversity of things - particularly if they're diverse in terms of their challenge level - the brain gets really good at killing two birds with one stone. While you're working on one thing, the other things are going on in the back of your mind."

Step 1: Create Learning Goals You're Passionate About
So, how do we begin developing our schema? Egmon suggests we start by building upon the things we love, as Edison did. As demonstrated in Edison's first competency of innovation - Solution-centered Mindset - Edison aligned his work goals with his learning goals. His projects reflected the concepts he was passionate about pursuing. In everything he endeavored, he sought to learn. By interconnecting working and learning, Edison created a "flow" of inspiration and momentum that - despite obstacles and setbacks - had him view all learning as fun. He said, "I never did a day's work in my life. It was all fun."

As you think about what learning goals you could create to further develop your schema, consider the findings of Dr. Richard Restak, a clinical professor of neuroscience at the George Washington University Hospital School of Medical and Health Sciences. Restak's research suggests we often prematurely abandon our goals because they are not designed robustly enough to mobilize the brain.

For the brain to organize behavior in an optimum way, our goals must be connected to an emotional component and a rational component. By having both an emotional and a rational component to our goals, the prefrontal cortex of the brain aligns with the limbic system. This alignment maximizes the likelihood of remembering the goal - and translating it into behavior.

Here is how the linkage between the emotional and rational components of one of Edison's goals might have looked. For a project he was undertaking for the insurance industry in the early 1870's, Edison's goal might have read this way:

"Generate money by inventing a new tool that insurance agents can use to write more quickly (rational component) and invest these funds in the new laboratory I want to build at Menlo Park (emotional component)."

See how this works? Ultimately, Edison filed 3 patents which brought document duplication to the insurance industry - and the world -- in 1873. And Edison funneled the proceeds into the (now) world-famous Menlo Park laboratory he opened in 1876. By consistently aligning his goals and passions, Edison added to his schema with every project he undertook.

To learn more about developing effective learning goals, check out this month's Out-of-the-Box segment which describes how employees at Netflix successfully stay ahead of complexity through the goals they set and the way they work.

Step 2: Cultivate Your Schema By Keeping a Notebook
Importantly, expanding your schema does not involve just actions or words. The growth of the schema can be dramatically enhanced through use of visuals and images. The schema itself represents a vast neural network of connections...linkages that bring together ideas, locations, memories, experiences, and more. Egmon states, "Drawing things helps the brain translate from the abstract to the real." By adding "visual representations" to the schema, the brain shifts its way of connecting ideas. It begins treating the ideas as if they were real, enhancing the individual's ability to talk about the ideas and "translate" them.

Egmon says that to capture the value of one's schema, the individual "...must not only translate the absolute meaning, but translate the value, translate the context, and translate how these things synthesize and can come together in the real world." Drawing your ideas on paper - or on a computer - dramatically enhances this ability.

Edison intuitively recognized this. Edison and his teams documented their ideas almost daily using notebooks drawings. The notebook image at right was drawn by Edison, reflecting his conceptualization of curly shapes for the filament he was designing for the incandescent electric light. (Image courtesy of the Edison Papers.)

Historians have recovered hundreds of notebooks containing Edison's thoughts, experiments, and drawings with over 900 notebooks attributed to Edison and his collaborators across a 62-year period.

Step 3: Further Activate Your Schema Through Reflections in Solitude
Edison said, "The best thinking has been done in solitude. The worst has been done in turmoil." Edison consciously spent time in solitude, daily. Sometimes this meant hours spent behind a closed door...or just going fishing!(Photo courtesy of Edison Papers.)

Although to the modern eye these hours in solitude might be viewed as unproductive or wasteful, to Edison and his teams it was just the opposite. Solitude time represented acceleration time...acceleration of brain power! Here is how solitude was viewed at the Menlo Park laboratory, as recounted by a journalist:

"Sometimes (Edison) hastily leaves the busy throng of workmen and for an hour or more is seen by no one.... In these moments he is rarely disturbed. If any important question of construction arises on which his advice is necessary the workmen wait. Sometimes they wait for hours in idleness, but at the laboratory such idleness is considered for more profitable than any interference with the inventor while he is in the throes of invention."
          ~Source: Edison, a Life of Invention

Edison realized that quiet hours spent reading, experimenting, or simply going through his past notebook entries dramatically increased his ability to spot interdependencies between ideas.

And here we get back to Jeanie Egmon's original prescription for complexity! Spotting interdependencies became a huge bonus of Edison's solitude time.

Egmon notes that to expand the schema, here are some things you can do in your solitude time:

• Reflect and question assumptions.
• Reflect and see if a concept you're working on fits into some bigger picture.
• Reflect and see if something is being over-engineered.
• Reflect and see if something is meeting a need, or is just an idea you're in love with.

So...get started now on building your schema! And watch how your ability to spot interdependencies will increase!

What You Can Do Starting Now

1. Undertake Multiple Projects Simultaneously: Work on multiple projects at the same time to activate your schema, and accelerate your ability to spot interdependencies. Make a list of your work-related and non-work related endeavors. Give yourself credit for all the things you're doing in your work life and family life as you think about your schema.
   
   
2. Develop Learning Goals: Put together one or two learning goals for the year that get your juices flowing. Be sure each goal has a rational and an emotional component. If you are a leader of others, be sure their goals are structured this way as well!
   
   
3. Maintain a Notebook: Go buy a lined or an unlined notebook...any type of pad that you believe you will actually take with you and use. As you get better at doing this, you may even "theme" or "title" your notebooks in specific ways. (Edison often themed his notebooks by industry or invention type.)
   
   
4. Spend Time in Solitude to Reflect: Carve out solitude time to not only write in your notebook, but to read it, mine it, draw in it, and reflect on the ideas you find. Watch new interdependencies appear! Use Post-it notes and colored markers to highlight key ideas or connections. I find this a great way to catch concepts that appear differently to me as I take new passes through my notebook.

In the next issue: - Innovation and Complexity: 3 Ways to Ramp Up More Effective Team Processes

Out of the Box

Freedoms Hinge on the Inner-Directed Employee: Why the Netflix
Culture Is “What’s Next”
Third in a four part Out-Of-The-Box series on Creativity

Digital entertainment represents one of the fastest-moving areas of innovation today. Consider all the innovations emerging from that world in the last three years alone. We've seen activity from YouTube, Hulu, Tivo, the Flip Video camera, Amazon.com, Apple, Netflix, and a host of others.

While I'm not an avid consumer of digital entertainment (although my children are), Netflix crosses my radar screen with great regularity. And much the way my admiration for Apple has grown over time, my admiration for Netflix continues to increase.

A publicly traded company since 2002, Netflix has seen its net income rise to $116 million in 2009, an increase of 40% over 2008. Netflix's stock price also climbed 116% in 2010. So clearly, something is going right.

Netflix, one of Fortune magazine's 100 fastest growing companies of 2010, has achieved extraordinary success by connecting its go-to-market strategy to a unique culture emphasizing employee freedom and responsibility. Like at Google, the Netflix culture seems to percolate across the entire firm - not just in select management layers. 

Culture of Freedom Means No Tracking of Vacation Days, And More
In the August edition of the futurethinktank newsletter I was intrigued by a headline stating that Netflix had abandoned any kind of tracking of its employees' vacation days. But after following the link to a Netflix slideshare presentation, I got a glimmer of why this is possible without having its financials run amok. Below is one slide taken from the deck which particularly caught my attention.

Netflix uses a term called "Talent Density" when talking about its workforce. By bringing in a higher-than-average dose of top performers, Netflix believes Talent Density is achieved. In its slideshare deck, Netflix specifically outlines 9 criteria it believes create that benchmark within each employee.

Three of these nine criteria - Communication, Passion, and Innovation - suggest that a big part of Netflix's success with its "culture of freedom" comes from hiring individuals who are "inner-directed." Importantly, a 40-year study called the Creatrix reveals that inner-directedness joins uniqueness (described in the May edition of Edison's Notebook) and ambiguity (described in the June edition), as a third driver of Creativity.

Inner-directedness exists when an individual sets personal goals and determines their own personal expectations of performance rather than solely relying on others to set goals and expectations for them. See if you can spot this quality in the three descriptions Netflix has established for employee performance criteria in the areas noted below:

Communication - "You listen well instead of reacting fast so you can better understand."

Passion- "You inspire others with your thirst for excellence."

Innovation- "You reconceptualize issues to discover practical solutions to hard problems."

These descriptors suggest that Netflix is relying heavily on the inner-directedness of its employees to sustain its culture of freedom. As stated by a senior Netflix employee, "Our model is to increase employee freedom as we grow rather than limit it, to continue to attract and grow innovative people, so we have a better chance of long-term continued success."

As Daniel Pink revealed in his best-selling book Drive, "autonomy" represents a huge motivator for us all. Netflix has tapped inner-directedness - a kind of autonomy - as a significant source of employee creativity as well as responsibility. This is a key reason why its culture hangs together in ways that would be impossible elsewhere.

Can Talent Density Outpace Business Complexity?
As shown in the slide above, Netflix believes that by maintaining Talent Density it can outrun business complexity. Only time will tell if this holds true.

But what is certain is that Netflix has established a culture which is highly adaptable in chaotic market conditions. As well, it demonstrates that the company is operating in a way which reflects learning as a "nearly autonomous" function, as business colleague Robert Hall - author of Compression - would describe.

No one is telling Netflix employees to learn specific things, or function in specific ways. Like Edison's laboratory employees, they are simply stepping up and operating with high degrees of freedom because they are inner-directed.

Its ability to stay flexible and cohesive while also handling tremendous marketplace complexity suggests the Netflix culture is "what's next!"

Events and Resources

The Edison Awards
Dedicated to America's Innovation Competitiveness in the 21st Century

This year, nominations for the 2011 Edison Awards will begin September 1st and run through early December. Click here for information on how to submit your nomination!

Nominations in 12 categories are welcomed for innovations developed by large or small organizations. Read more about how to nominate an innovation you feel is worthy of recognition using the Nominations tab at www.edisonawards.com.

Want to catch a glimpse of the 2010 Edison Awards winners? Watch this inspiring YouTube video with clips from this year's Edison Awards ceremony held in New York City in April.

You can also find the video on the home page at www.edisonawards.com. Don't miss your chance to watch 2010 Edison Achievement Award winner A.G. Lafley - former CEO and Chairman of Procter & Gamble - live on stage!

About Sarah Caldicott

Sarah Miller Caldicott is a great grandniece of Thomas Edison, a 25-year marketing veteran, and co-author of "Innovate Like Edison: The Five-Step System for Breakthrough Business Success." She has assembled teams of highly experienced consultants and trainers to assist her in bringing Edison's Five Competencies of Innovation™ to organizations of all sizes. Sarah and her teams are capable of addressing business challenges from a diverse array of industries, in either a business-to-consumer or business-to-business environment.

Sarah is a dynamic and award-winning speaker, whose engaging style combines substantive business content with humor. Her invaluable experience offers an ideal resource for organizations seeking innovation success in today's rapidly integrating global marketplace.

Born and raised in the Midwest, Sarah received a BA from Wellesley College, where she was named a Wellesley College Scholar. She also holds an MBA from the Amos Tuck School of Business at Dartmouth. Sarah resides in Oak Park, Illinois, and has two teenage boys, Nicholas and Connor. For additional information on Sarah, click here.

©2010 by Sarah Miller Caldicott. All Rights Reserved.