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On Creative Construction

You may have heard of the term ‘creative destruction.’ Coined by Joseph Schumpeter (1883-1950), it was meant to signify what Schumpeter saw as the dynamic interplay between economic progress and competition inherent in that progress. School leaders are reading about (or seeing) a relentless influx of new enterprises (organisations of all types) that are proposing new and innovative ways of doing things. These new ways of doing things result in challenging existing organisations with unanticipated business models, sometimes using new technologies. Of course, we mustn’t forget the other layer of organisation as well: existing organisations that challenge each other. The ‘relentless influx’ into an incumbent organisation’s space, then, is arguably omnidirectional in nature, rather than just from new entrants.

What fascinates me is the notion of existing organisations who commit to research and development, resulting in the creation of new value for stakeholders. Equally fascinating to me are the existing organisations who either choose to bury their heads in the sand, thinking that the relentless influx is merely a fad, or choose *not* to invest in research and development on account of the ‘time-honoured values’ (or whatever variant of that expression you’d prefer) of the organisation, setting themselves up for someone to come along and push them aside.

Existing organisations (schools, in our case) can be just as effective, and perhaps more so, than those new entrants, provided that they are designed and led in the right way(s). There is an unfortunate, not-grounded-in-evidence belief that small organisations are automatically good at innovation, whilst big organisations are inherently bad at it. Both organisational types have the requisite DNA for innovation. They just need to manipulate it in the right way. Leaders should know by now that everything is changing: indeed, no responsible leadership team can ever be satisfied with the status quo, says Gary Pisano, the Senior Associate Dean of Faculty Development at the Harvard Business School. Pisano suggests that organisations large or small can be effective in R&D/innovation by doing three things:

(1) systematically creating an innovation strategy

(2) designing an innovation system

(3) building an innovation culture.

The order is not random; each items lays the foundation for the next. A school that says “let’s get really good at innovation” is missing the fundamentals. What type of innovation? Will you use your current business model? Will you use your existing capabilities (staff)? Will you venture into a new market segment or geography? When a school doesn’t have a systematic innovation strategy first and foremost, failure to innovate with regularity will result. All failure is not good. This kind of failure can be avoided by aligning philosophically to a strategy, before moving forward. Why is this? Let’s be honest: it takes real creativity to build something new within/out of an existing structure. This is what Pisano calls “creative construction,” akin to ‘renovating your house while you’re living in it.’ Leaders need to balance the line of taking advantage of existing resources (people, finance, etc.) without being constrained by them.

In the end, the systematic innovation strategy referenced above is all about how innovation will create value, and how the organisation (school) will capture that value. Will it be enhanced enrolment, and therefore revenue? Will it be enhanced market share, as well? The strategy, whatever it is, needs to be simple.

Simplicity is a key principle of innovation. How simple is your innovation strategy?

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