VIDEO: Maturity Model Strategy, Ep 2: Building Capacity

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Transcript:

Maturity Model Ep2 Take 2

Hi again, I’m Scott Hutcheson of the Strategic Web. This is the second video in a series on adoption or maturity models. Check the link in the description to watch the first one if you missed it. So, to review, an adoption or maturity model describes the stages and organization goes through when learning in adding some new activity or practice.

The one I use has five stages. Ignore, investigate, incorporate, integrate, and innate.

Today, I’m going to spend most of the time reviewing the second stage: investigate. Specifically, we’ll be looking at the concept of capacity and how building capacity is essential to progress successfully from the stage two of adoption to a stage three or how not building capacity can make your new initiative just die on the vine. And that’s because there’s a strong temptation to just rush from not doing something to trying to operationalize it immediately, but this disregards the maturity process and more importantly, ignores this need for building capacity.

So what is capacity? First, this doesn’t refer to the number of hours in a day or personnel available for work. I’m talking about absorptive capacity, which actually involves how our organization can increase their members’ ability to absorb and utilize new knowledge.

The concept is presented in a research study called Absorptive Capacity. A New Perspective On Learning and Innovation conducted back in 1990. And yes, research studies can be a bit dry. Just bear with me a bit, because this is essential information. So let’s start with a quote from that study that offers this idea in a bit more formal language.

The ability to exploit external knowledge is thus a critical component of innovative capabilities. We argue that the ability to evaluate and utilize outside knowledge is largely a function of the level of prior related knowledge. Thus prior related knowledge confers an ability to recognize the value of new information, assimilate it and apply it to commercial ends. These abilities collectively constitute what we call a firm’s absorptive capacity.

bsorptive Capacity: A New Perspective on Learning and Innovation (1990)
Wesley M. Cohen, Carnegie Mellon University
Daniel A. Levinthal, University of Pennsylvania

It just rolls off the tongue, doesn’t it? Anyway, in short, what they’re saying is that the ability to retain new knowledge is closely related to how much knowledge about a subject you already have. Simply put, it’s easier to learn more about something you already know something about than to learn something completely new. In their conclusion, they state.

Absorptive capacity is more likely to be developed and maintained as a by-product of routine activity when the knowledge domain that the firm wishes to exploit is closely related to its current knowledge base.

When, however, a firm wishes to acquire and use knowledge that is unrelated to its ongoing activity, then the firm must dedicate effort exclusively to creating absorptive capacity. i.e absorptive capacity is not a by-product.

bsorptive Capacity: A New Perspective on Learning and Innovation (1990)
Wesley M. Cohen, Carnegie Mellon University
Daniel A. Levinthal, University of Pennsylvania

In other words, if you want your organization to learn a new skill, you can’t just focus on acquiring new knowledge. You must also purposely focus on increasing your very capacity to hold onto that knowledge in the first place.

They continue.

Even if it does, due to the intangible nature of absorptive capacity, a firm may be reluctant to sacrifice current output as well as gains from specialization to permit its technical personnel to acquire the requisite breadth of knowledge that would permit absorption of knowledge from new domains.

bsorptive Capacity: A New Perspective on Learning and Innovation (1990)
Wesley M. Cohen, Carnegie Mellon University
Daniel A. Levinthal, University of Pennsylvania

Okay. That’s the last of the academic stuff. To sum up:

They found that organizations often ignore this essential need of increasing capacity because it’s abstract and it doesn’t seem connected directly to generating revenue. But without increased capacity members learning vessels won’t have room for new knowledge. Our minds get filled up quickly and just overflow with the new information. Without enough capacity we don’t have anywhere to put it.

All right. So if capacity is abstract, let’s see if we can understand it more practically. Let’s move through a couple of analogies.

This idea of capacity is kind of like training to run a marathon. If you’ve never done any distance running before you won’t get very far at the beginning of your training. Just two or three miles will seem like a slog and you’ll be a long way off from being able to complete a 26.2 mile race. However, as you train, you increase both your body’s and your mind’s capacities to run longer distances.

You have to follow the process of training to learn these things. There are no shortcuts. You can’t Matrix yourself into being a marathon runner.

Here’s another example.

A long time ago I was a professional dance instructor. Yeah. I know another life. My instruction partner. And I found that merely teaching dance steps didn’t actually help people learn very well. So we switched to making their initial lessons focused on what it feels like to be connected to a partner before we ever taught any steps. While he didn’t know it at the time, what we were really doing was increasing our students’ capacities to learn how to dance in the first place. We needed them to get comfortable with just the sensation of moving around the floor with another person. This increased their comfort and capacity and allow them to learn steps and techniques much more quickly.

This is why the second stage of an adoption model, that investigate stage, is so essential to increasing capacity. This is a stage where people get to experiment and try things out. Failure isn’t bad at this stage. In fact, it’s required. Getting something wrong and adjusting is one of the best ways to increase your capacity to learn something. If you don’t fail small, you’re just putting it off until you fail big.

And here’s one last example and it also involves me. Creating these videos is still pretty new to me. So I find myself increasing capacity as I investigate how best to make them. Case in point, I actually completed and even edited an entire video on this subject prior to making this one that it was a. Boring. And even if you think this one is boring, trust me, the other one was worse.

So I scrapped it and I started over. Yeah, that’s inefficient and messy, but had I just powered through and said, “no, that’s probably fine,” I wouldn’t have given myself the freedom to fail or increase my capacity and you’d be annoyed by an even more boring video. This American life host, IRA glass has a well-known quote about skill and tastes that connects pretty well to this concept of capacity.

Here’s a high points version of that quote.

All All of us who do creative work, like, you know, we get into it, and we get into it because we have good taste. But it’s like there’s a gap. That for the first couple years that you’re making stuff, what you’re making isn’t so good, okay?

But your taste, the thing that got you into the game, your, your taste is still killer. And your taste is good enough that you can tell that what you’re making is kind of a disappointment to you.

The thing I would say to you is, everybody goes through that, and for you to go through it, if you’re going through it right now, if you’re just getting out of that phase, you gotta know it’s totally normal, and the most important possible thing you could do is do a lot of work.

Do a huge volume of work. Because it’s only by actually going through a volume of work, That you’re actually going to catch up and close that gap.

And you just have to fight your way through that.

That “do a lot of work” that he’s talking about is likely to be in this second stage of experimenting and trial and error. You’re increasing your abilities to utilize new knowledge and your capacity. Look, the investigation stage is going to be inefficient. This is what the researchers meant when they said “… a firm may be reluctant to sacrifice current outputs, as well as gains from specialization.

It’s going to feel slow. You’ll probably want to rush the change, but slow is smooth and smooth is fast.

Here’s an example of how it can work successfully. The Entrepreneurial Operating System or EOS is a management approach used by more than a quarter million businesses. I’ve worked at a business that implemented EOS and found its approach pretty well fits a healthy adoption model progression. , generally the shift to EOS methods begin with a small team, usually principal leadership, and they usually have an implementer to guide them and encourage them to take risks and embrace the mess of the process.

It might even feel forced or unnatural for the first year or so. In fact, if it doesn’t, the team may not be pushing themselves hard enough, not experimenting with it enough. And this initial work increases their ability to even learn the EOS methods. So while they don’t use the term capacity building, that’s definitely what’s going on. Once they both learn the methods and increase their capacity to learn them, they’ll be ready to introduce us to other teams in the organization. And they should be ready to give them the freedom to increase their own capacities, to adopt EOS.

I hope this helps reveal the value and essential nature of capacity building during the investigation stage. I’ve actually decided to expand this dive into maturity and adoption models into a three-part series. In the next video I’ll be exploring how consumers adopt new products. We’ll be looking specifically at virtual reality and augmented reality as examples of this. So you in the next one.

Overview

The Strategic Web is an independent consultancy focused on innovation strategy. I help businesses and organizations develop strategies to differentiate themselves in the marketplace and progress out of static practices.

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Scott Hutcheson
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scott@thestrategicweb.com