Popularity Contests: Why a Company Embraces One Innovative Idea but Shuns Another
Awesome quote, “You’re more likely to act on opportunities that confirm what you’re doing rather than opportunities that challenge what you’re doing.”
Introduction (Via Wharton)
It’s hard to imagine that any of the world’s top multinational corporations (MNCs) have something in common with the angst-ridden, clique-driven drama of a high school cafeteria. But like the adolescent years we all remember, a multinational gets just as caught up with popularity contests and in-crowds as teenagers, especially when it comes to sharing ideas and best practices within their own organizations.
MNCs often have built up a rich store of knowledge over the years in ways that smaller companies can only dream of. MNCs use their vast global reach to tap different markets quickly and exploit their on-the-ground knowledge to sniff out new ideas or products being used at rival companies in other parts of the world. “The advantage of being a multinational is exactly this knowledge access on a global basis,” says Felipe Monteiro, a Wharton professor of management whose recent research looks at how and why new knowledge spreads within firms. “What is equally interesting is the gap between the potential for that [access] and the actual use of such global knowledge.”
At the heart of the issue is how an MNC manages to close that gap. And a lot of that hinges on behavior and cognitive factors. “If we look carefully at the patterns of knowledge flows, you see that not [all parts of a company are] participating in it and it’s not every kind of idea that gets acted upon,” says Monteiro. In other words, a company’s success is ultimately less about the availability of innovative ideas and more about the human beings who need to share them.
Most Important Excerpt (Via Wharton)
A critical hurdle to getting the initial buy-in for an idea from business unit managers is “dissonant knowledge” — knowledge that challenges a recipient unit’s dominant logic. “The idea of [studying] knowledge dissonance is to try to separate the technical aspect — can you understand it? — from a more cognitive aspect — do you agree with it?” Monteiro says. “You’re more likely to act on opportunities that confirm what you’re doing rather than opportunities that challenge what you’re doing.”
