The Organisational Cycle: The Age of Reasoning (Part 3)

Continued from Part 2

Published in August 2015 issue of Sraddha, Vol. 7 (1), pp. 134-157.

CREATIVE DESTRUCTION

Why does the individual pioneer face roadblocks such as resistance, suppression and discouragement? We find an answer to this in Sri Aurobindo’s words: “The champions of the old order may be right when they seek to suppress him [the reasoning individual] as a destructive agency…because to destroy is his mission, to destroy falsehood and lay bare a new foundation of truth.”[i] This “temporary reign of the critical reason largely destructive in its action is an imperative need for human progress.”[ii] We find several examples of this in historical and present times.

Suppression of novel ideas under conventional stage has been prevalent for centuries. Nicolaus Copernicus, a Renaissance mathematician and astronomer formulated a model of the universe that placed the Sun rather than the Earth at its center (also known as Heliocentric astronomical model). Around 1514, Copernicus asked his friends to review a forty-page manuscript describing his ideas about the heliocentric hypothesis.” Ignoring the advice of his closest friends, he did not openly publish his views, not wishing—as he confessed—to risk the scorn “to which he would expose himself on account of the novelty and incomprehensibility of his theses.”

Almost a century later Galileo published Sidereus Nuncius (Starry Messenger), based upon the observations he had made with his invention, telescope, the phases of Venus and the Galilean moons of Jupiter. With these observations he promoted the heliocentric theory of Copernicus. Galileo’s discoveries were met with opposition within the Catholic Church, and in 1616 the Inquisition (a group of institutions within the judicial system of the Roman Catholic Church whose aim was to combat opinion or doctrine at variance with the orthodox or accepted doctrine) declared heliocentrism to be formally heretical. Heliocentric books were banned and Galileo was ordered to refrain from holding, teaching or defending heliocentric ideas. He was sentenced to indefinite imprisonment and was kept under house arrest until his death in 1642.[iii]

In the present times, Robert Goddard is hailed for his research and experimentation with liquid-fueled rockets. Although his work in the field was revolutionary, Goddard received very little public support for his research and development work. The press sometimes ridiculed his theories of spaceflight (for example, The New York Times once reported that Goddard seemed to lack a high school student’s basic understanding of rocketry). As a result, he became protective of his privacy and his work. Years after his death, at the dawn of the Space Age, he came to be recognized as the founding father of modern rocketry.

“For a work to be truly creative, it has to depart from the status quo at some point. That departure makes many people uncomfortable. Despite our oft-stated desire for more creativity, we also hold a stronger desire for certainty and structure. When that certainty is challenged, a bias against creativity develops.”[iv] This departure from the status quo results in creative destruction also known as “Schumpeter’s gale” (generations of economists have also adopted it as a shorthand description of the free market’s messy way of delivering progress[v]), a term in economics, which has since the 1950s become most readily identified with the Austrian American economist Joseph Schumpeter’s theory of economic innovation. In the book Capitalism, Socialism and Democracy, Schumpeter introduced the term “creative destruction,” which he explicitly derived from Marxist thought and used it to describe the disruptive process of transformation that accompanies innovation:

“Capitalism…is by nature a form or method of economic change and never can be stationary. … The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates. … The opening up of new markets, foreign or domestic, and the organizational development from the craft shop and factory…illustrate the same process of industrial mutation… that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. It is what capitalism consists in and what every capitalist concern has got to live in.”[vi]

Companies that once revolutionized and dominated new industries – for example, Xerox in copiers or Polaroid in instant photography – have seen their profits fall and their dominance vanish as rivals launched improved designs or cut manufacturing costs. In the case of audio technology, the cassette tape replaced the 8-track, only to be replaced in turn by the compact disc, which was undercut by MP3 players, which will in turn eventually be replaced by newer technologies.

Another frequently cited example of creative destruction is the smartphone, which all but killed the market for not only regular cell phones but also PDAs, MP3 players, point-and-shoot cameras, wrist watches, calculators and voice recorders, among other things.[vii] Very soon Apple Watch will be unveiled, which shall have all the features of a smartphone on a watch and much more. All these examples demonstrate that today’s novel-ness shall very soon become a convention and eventually fade out to be replaced by some other path breaking innovation that shall again become a convention and this cycle would continue.

INNOVATION AND REASONING

Innovation is the key result of age of reasoning, which results in creative destruction. The term innovation implies an original and a more effective idea which “breaks into” the market or society.[viii] We as customers see the end-product of the innovation, but behind the innovation lies a paradigm shift in the way that organization thinks and motivates its employees. Innovation is not possible in a conventional regime because it discourages searching, testing, verifying, inquiry and discovery. Innovation is the direct result of an age of individualism.

Most innovations are led by what Sri Aurobindo refers to as the eagerness to “search for the first principles and rational laws, its delighted intellectual scrutiny of the facts of life by the force of direct observation and individual reasoning.” Another important force behind an innovation is the individual’s urge to discover “large practicality and his sense for the ordering of life in harmony with a robust utility and the just principles of things.”[ix] Last but not the least, is the pursuance of these tendencies seriously, with great enthusiasm and passion.

Percy Spencer, one of the world’s leading experts in radar tube design, was working at Raytheon (American defense contractor) as the head of the power tube division to develop and produce combat radar equipment for M.I.T.’s Radiation Laboratory.  It was US military’s second highest priority project during WWII, after the Manhattan Project.

One day, while Spencer was working on building magnetrons for radar sets, he was standing in front of active radar set when he noticed that the candy bar he had in his pocket had melted.  He and some other colleagues then began trying to heat other food objects to see if a similar heating effect could be observed.  The first one they heated intentionally was popcorn kernels, which became the world’s first microwaved popcorn.

Spencer then created what we might call the first true microwave oven by attaching a high density electromagnetic field generator to an enclosed metal box. The magnetron would then shoot into the metal box, so that the electromagnetic waves would have no way to escape, which would allow for more controlled and safe experimentation.  He then placed various food items in the box and monitored their temperature to observe the effect.

The first commercially produced microwave oven was about 6 feet tall and weighed around 750 pounds.  The price tag on these units was about $5000 a piece.  It wasn’t until 1967 that the first microwave oven that was both relatively affordable ($495) and reasonably sized (counter-top model) became available.[x]

Though Spencer wasn’t the first to notice something like this with radars, he was the first to conduct detailed investigation. At that time these ovens were not practical at household level, it was only a decade later that more households, in the developed countries, had these ovens compared to dishwashers.[xi] Now perhaps all modern households in India have microwave ovens. The popularization of microwave oven happened as a result of practical utilization of this invention, combined with an effective and organised marketing strategy.

A similar story is seen in the case of the widely used Post-it Notes. Dr. Spencer Silver, a scientist at 3M, was attempting to develop a super-strong adhesive. Instead he accidentally created a low-tack, reusable, pressure-sensitive adhesive. For five years, Silver promoted his “solution without a problem” within 3M, both informally and through seminars but failed to gain acceptance. In 1974 a colleague, Art Fry, who had attended one of his seminars came up with the idea of using the adhesive to anchor his bookmark in his hymn-book. The original notes’ yellow color was chosen by accident, as the lab next-door to the Post-it team had only yellow scrap paper to use. Thus was born the Post-it.

3M launched the product as “Press ’n Peel” in stores in four cities in 1977, but the results were disappointing. A year later, 3M issued free samples directly to consumers in Boise, Idaho, with 94 percent of those who tried them indicating they would buy the product. On April 6, 1980, Press ’n Peel was re-introduced in the US stores as “Post-It Notes.” The following year they were launched in Canada and Europe. The patent expired in 2003, after which it gained further popularity throughout the world.[xii]

As these examples clearly illustrate, the success in the marketplace is driven largely by the pursuance of the novel idea, its practical utility, and the serious pursuance of the twin goals with great enthusiasm and passion. In all the companies shortlisted in the book, Good to Great we find these common tendencies – critical observation, analysis, followed by individual reasoning to develop core principles and organizing them for their application.

[i]Sri Aurobindo, CWSA, Volume 25, p. 17.

[ii]Sri Aurobindo, p. 27.

[iii]http://en.wikipedia.org/wiki/Galileo_affair

[iv]http://www.creativehuddle.co.uk/why-great-ideas-get-rejected/

[v]http://www.econlib.org/library/Enc/CreativeDestruction.html

[vi]Schumpeter, Joseph A. 1994. [1942]. Capitalism, Socialism and Democracy. London: Routledge. pp. 82–83.

[vii]http://whatis.techtarget.com/definition/creative-destruction

[viii]Frankelius, P. 2009. Questioning two myths in innovation literature, Journal of High Technology Management Research, Vol. 20, No. 1, pp. 40–51.

[ix]Sri Aurobindo, CWSA, Volume 25, p. 19.

[x]http://www.todayifoundout.com/index.php/2011/08/the-microwave-oven-was-invented-by-accident-by-a-man-who-was-orphaned-and-never-finished-grammar-school/

[xi]https://www.timetoast.com/timelines/110412

[xii]http://en.wikipedia.org/wiki/Post-it_note

To be continued….

Read Part 1 and Part 2