Enterprises - Is too much experience a good thing?

In a recent blog post, Innovation in the Enterprise, my friend Sumeet Moghe raised the question, "Is too much experience a good thing?" He speculates that "...increasing experience in a company eventually stifle[s] innovation".

I agree the observation is valid; established enterprises are generally less innovative, relatively speaking, than start-ups. But is the general experience level of the employees to blame or is it a more complex question of the overall structure and culture of the enterprise?

Inertia, the preference to not change, is a powerful driving force in people. If there are 14 reasons to do something and 1 reason not to do it, it generally won't get done. This is partly explained by a principle that Robert Cialdini talks about in his "Influence" book -- people are conditioned in early childhood to be wary of taking risks. They learn this from burning their hands, hitting their heads on or falling from tables, etc. So later in life, they are afraid to do something new, even if there is no risk involved.

The desire to reduce complexity is another factor that drives people to inertia. Faced with too many choices, or choices where the outcomes are difficult to evaluate, people tend to make no choice and stick with the status quo or default option. (You can read more about this in Nudge by Thaler and Sunstein.)

But there are many examples especially from music and art, that demonstrate that experience can deepen creativity. Consider the later symphonies by Mozart, Beethoven's late period string quartets, or the late works of Picasso, including that iconic sculpture in Chicago. On the other hand, certain studies indicate that some categories of creative thought, science and poetry for example, tend to peak early in life. Why?

A Wall Street Journal article "Fleeting youth, Fading Creativity" takes a look at the field of academic science and, while citing many examples of young scientists who made breakthrough contributions, it also questions whether the structure of that industry discourages creativity in older scientists.

That raises a related question. Does the industry tend toward those structures because older scientists have lost their creativity or does the industry structure drive the creativity out of scientists?

But we are losing focus here. Sumeet's original question was about the nature of the enterprise. What causes an enterprise as a whole, as the sum of its people, to become less innovative over time? Even if the current staff is skewed toward younger people, as a company grows and acquires recognition, it tends to become less innovative.

Another friend would attribute this to the "monkey-butt" theory. As a monkey climbs higher in the tree, its butt gets more exposed and he feels the need to cover it. As a company grows, it establishes layers and divisions of management to handle operations and external relationships. The layers and divisions process ideas up to a board or similar small body of decision-makers. Each layer or division is another monkey in the tree looking to avoid the embarassment of a bad move.

Yet, in the field of applied science (consumer products) there are examples of enterprises that consistently innovated for long periods of their existence, usually driven by one or a few influential leaders who deliberately set up an innovating culture. One of these is 3M which for a long time had a "15 Percent Rule"; an employee was allowed to spend up to 15% of their paid time on independent projects of their own choosing. And another famous example is Xerox Parc.

(Click here for a long video about creativity factors at Xerox Parc.)

But those firms are outliers. Most organizations, it seems to me, reach such a size and position in their market that their primary objective becomes "defend the status quo".

They have passed the start-up phase thanks to their "guaranteed product or process or method for success." Their brand grows and most operational resources get devoted to selling the "guaranteed product or process or method." This compells them to seek out and train employees who are excited to be associated with the "guaranteed product or process or method." A culture evolves that believes in and defends this one sure thing. Innovation loses momentum.

A company can't break out of this dependency on the status quo unless it is willing to set up and fund independent internal ventures as 3M did. In effect, the enterprise must be willing to recognize and fund its own competition from within.