Work, Organizations, and Markets Seminar presentation by Johnathan Cromwell (Harvard Business School).

Abstract: How do organizations continue innovating as the problems they face continue getting more complex?  Theory suggests that knowledge recombination is the most effective mechanism for innovation, and that collaborating with new partners and more diverse experts is the best way to increase the potential for novel combinations of information.  However, we find that knowledge recombination between experts becomes limited as problems get more complex, and non-experts can help experts be more innovative.  We find that groups in which both experts and non-experts create and implement solutions are rated as more innovative than groups in which only experts develop a solution.  While existing theory suggests that non-experts help groups facilitate the communication and coordination of knowledge between experts, we find that non-experts can play a more important role.  When experts and non-experts collaborate, they can engage in a process we call bounded exploration.  During this process, non-experts help groups radically explore ideas that may be beyond the scope of experts’ attention, and experts identify the boundaries to evaluate which ideas are actually feasible. We also find that performance pressure is an important, but overlooked condition that affects a group’s ability to produce innovation.  When there is low pressure, we find the expected relationship that working with new partners produces more innovative solutions than working with familiar partners.  But when groups are working under high pressure, working with new partners leads to significantly less innovative solutions and working with highly familiar partners leads to more innovative solutions than working with new partners. 

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