It must be tough to be a senior executive businessman/woman in a Canadian enterprise these days.  After toughing out the single-lightest recessionary period in the world between 2008 and 2012, in an economy that is chugging along at a tepid but “expected” rate for its horsepower, you have to endure the criticisms of economists, of all things.

Last week it was Don Drummond, formerly of some large Canadian bank, who called out these executives for not doing enough to get more productive especially when the opportunity presented itself.  What he meant was, “Why didn’t you spend on new equipment, processes, innovations, and so forth when your dollar was strong in foreign markets making those acquisitions cheaper than they’ve been in decades?”  Or, why are you being so cheap about getting better?

That kind of general diagnosis had to hurt, probably a lot like getting your waist measured by your doctor and being told that while 46″ is not sufficient to call you morbidly obese and win you entry to a popular evening reality show, you are FAT.  (Huh?  What?  Me?)

Before the excuses and rationalizations had died down, in steps another silly economist, the governor of the Bank of Canada, Mark Carney.  His suggestion:  get off the piles of cash you’re sitting on and invest some of it [probably best into innovations and productivity enhancing equipment].  In other words:  “You’re doing what we want our households to do while counting on those households to continue underwriting the Canadian economy.  Step up.”  Then he went on with some mumbo jumbo about returning the cash to the investors if you don’t know what to do with it.  Man, that had to sting.

In this case, it stung so bad that specific instances of this diagnosis being wrong were trotted out of the woodwork:  Magna invests (and so they do)…; Suncor is getting ready, so they’re building a warchest; and so on.  But, one could say, these are the exceptions that prove the rule.  Even if they’re not, cash hoarding statistics are clear.  The cash is out there in corporate treasurers’ hands DOING NOTHING.

Yeah, yeah… rainy day… things could go bad… concern…

But, as my wife is wont to say to me periodically, “The truth hurts.”

Invest in productivity and innovation.  That’s the growth and expansion that relieves the organization of having to cower over whether it will be OK through a small downturn.  Or, be insulted.

I had a thought about innovation and, after a quick Google search, think it’s fertile ground for a fascinating PhD thesis.  My hypothesis is that research would show a compelling correlation between a person’s “innovativeness” and his/her propensity for belief or faith.

I’m not just talking about spirituality, although that is certainly one expression of faith.  The faith that I’m referring to is the kind not necessarily involving God:  the firm belief in something for which there is no proof.

There is no argument that faith is insufficient for innovation.  Having faith that we can fly is no substitute for knowledge of aerodynamics.  So the real question is whether faith is necessary for innovation.  Logical, secular rationalism and reasoning are also insufficient to create the future.  While there should be no doubt about the implicit and essential necessity and value of reason to the conceiving, assessing, developing, and commercializing of innovations, just like with faith, reason is necessary but not sufficient for innovation.  I believe these corresponding deficiencies are complementary and together are sufficient.

It is in the need for proof that traditional reason and logic fall down in the service of innovation.  From the viability of an idea to quantifying untapped markets, innovation is very much an exploration:  a journey into the unknown.  Every bit the same as the voyages of Columbus and Magellan, commercial innovation starts with an idea based on what’s known or observable.  The idea must be then made real.  Sometimes, as for Columbus, the outcome is (serendipitous) proof of the proposition.  Other times—more often than not—the immediate outcome only proves that there is one less degree of freedom.  In any case, reason takes explorers and other discoverers and innovators a long way.  It doesn’t get them all the way.

Explorers and scientists take what they know and their reasoning about what they do not know, and they put it to the test.  There are relatively few other alternatives beyond experimenting.  Innovation could be conducted that way too.  But in the commercial world there is—today, anyway—a tendency to avoid experimental failure in favour of intellectual success. Where the pressure is to succeed, profit, and win apparently without the trouble of experimenting and proving the unknown, it’s important to secure false certainty in advance (i.e., market research).

This false god is proof before proving.

What is absolutely certain for (practical) scientists, explorers, and innovators:  at some point what is known ends and we are in terra incognita.  For explorers, the landmarks can no longer be recognized.  For scientists, action outcomes become evermore unpredictable from past experience.  For commercial innovators, it is not so clear because there is always some loose historical precedent, experience, or knowledge framework to cling to—rightly or wrongly.  Moreover, as the environment becomes more ambiguous, every inconsistency with theoretical “proofs” is magnified into an error of imprudence or commercial negligence, not mere experimental failure.  And the weak-kneed balk.

Where knowledge ends, interim results aligning to prediction (or not) often determine choices to continue (or not).  If the stakes are right (i.e., not the farm), these results ought to only inform the choice of path to pursue; not to stop.  Thomas Edison, arguably a role model of innovation, said, “Nearly every man who develops an idea works it up to the point where it looks impossible, and then he gets discouraged. That’s not the place to become discouraged.”  This perfectly captures how and why knowledge expands on a foundation of faith.

The argument is simple:  where no proof is available, faith is essential.  For some, it’s astrology.  For others faith may be in Magic 8-balls™, democracy, the justice system, algebra, or “the market.”  Optimism is, by its very nature, positive faith.  An innovator must have undying optimism that (s)he will get to a meaningful and valuable new place.  Because optimism is a fundamental form of faith, point made, full stop.  QED.

Optimism, however, covers a ridiculously broad swath of life.  One can be optimistic about everything, in which case it makes the point but may really mean not much.  Irrespective, it shows that we need to return to the notion of a propensity to believe and have faith in something—even if it’s just that “the sun’ll come out tomorrow…”— as being the element that completes and satisfies the fundamental requirement for innovativeness.

The hagiographies of Steve Jobs, patron saint of innovation, make much of his having been influenced by early trips to an ashram, Buddhism in general, and peculiar dietary choices.  These are vestiges of a personality imbued of faith, as is the so-called “reality distortion field” that he put up to make his worldview real.  Wilfulness is in effect a projection of faith in his own vision—a faith so strong that it blotted out all other views of ordinary reality.  He is not alone in this personality trait, only the most notorious, successful, and lionized.  Again, none of this is at all to diminish the intellectual brilliance and power of reason Jobs had to have if only to ground his visions in practical reality.

Among others, historically, that have shown an abiding faith in things spiritual and not—even those that one would consider decidedly secular—are a pantheon of world changing innovators of one sort or another.  Consider:

• Galileo Gallilei, famous for being excommunicated by the Pope and subsequently recanting, obviously had some faith in God and the Church.  But more important, in maintaining e pur si muove (“And yet it moves.”), he displayed an abiding faith in his own observations and scientific inferences.
• Adam Smith, Rene Descartes, Isaac Newton, and other Enlightenment and post-Enlightenment philosophers successfully proposed and propagated secular theories and advances to science as devout Christians.
• Most of the Robber Barons of the glory days of 19^th-century US capitalism were devout church goers.  The Wright brothers believed in flight and kept trying failure after failure.  The Founding Fathers of the Republic, not least among whom were Jefferson and Franklin, had faith in science and in God—and they innovated a society.
• Einstein was an atheist, but he had such a strong faith in his theories and what would be quantum theory that he changed physics.

In all of these examples we see clear evidence that the science and method—the logic and reason—were critical BUT the characteristic of faithfulness was essential.  It may not even matter what one has faith in.  What we don’t know is how many others had the reason but not the faith and came up short.

So what?

At another time, in another essay (or dissertation), perhaps I—or someone else—could expand on the uses of such an awareness on innovation strategy and policy, on portfolio approaches, and on decision-making viz. innovation in progress.  Further afield, it might be interesting to consider the HR implications as organizations search for talented leaders (“So, we want a CEO who will be innovative… Tell me about your belief system.”) and so on.

Another time.

This just in from the OECD, what should have been obvious to anyone paying attention since about 1983:  OECD calls time on trickle down theory (from the Globe & Mail).  The OECD woke up and realized that widening income disparities might actually put the lie to the theory that a “rising tide raises all boats” at least as far as economics goes.  Should take only about 2 more generations for the political applications of this theory to finally be bankrupt as well.

We are less than 2 months away from the next installment of Lake Superior State University’s (narrowly) famous annual list of banished words. These are the words and phrases that have been so overused as to have, first, lost all meaning and, second,  become noxious.

My contribution for the January 2012 list is “brand permission.”  Despite my reasoning as follows, I first want to doff my hat at the guy who coined the term and hope he or she is making a royalty from its use. Still, draw and quarter the phrase and bury the parts in different places.

The phrase “brand permission” is a kitschy bit of shorthand for “Will our customer’s accept such an offering/communication/position from this business/organization?” This is not a novel rumination among business people; it’s common sense that’s merely been given a sound-bite. My issue is that it has been overworked as though it we’re on an overlooked scrap of lambskin found in a jar near the Dead Sea. Really, can’t we not speak in tongues?  The question is:  “Will we be able to sell this to anybody who knows our business?”  And it applies only to extension products.

Does a mortuary really need to question “brand permission” to know that becoming a full-service funeral home or installing an incinerator for cremation services would make sense, while adding a terminal patient palliative care ward next door might make efficiency sense but probably would horrify the marketplace? Does a dolt of an action hero (or bimbo–to be fair) really need to be told that they’re kind of typecast and wouldn’t be credible in a sensitive dad or bookish librarian Mensa member roles?  (OK, they probably shouldn’t need it but apparently the lesson here is less powerful than ego.) It’s not magic.

More than that, by becoming an incantation it leads to abusive overkill and caution.  The outcome here, from the “brand non-permission” cravenness, is that innovation and expansion narrows to conservative irrelevance.  The entire concept smacks of stasis. In the hands of an unnuanced mind, it will be inhibit change and development because there is no permission to move beyond what is.  Logically, you can not have permission to do what the authority (in this case the faceless “market”) does not know.  (My child neither has nor does not have permission to be a star high-school musician travelling around the world giving concerts: I–the faceless authority–haven’t contemplated that seriously as yet.)

In the extreme case, as a lumbering company Nokia probably didn’t have brand permission to become a cellular handset leader. And only in the wispy memory of what has already become do we readily see and say that Apple had “brand permission” to jump into consumer electronics, the music business, and even the tablet computing space. Let’s recall, at the time of the first ipod, Apple was a near-death, small share maker of personal computers, AND it had failed miserably with its first foray into portable computing.  (Can anyone say “Newton?”) It’s claim was that it’s computing equipment focused on design and shifted that category from beige boxes. Did it really have “brand permission” to make a portable music player? –to upend the entire music business?  Really?  Be honest?

“Brand permission” is, like so much other business-speak, a way to contribute risk measurement and caution.  It also has the value of forcing one to think about “sticking to your knitting” or “staying focused.” It also generates rationale gymnastics to prove that an idea does, in fact, have permission.  That’s a natural second order effect.

For at least these reasons, and for so many more–and because the phrase is getting nauseating:  LSSU, please banish it.