A year and a half ago I ventured down to the charming city of Providence to check out an ideas conference being hosted by Rhode Island’s “Business Innovation Factory.” It turned out to be an outstanding event, attended by many bright minds with numerous inspiring stories from a wide range of fields. (I returned last year too.) Beyond all of the ideas, however, the main takeaway was just how advantageous being small actually is for tiny Rhode Island when it comes to actually capitalizing on innovation. And they know it! For this installment of the eclectic curiosity interview series, I chat with Saul Kaplan, the “Chief Catalyst” leading the BIF charge.

Saul Kaplan is the Executive Director of the Rhode Island Economic Development Corporation. He serves as the Executive Counselor to the Governor on Economic Growth and Community Development and serves on the Board of Directors for the Quonset Development Corporation, the Slater Technology Fund, Family Services of Rhode Island, and for The Big Picture Company. Kaplan created and leads Rhode Island’s unique Innovation @ Scale economic development strategy aimed at increasing the state’s capacity to grow and support an innovation economy, including an effort to turn the state’s compact geography and close-knit public and private networks into a competitive advantage. Kaplan was appointed by Governor Carcieri to the Rhode Island Science and Technology Advisory Council.

Where does Rhode Island rank in terms of business innovation? And in which areas is it particularly strong?

We have made innovation central to our state’s economic future. We are the smaller more manageable place where it is easier to get ideas from the white board on to a real world test bed. If new ideas work here in Rhode Island they will be better positioned to launch nationally and globally. We are positioning the state as a national innovation hot spot. Rhode Island has significant momentum in several innovation economy sectors such as health and life sciences, information technology and digital media, and defense/marine technology. Rhode Islanders are also natural entrepreneurs – we are two times more likely to start a business than the New England regional average. We’ve got a unique ecosystem, one in which the state’s compact geography and “tight knit” social networks enable collaborators to more easily explore and test new business models.

What’s a specific example of a situation where RI’s compact size and tight networks have provided an advantage that wouldn’t typically happen in larger states?

In 2006, Rhode Island concluded a ground-breaking port security demonstration project that brought public and private sector partners together to build a communications network for real-time, cross-agency monitoring of vessel traffic in Narragansett Bay. Because of Rhode Island’s well-networked community of defense experts, this project was executed quickly and at less cost than would have been possible in other areas of the country. Other ongoing initiatives taking advantage of Rhode Island’s unique ecosystem include electronic medical records, personalized medicine, intelligent transportation, and a statewide research alliance. We are particularly excited about the BIF Nursing Home of the Future project that we have just launched to completely rethink how value is delivered to our elderly population.

You’ve said that you believe that success in Rhode Island is hinged on the community’s ability to experiment with new business models. What exactly do you mean by that? What kind of models?

It’s not just Rhode Island’s success that hinges on an ability to experiment with new business models. Our entire nation must now compete in an increasingly complex, global economy where innovation and knowledge are the primary drivers of growth. Innovation is about a better way to deliver value. It is not technology that is getting in the way of progress in the areas that matter most: health care, public safety, education, and quality of life. These are all systems problems and we do not have a road map for systems level experimentation and change. We have more technology then we know how to use and absorb today. It is humans that are getting in the way. Humans and the organizations we live in are stubbornly resistant to change and do not know how to work and play nicely together across boundaries. We need safe environments to experiment with new business models particularly networked business models that cut across organizations, industries, and the public and private sector. My new mantra is about R&D for new business models. All organization leaders need to constantly explore and experiment with new business models the same way they test new products and technologies today.

Rhode Island has a unique opportunity to be an innovation hot spot by turning its small size into a competitive advantage. For organizations interested in developing new business models – specifically models that require the networking of capabilities across industries and disciplines – Rhode Island’s place power presents a unique opportunity for value creation. We can more easily develop an integrated understanding of an entire system and also provide an independent, neutral platform for experimenting with new systems.

We created the non-profit Business Innovation Factory to deliver on this proposition and BIF’s experience lab currently has projects underway targeting new business models in healthcare, education and public safety.

What are the biggest challenges and opportunities that come from spanning the worlds of politics, business, academia, and the arts?

An active BIF community member once suggested that our t-shirts should proclaim “BIF The Anti Silo”. I believe that the best value-creating opportunities will be found in the gray areas between disciplines, functions, and sectors. We have to learn how to create new system level solutions with an interdisciplinary approach that enables transdisciplinary solutions. New business models will arise from bringing the unusual suspects together and learning how to connect new capabilities in purposeful ways. All of this is easier to say then to do. Most of us are busy pedaling the bicycle of our current business models and we spend too much time interacting with only the usual suspects who shop the same old solutions and capability sets. Our mission at the Business Innovation Factory is to enable collaborative innovation. We are creating a community of innovators who are interested in exploring and testing new business models. We are trying to make R&D for new business models easier to do while still pedaling today’s business models.

What skills/training/experience do you personally rely on most to span such silos and to foster collaboration?

Very thick skin, a strong belief that there is always a better way, the ability to thrive with ambiguity, actually enjoying steep learning curves, and did I say very thick skin. Everyone loves innovation until it impacts them. I used to think that we could enable large-scale change and create more innovators by proselytizing. Innovation rhetoric is everywhere and yet we still don’t seem to be progressing beyond the buzzwords. I now believe in sorting the world to identify the innovators across every imaginable discipline and silo and then finding ways to connect them in purposeful ways. I think we will make more progress that way. That is what BIF is all about.

From your experience visiting and consulting many different types of organizations, what are the most common mistakes made in how they organize and structure themselves? How can organizations be more innovative?

There is a lot written and many consultants who work in this space. I will mention a couple of observations from my years as a road warrior strategy consultant with all of the black and blue marks derived from trying to help CEOs lead major organization change projects. The first is that traditional organizational structures are unable to fully take advantage of today’s network and communication technologies that enable both more efficient and entirely new business models. Functional silos are ineffective structures to align the full power of the enterprise to delivering customer value. Today it should be more about aligning capabilities that tap skill centers from in and outside of the organization. Today it is more about an operating architecture to deliver value then it is about an organization structure. The key leadership roles are more about managing a network of capabilities and strategic alliances then about managing a portfolio of corporate functions.

The second idea I would share is the distinction between making today’s business model more efficient and exploring entirely new business models. Most organizations have improved their ability to harness technology to make today’s business model more efficient. Companies have ramped up product development efforts and streamlined every process to improve the competitive position of the current business model. Today that is necessary but not sufficient. In addition, leaders must explore new business models if they hope to sustain top line revenue growth and strong global competitiveness.

At BIF-3 you remarked that “CEOs don’t have the expertise to change systems”. What did you mean by that?

Most CEOs today have only had to lead a single business model throughout his or her entire career. They have not had to significantly change business models and focus primarily on how to make the current business model more efficient and competitive. I suspect that the CEO of tomorrow will have to change their business model several times over the course of his or her career. The successful CEO will establish an ongoing process to explore new business models, even models that might threaten the current one. Where do they teach business model innovation? Where do CEOs turn to learn this new strategic imperative? The Business Innovation Factory is focused on this important market unmet need.

Having now hosted three successful multi-disciplinary idea conferences, what would you say are the key factors to a successful event?

People, People, People. Richard Saul Wurman, the founder of TED, is both a friend and mentor of mine and he told me early on that when he welcomed participants to his events, he always said, “Welcome to the dinner party I always wanted to have and now can.” Through our summits, we’re looking to create experiences that spark intelligent conversations. We look for innovators from all walks of life who can tell a fresh story. But that’s only one part of the equation. Just as important are the audience members. Our audience is made up of people with a genuine passion for what they do. When you bring that all together, good, inspiring concepts will arise. We are looking forward to BIF-4 on October 15-16th.

Over the three Summits, which storytellers surprised and/or inspired you the most? Why?

William Gibson, author of Pattern Recognition, is right in saying “The future is already here, it’s just unevenly distributed”. I’ve often caught glimpses of that at our annual summits. I am most impressed by innovators from places you wouldn’t expect them to come from. Colonel Dean Esserman, who is implementing an innovative business model for community policing, spoke at BIF-1 and BIF-3, and gave all of the summit participants compelling insights on what business model innovation is all about. All of our storytellers have had a unique story to share and I always say that it is up to our BIF community to make the personal connections that are most meaningful to them. I am most gratified by the stories I hear after the summit about connections and new projects that have been launched with BIF as the catalyst.

From BIF-2, Peter Gloor described the differences between star and galaxy network topologies. A star network is all about ego and is self limiting. Everything must go through a central node for the network to survive, limiting growth and innovation. A galaxy network enables actionable connections among all nodes. I couldn’t help but make the connection to BIF which works everyday to strengthen an emerging galaxy in support of our mission to enable collaborative innovation.

Where do you look for inspiration? Are there any organizations, people, books or websites that you find especially inspiring?

I am most inspired by my own children and the next generation of innovators that they represent. It makes me hopeful for our future. Unlike dinosaurs like me who struggle to understand what it means to live, work, and play in a shiny new networked world. For them it is a natural act. They have been brought up to collaborate across silos and have almost no patience for organization boundaries that get in the way of new ideas and solutions. I think the most important thing we can do is to enable them to get underneath the buzzwords of innovation to the real solutions that we must scale in healthcare, education, public safety and quality of life. I feel good about building a network of innovators that are ready to roll up their sleeves and to demonstrate that there truly is a better way.

Thank you, Saul.

BIF innovation interview Q&A Rhode Island Saul Kaplan the eclectic curiosity interview series