The Ritual of Innovation--What The FT's Gillian Tett Knows

I am going out to Stanford in a couple of weeks to talk about the future of Design Thinking/Innovation and I’m prepping by seeing a Ph.d in social anthropology who also happens to be the best financial journalist around at the moment—Gillian Tett. Tett writes a column for the FT and was just appointed head of the US Financial Times. Her book, Fool’s Gold, is a must-read.

I learned three things from Tett’s columns and book: 1- many, if not most of the important innovations over the past decade took place in the financial services space: 2- the innovations were made possible by technology—faster computers and newer algorithms, but the actual creation of the innovations took place within a new and very specific culture of finance composed of ritual, rites of passage and beliefs. Think Thomas Kuhn’s paradigm shift here: from accepting more or less public market regulation to rejecting all regulation and believing that any financial market regulation is bad.

We know that it all ended in financial and economic disaster, with the worst recession since the last depression. The world got THIS close to a complete meltdown because the social context of technological invention messed up. The symposium at Columbia University with Tett will discuss the belief system, patterns of behavior and rules that came together to enable the financial crash. She will use the tools of social anthropology to explain what went wrong with financial innovation and why we need to change the culture of finance, not just the tools of finance, to prevent another catastrophe.

I have been in a nice conversation with Don Norman about what comes first in innovation—technology or culture—and Gillian Tett provides the answer. New technology creates new rituals of behavior, new belief systems and new rites of passage. Technology happens not only within the social context but it creates NEW cultures, new social contexts.

This is why Gen Y culture is so different from Boomer culture. It’s not

just that Gen Y uses social media technology more than Boomers. Gen Y behaves differently because of that technology--it has a different social context. And that social context, that culture, is both more collaborative and more generative. It makes stuff, remixing, creating, sharing, learning.

Gen Y has new rituals. The first adopter of technology behaviors are new rites of passage. And the Learn-Make-Share culture is a new belief system of opportunity and options, compared to the efficiency and choice belief system of Boomers and B-Schools.

Still with me? So in Stanford I'm going to suggest that we look at Design Thinking and Innovation in terms of rituals and beliefs (and serious play) that fit into a new Paradigm that is appropriate to life in beta--our current lives in constant, cascading change.

I'm going to argue that applying the rituals of innovation to our problems in business, health, education, transportation and politics can lead to the most optimum new outcomes.

In terms of business, I will argue that in the 21st century, CEOs and managers need to change the rituals, rites of passage and belief systems in their corporate organizations to boost value creation, revenues and profits. And B-Schools have to adapt as well. In a real sense, the two years at a business school is a rite of passage that teaches rituals and beliefs to the young.

So we need new business bar mitzvahs and bat mitzvahs.

Before it's here, it's on the Bloomberg Terminal.