Innovation: The Missing Dimension (review)

Interpretation and analysis are two antithetical ways of thinking, yet both must happen simultaneously to achieve innovation. So state Richard Lester and Michael Piore in explaining the need to better understand the role of interpretation in new product development. Lester leads the Industrial Performance Center at the Massachusetts Institute of Technology, and this book is largely a work in industrial policy. Still, this book also is suffused with Piore's notions of the politics of identity, and the "looming crisis" tone of their introduction echoes that of Piore's work with Charles Sabel on The Second Industrial Divide (New York: Basic Books, 1984).

America's economic boom in the 1990s, the authors argue, too often is credited to intense competition—and rational response to competition—rather than to innovation in new products and services. Furthermore, they claim that, in discussing innovation, management pedagogy, engineering practice, and economic policymaking all put too much emphasis on the role of rational problem solving and instead should emphasize the interpretive art of problem definition. As Americans, they write, "we risk neglecting those capabilities that are the real well-springs of creativity in the U.S. economy—the capacity to integrate across organizational, intellectual, and cultural boundaries, the capacity to experiment, and the habits of thought that allow us to make sense of radically ambiguous situations and move forward in the face of uncertainty" (p. 5).

The essence of their argument is in the fifth chapter, where they develop a matrix on how to combine the analytical and interpretive mindsets. The analytical mindset might reduce the interpretive mindset to the process of looking outward and simply defining the customers' needs. Interpretation, on its own terms, is best when self-driven. Interpretation focuses on process rather than projects. Interpretation thrives in ambiguity, which analysis seeks to close up. Each is necessary for successful product development, "but at any given moment an individual has to choose one lens or another; innovation cannot be viewed in both ways at the same time" (p. 175).

"Public spaces" are where managers stoke the essential tension between interpretation and analysis. And while Lester and Piore discuss how public spaces are created within individual firms as basic research laboratories and around industrial districts, they conclude that one useful public space is the regulatory arena. In the regulatory process, however, the tension is sequential: the analytical moment comes when regulations are written, and the interpretive moment comes when they are applied. Thus, perhaps a better example of their public space is the university, where disciplinary communities constantly engage in cross-border conversations on problem definition without expecting real closure.

Lately, historians of business and technology have done good work on problem definition—which, granted, is easier to understand in retrospect—though there is nothing especially historical about this book. Lester and Piore's case studies—of cell phone switching, of Levi Strauss and blue jean laundries, and of Aspect Medical Systems as an exemplary medical devices company—are conveyed without useful narrative detail. Likewise, a chapter on "missed connections" attempts to survey the literature on analysis and interpretation but surveys neither literature with much depth.

Business historians might instead value this book as a readable discussion of concepts useful in explaining innovation during the postmodern turn in American business. Lester and Piore identify integration as the central organization problem in product development. Good product managers work like cocktail party hosts, they claim, able to identify interesting people then introduce topics with enough ambiguity to make a conversation worth continuing. They recognize the need to maintain distinctive voices, as with technical expertise, but also the need to develop pidgins where the existing languages lack certainty. Public spaces for interpretation have grown narrower over the past decades, they conclude, as competitive pressures in the U.S. economy have mounted. For innovation to drive the American economy, public spaces must be reinvigorated, and scholars must better understand the value of interpretation.