A pioneer in the field of innovation,Peter Engstrom formerly was vicepresident for corporate knowledgecreation and chief knowledge officerfor federal-sector business at ScienceApplications InternationalCorporation. He was responsible forcreating, developing, executing, andproviding knowledge architectures forfederal, state, and local governmentknowledge management activities andfor designing knowledge interven-tions for commercial and nonprofitorganizations. He previously servedin the federal government in a varietyof operational, staff, and senior advi-sory positions and has extensiveexperience in the areas of govern-ment organizational learning andimprovements. He retired from theU.S. Air Force, with the rank ofcolonel, in 1994. His service decora-tions include the Defense SuperiorService Medal, Legion of Merit,Defense Meritorious Service Medal,Bronze Star, and Vietnamese Cross ofGallantry.

Engstrom’s areas of interest andexpertise include organizational cre-ation and transformation, knowledgearchitecture, high-performance orga-nizational renewal, strategic and tac-tical planning, and top-level systemsanalysis. He is one of the foundingmembers of the Learning InnovationsLaboratory at Harvard University,where chief knowledge officers studyhow organizations learn; has beeninvolved for twenty years with theAssociation of Managers of

Innovation; and has been a guestspeaker and lecturer on national pol-icy and strategic issues at the U.S.Air Force Air University and its AirWar College, the U.S. Army WarCollege, and the Air Force Academy.

Engstrom recently spoke withSarah Glover, a research analyst atCCL, about issues related to innova-tion.

SG: What innovation have you beenmost grateful for in your life?PE: A bicycle I used on my paperroute. When I was a kid I had severalpaper routes. We were a poor family,though we didn’t know it. My fatherwas a professional but he followedhis passion, not where the moneywas. I had paper routes from the timeI was seven years old through high

school. I had two or three at a time tomake more money, and I’d hang thecarrier bags on my bicycle. One day,when I was about eight or nine, Ihung too many bags on my old bicy-cle and it collapsed in the middle ofthe freeway.

It was old Route 66, with fourlanes of fast-moving traffic, and carswere going in all directions. It was amiracle I wasn’t run over. Mygrandfather, a brilliant inventoralthough he didn’t have a highschool education, had been visitingus. After my bike collapsed, he wasthere, and I was scarred up prettygood, and he said, “Well, let’s inventa bicycle that would be right for apaper route.” And we created a bicy-cle from scratch. We took a veryheavy, old Schwinn frame that hadbeen junked, and put new fat tireson it and special handlebars that heconstructed so the bike could holdcarrier bags with probably 250pounds of papers yet I could stillsteer the bike and be able to throwpapers. All the other paper carriersasked me where I got the bike andwhere could they get one like it. Mygrandfather and I painted the bike anice silver color, placed chromefenders on it to protect the papersfrom mud splashes, and I was in tallcotton.

As much as anything, thatshowed me what was possible, some-thing I had never considered before.It was one of those ahas, [which Irecognized] even as a kid, that goes

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12

Face to Face

New and Improved:A Conversation

with Peter Engstrom

to the heart of innovation—of consid-ering what is possible and then creat-ing something that makes a differ-ence to solve that problem.

SG: That was your early founda-tion, and now here you are begin-ning what you call the “third chap-ter” of your life. What themes tietogether all the chapters for you?PE: I would say spiritual awarenessis something that’s very important.As you experience life’s challengesand they start stacking up, it startsopening doors and creating a need tounderstand more and more. Also, theimportance of family and extendedfamily—as my family has developedand grown I can clearly see theimportance of interconnectivity andthe blessings it brings.

The cycle of life events justdevelops on its own, and when youweave that cycle into innovation, alot of what is magic about innovationis hearing the pattern when it hap-pens. I think a lot of what we can doas we try to look at innovation inorganizations is to help people besensitized to how fragile a good ideais in its early stages and how to pro-tect it and capture it and listen to ithit.

SG: So the most important thing isto pay attention, to find time toreflect and notice?PE: I’m sure that CCL sees this whenit tries to create understanding aboutleadership and innovation. The pres-sures of the workplace, the hammer-ing of the bottom line, all the thingsthat go into making a successful busi-ness are really counterintuitive togood innovation. There’s no trainingto teach you how to notice.

SG: What is the state of the fieldright now for social entrepreneur-ship [using entrepreneurial princi-ples to effect social change], anarea where you plan to focus in thisthird chapter of your life?

PE: We were trying to understandinnovation when the Association ofManagers of Innovation (AMI) wasstarted twenty-five or more years ago,and I won’t say it was a naïve time,but it was a dangerous time forunderstanding how innovation wasworking—or not. There was a socialand problem-solving experiment bythe Army’s chief of staff to createwhat he called the Delta Force. Thiswas not the special operations teamsof today but rather an attempt to getideas from the field to the leadership

in the shortest time possible. Itallowed anyone, from private to gen-eral, to go on line after hours andcommunicate with the senior leader-ship. Think about that in today’sorganizations. What boss would wanthis subordinates to talk to the seniorteam without his filter and intermedi-ate oversight? It threatened the Armyhierarchy in a very profound way,and it quickly went away. There weresome great lessons learned there forinnovators.

I believe we have become muchmore sophisticated, those who are

real practitioners of innovation, atunderstanding how innovation canactually threaten an organization. It’snot that innovation itself is threaten-ing, but the change and risk it bringsabout can cause organizations to shyaway from it unless they really needit to survive.

If that understanding was theretwenty-five years ago, it certainlywasn’t apparent to a lot of us whowere attempting to bring innovationinto our various organizations. AMIhas shown us a classic example ofhow innovation can succeed but atthe cost of the innovator. In AMI overthe years, we’ve seen many peoplewho have been fired from their jobsas innovators. There have been a cou-ple of studies done that have shownthat the half-life of innovators isabout two to three years before theybecome such a thorn in the side oftheir organizations that the organiza-tions make them go on to more “pro-ductive” work.

So to me, when I look at socialentrepreneurship, which is maybe thenext generation of innovation, I thinkwe’re at the same point where wewere looking at innovation in organi-zations. We’re just starting to see howwe can make social innovations thatmake a difference.

I think people have been willingto spend resources only on things, notprocesses. This has certainly beentrue in the government. People havebeen willing to buy things that theycould put their hands on but have hada very hard time buying social ideasor social impact, even though intu-itively they may have known it wasimportant. It’s much less risky to buythings—when you can say, “Here arefive widgets that I paid for,” asopposed to, “Here is a process thatI’m going to bring in that’s going tohelp us align our organization.”

SG: You have talked about howtwenty-five years ago we were onthe verge of understanding innova-

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13

A lot of what we can do

as we look at innovation

in organizations is to

help people be sensi-

tized to how fragile a

good idea is in its early

stages and how to pro-

tect it and capture it

and listen to it hit.

tion in organizations, and now weare on the edge of understandingsocial innovation and entrepre-neurship in the same way. Howwell would you say that grassrootsapproach to innovation in organi-zations has worked in the pasttwenty-five years?PE: Well, that is a great question, butI think you know the answer, whichis, unfortunately, that it hasn’t beenadopted.

SG: What are the easiest and hard-est parts of innovation for organi-zations?PE: The easiest thing is for the lead-ership to say, “Of course we supportinnovation, absolutely support ourpeople, we want them to be innova-tive, we want them to bring newthings in, yada yada yada.” We haveheard it over and over again. Thehardest part is that we know theirwords aren’t true, because innovationhas risk associated with it and organi-zations are risk averse. So unless theculture is there that actually supportsrisk, you are never going to see inno-vation readily accepted by the organi-zation unless you can show how youare going to manage the risk. Thereare so many obstacles that stand inthe way of successful innovation inorganizations, and probably for verylegitimate reasons—because organi-zations are not designed to take risks.

SG: They are there to do repeat-able, successful things.PE: A bottom line. And a bottom linein American business, unfortunately,is all about dollars. Risk is tied tobottom lines, and bottom lines aretied to investors, because investorscontrol your continued tenure in anorganization. The paradigm that is inplace is not very risk tolerant.However, if you ask, do we under-stand innovation much more than wedid twenty-five years ago? I think theanswer is yes. Is it implementedmuch more than it was twenty-five

years ago? I would say probably yes,but the organizations where it isimplemented are organizations thatclearly understand and are willing totolerate the risks because they havehigh levels of trust in their people,high levels of collaboration and com-munication, and all of the things thathave come out of those twenty-fiveyears that we now understand arenecessary to put in place to make aninnovation culture actually work. Soinnovation is much easier to under-

stand but is still probably pretty diffi-cult to implement.

SG: What other advice do you havefor people who want to create aninnovation culture or support inno-vation in society or their organiza-tions? You’ve alluded to developingtrust and developing the ability totake risks. Anything else?PE: I would struggle to come up witha Robert’s Rules list of how to do it. Ithink one of the things that are proba-bly most important is honesty.Sometimes telling the truth to peopleis very difficult because they don’twant to hear the truth, and you put

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yourself at risk. I certainly have, in anumber of cases.

I have a story from early in mymilitary career that I use to illustratethe boundaries between what is andis not doable. I was privileged to bechosen to be sworn in as a regularofficer by the chief of staff of theAir Force at the time, General JohnD. Ryan. There were about six of usbeing sworn in, and we were tryingto find things that lieutenants couldtalk about with four-star generals,and of course there weren’t many.And General Ryan was musing onhis probably thirty-five-year careerin the military. He was about toretire, and he said he had seeneverything there was to see in themilitary.

He said, and I’m paraphrasinghere: I can put it into four categories.There are those things I don’t liketoday and I have the authority tochange and I change them. The sec-ond category is those things that Idon’t like today but don’t haveenough authority to change, and Iremember to change them tomorrowwhen I do. The third category isthose things I don’t like today and Iwouldn’t like tomorrow but I’ve gotto learn to live with. Then there is thefourth category, those things that Icannot live with today or tomorrowand I will not tolerate. When I reachthat type of dilemma, I’ve got todraw my saber and draw a line in thesand and say, no, I’m not going to dothat. It’s either illegal, immoral, orunethical.

Sooner or later in your career, hesaid, you are going to be required todraw your saber and draw that line inthe sand. And he said the differencebetween management and leadershipis having the courage to pull thatsaber out and draw that line in thesand and say, no, we’re not going todo that.

Sometimes when you draw yoursaber and draw your line in the sand,you are going to get fired for doing

14

Unless the culture is

there that actually sup-

ports risk, you are

never going to see inno-

vation readily accepted

by the organization

unless you can show

how you are going to

manage the risk.

it, and that’s a pretty big risk. But it’smorally the right thing to do. Youhave to be able to look in the mirrorin the morning and be satisfied withwhat you see.

SG: Any other advice?PE: Innovation is such a volatileword for leaders. If you ask a CEO,“Do you value innovation?” I’m surethat nearly all of them would answer,“Of course I do.” But if you did asurvey of the CEO’s organization andwent back to the CEO and told him,“This is the most risk-averse, low-endinnovation organization on the conti-nent,” the CEO is not going to behappy to hear that. After his initialpronouncement the survey’s assess-ment is a direct reflection on him. Sofinding the tools that allow you tomake those statements and back themup goes to the heart of what you cando to help an organization becomeinnovative.

There is some ground-laying thatis common to organizations: theyhave to understand trust, there has tobe a reasonable level of collaboration,and there has to be a good level ofcommunication.

I think part of helping an organi-zation, as an individual, is not justtelling them something is wrong butgiving them alternative approachesand gentle slopes they can go up, asopposed to steep gradients of step-change innovation.

SG: Who are the most innovativepeople you know?PE: People who can build bridges—for example, between stratified popu-lations. People who can figure outhow to bring people together, whichis no different from what needs tooccur in many organizations. Thereare many types of innovation: there’sinnovation close to the woods, inno-

vation in the woods, and innovationin the meadow, and in each casebridges must be built to connect thevision across the woods and throughthe meadow if the innovation is to besuccessful.

My godfather was a subchief ofthe Choctaw Nation of Oklahoma,and he used to tell me Indian sayings.Some of them are really quite pro-found. One of them is about bridgebuilding. He said that you build abridge of trust one stick at a time, but

you burn it down only once. So it’simportant to create trust among thepeople you are talking to, based onyour integrity. Whether they like tohear it or not, if they know it is com-ing from a position of integrity theywill disassociate you from the mes-sage, which is exactly what you want.You don’t want people to shoot youas the messenger. You want them tohear the message, even if the messageis hard for them to hear. Trust is theultimate lubricant in creating an inno-vative culture.

SG: Can you tell us any more aboutyour projects and ideas as youmove into the third chapter of yourlife?PE: One project is creating a commu-nity-of-practice Web site for peoplewho are facing the problems ofaging. Nobody starts out as a caregiv-er, but many of us end up that way.When you look around, there are fewresources to help you cross thatbridge. What we want to create is ageneral knowledge asset that is avail-able to all, with the provision that ifyou use it the only cost is to reportback what you have learned andused.

The other project I have a passionfor is creation of a center for thestudy of peace. It would blend theknowledge of our living Nobel laure-ates, United Nations ambassadors,and other peacemakers into a singleresource available to all. We havegone to various government leaders,congressional sponsors, communityactivists, scholars, and educationalinstitutions, and I believe that whatwe are ultimately going to create nowis a knowledge center for helping tounderstand and resolve conflict at alllevels of society, from local to inter-national. So cities, counties, or statescould draw on this center’s experi-ence to deal with conflict they arefacing in the creation of good govern-ment. Woven into that would be aneducational component that ties backinto the public school systems onhow to teach good government, howto put in place the tools that allowyou to reach across the gaps betweenpeople who have different ideas.Once again, the challenge has been tocreate a vision that all can see andsupport, because there is risk inattempting to create peace. But it isworth the risk if even one conflict isresolved through the process.

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15

Sometimes when you

draw your saber and

draw your line in the

sand, you are going to

get fired for doing it,

and that’s a pretty big

risk. But it’s morally

the right thing to do.