What the Heck is “The Serendipity Economy,” and Why Should We Care?

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August 19, 2013; Harvard Business Review Blog Network


NPQ has often taken on the confused conversation around innovation and performance evaluation. Our position has been that innovation and proof of value are not necessarily linked. Now, in this  blog post on the HBR website, Daniel W. Rasmus talks about logic, rationality, the drive to eliminate waste and seek efficiency, and the use of tools and processes to standardize all of that. This is the perspective through which most managers perceive their operations—a lens which can be associated with the industrial economy.

But Rasmus says that there has also always been a Serendipity Economy flowing from seemingly random and unanticipated interactions that runs in parallel, a place where innovation occurs. One might expect such a space to be speeded up in a highly networked economy. Here are some of the principles and implications of the space, as Rasmus records them for IT professionals:

  • The process of creation is distinct from value realization.
  • Value realization is displaced in time from the act that initiated the value.
  • The measure of value requires external validation.
  • Value is not fixed, and cannot be forecasted.
  • You can’t anticipate the network’s potential for value or any actual value it may produce.
  • Serendipity may enter at any point in the value web, and it may change the configuration of the value web at any time.

He also places great emphasis on the need for courage and patience. “Leaders…need to acquire the patience to monitor serendipitous activity, and the courage to protect technologies and ideas that may take time to mature, or changes in circumstance to reveal their true value—and the willingness to empower people to embrace, explore and follow serendipitous activity wherever it may lead. That means not just finding serendipity in the business, but examining your own shop for new value that can’t be found in lines of code per day or the speed of a call center response.”—Ruth McCambridge

  • Bruce Christensen

    Our industrial equipment design team experienced this serendipitous innovation immediately following the Haiti earthquake. Our efforts had always benefited North American enterprises, but we had some extra time and could see that the poor concrete construction in Haiti caused many deaths. At that moment in time, we had the expertise, time and humanitarian motivation to do something to change the way that Haitian’s produce concrete.

    After designing and deploying some simple industrial technology to assist in better concrete production, we felt we could even add more value – So we rallied other concrete leaders and experts to attend a Cement Trust Symposium in July of this year. They in turn added the extra value of their experiences and knowledge to find a way to improve all cement-based construction products in the developing nations.

    Concrete is the 2nd most consumed product on earth and concrete experts should work together to build trust in these cement-based products and improve local supply chains and provide economic opportunities.

    We can now envision an organization (Cement Trust) that can help to reduce disaster risk for the most vulnerable populations. If your readers are interested in this serendipitous adventure the could learn more here – http://cementtrust.wordpress.com/

    Here is a video of the simple industrial technology that started this value chain to begin:
    [youtube http://www.youtube.com/watch?v=xVP74uXOJh4&feature=youtu.be youtube]

  • DanieL W. Rasmus

    Thank you for the pickup! If I can clarify, elucidate or otherwise add value to this serendipitous (unanticipated, unforecastasble) coverage of my HBR blog post, please let me know.

  • Ralph

    Just as there were many groups that covered the original blue moon and arguably did a ‘better’ or more interesting version, today’s innovations get covered, co-opted, converted, or re-configured into better ideas ..and values. better revealed..Open minds, courage to fail, listening to others, trust in unusual ideas, all are part of the mix to achieve the wonder of seeing new ideas ‘catch on’.

    The Sha Na Na version, with accompanying stage theatrics, is probably the best version…which may have further insight into the value of art.