Innovation butterfly
Encyclopedia
The Innovation Butterfly is a metaphor
that describes how seemingly minor perturbations (disturbances or changes) to project plans in a system connecting markets, demand, product features, and a firm's capabilities can steer the project, or an entire portfolio of projects, down an irreversible path in terms of technology and market evolution.
' encountered in complexity and chaos theory
.
.
Perturbations can come from decisions made within the firm or from those made by its competitors, or they can result from external forces such as government legislation or environmental regulations, or unexpected spikes in the price of oil
. How the innovation system evolves as a result of the innovation butterfly can lead ultimately to an innovative firm's success or failure.
Complex systems, in domains such as physics
, biology
, or sociology
, are known to be prone to both path dependence
and emergent behavior. What makes the behavior of the innovation butterfly different is market selection, along with biases in individual and group decision making within distributed innovation settings, may influence the emergent behavior. Furthermore, managers in most fields of business endeavor to reduce uncertainty in order to better manage risk. In innovation settings, however, because success is based upon creativity
, managers must actively embrace uncertainty
. This leads to a management conundrum because innovation managers and management systems must encourage the potential for a butterfly effect but then must also learn how to cope with its aftermath.
How innovation butterflies are 'chased' is highly managerially relevant. Most butterflies end up 'merely' consuming a considerable amount of time and resources within a project, or for an innovation portfolio, within a firm. However, some butterflies can also unleash regime-altering
emergent outcomes within an entire industry segment. Moreover, once these emergent outcomes begin to mature, and in some instances lead to disruptive innovations, they become extremely difficult to manage, Hence, shaping the innovation system before potential innovation butterfly's effects completely emerge is critical.
Metaphor
A metaphor is a literary figure of speech that uses an image, story or tangible thing to represent a less tangible thing or some intangible quality or idea; e.g., "Her eyes were glistening jewels." Metaphor may also be used for any rhetorical figures of speech that achieve their effects via...
that describes how seemingly minor perturbations (disturbances or changes) to project plans in a system connecting markets, demand, product features, and a firm's capabilities can steer the project, or an entire portfolio of projects, down an irreversible path in terms of technology and market evolution.
Origins
The metaphor was developed by researchers Anderson and Joglekar. It was conceived as a specific instance of the more general 'butterfly effectButterfly effect
In chaos theory, the butterfly effect is the sensitive dependence on initial conditions; where a small change at one place in a nonlinear system can result in large differences to a later state...
' encountered in complexity and chaos theory
Chaos theory
Chaos theory is a field of study in mathematics, with applications in several disciplines including physics, economics, biology, and philosophy. Chaos theory studies the behavior of dynamical systems that are highly sensitive to initial conditions, an effect which is popularly referred to as the...
.
How it works
The innovation butterfly arises because many innovation systems are made up of a large number of elements that interact with each other via several non-linear feedback loops containing embedded delays, thus constituting a complex systemComplex system
A complex system is a system composed of interconnected parts that as a whole exhibit one or more properties not obvious from the properties of the individual parts....
.
Perturbations can come from decisions made within the firm or from those made by its competitors, or they can result from external forces such as government legislation or environmental regulations, or unexpected spikes in the price of oil
Price of petroleum
The price of petroleum as quoted in news generally refers to the spot price per barrel of either WTI/light crude as traded on the New York Mercantile Exchange for delivery at Cushing, Oklahoma, or of Brent as traded on the Intercontinental Exchange for delivery at Sullom Voe.The price...
. How the innovation system evolves as a result of the innovation butterfly can lead ultimately to an innovative firm's success or failure.
Complex systems, in domains such as physics
Physics
Physics is a natural science that involves the study of matter and its motion through spacetime, along with related concepts such as energy and force. More broadly, it is the general analysis of nature, conducted in order to understand how the universe behaves.Physics is one of the oldest academic...
, biology
Biology
Biology is a natural science concerned with the study of life and living organisms, including their structure, function, growth, origin, evolution, distribution, and taxonomy. Biology is a vast subject containing many subdivisions, topics, and disciplines...
, or sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...
, are known to be prone to both path dependence
Path dependence
Path dependence explains how the set of decisions one faces for any given circumstance is limited by the decisions one has made in the past, even though past circumstances may no longer be relevant....
and emergent behavior. What makes the behavior of the innovation butterfly different is market selection, along with biases in individual and group decision making within distributed innovation settings, may influence the emergent behavior. Furthermore, managers in most fields of business endeavor to reduce uncertainty in order to better manage risk. In innovation settings, however, because success is based upon creativity
Creativity
Creativity refers to the phenomenon whereby a person creates something new that has some kind of value. What counts as "new" may be in reference to the individual creator, or to the society or domain within which the novelty occurs...
, managers must actively embrace uncertainty
Uncertainty
Uncertainty is a term used in subtly different ways in a number of fields, including physics, philosophy, statistics, economics, finance, insurance, psychology, sociology, engineering, and information science...
. This leads to a management conundrum because innovation managers and management systems must encourage the potential for a butterfly effect but then must also learn how to cope with its aftermath.
How innovation butterflies are 'chased' is highly managerially relevant. Most butterflies end up 'merely' consuming a considerable amount of time and resources within a project, or for an innovation portfolio, within a firm. However, some butterflies can also unleash regime-altering
Regime change
"Regime change" is the replacement of one regime with another. Use of the term dates to at least 1925.Regime change can occur through conquest by a foreign power, revolution, coup d'état or reconstruction following the failure of a state...
emergent outcomes within an entire industry segment. Moreover, once these emergent outcomes begin to mature, and in some instances lead to disruptive innovations, they become extremely difficult to manage, Hence, shaping the innovation system before potential innovation butterfly's effects completely emerge is critical.