Editor’s note: John Warner, a venture capitalist and economic developer, blogs about innovation and education. He also puts on a venture and innovation conference each year in South Carolina called InnoVenture.

GREENVILLE, S.C. –
A recent post on BusinessWeek.com asked a very intriguing question:

“Why is it so hard to stimulate innovation inside big corporations, while at the same time VCs are awash in innovative business plans and people?”

We announced recently that Swamp Fox has merged with Jute Networks (in Asheville, N.C.) to help people and their organizations become more innovative and productive. Every day each of us gets real work done by working through small, critical networks of trusted colleagues. We have a few critical networks around various aspects of our work, a couple around social groups we are a part of, and one around our family. Even if our contact manager or a social networking site we use documents hundreds or even thousands of people we casually know, we really only work closely with a few dozen people at most on a regular basis.

The most fertile place for innovation is at the intersection of organizations and disciplines, but the organizational cultures and processes we live in tend to lock us into the silos of the people we know.

The BusinessWeek.com post observed:

“[A major] obstacle to innovation within the enterprise… is the company’s own internal structure or processes. The typical middle manager will always give you 10 reasons why they can’t take advantage of a great idea. In 9 cases out of 10, the issues are internal and not at all relevant to the business problem they are trying to solve. All they can see is that implementing the idea will make their job harder.

“In these cases where change management is required, a pilot project is typically the best approach. Assemble a small, engaged team; design and execute a manageable pilot project and then demonstrate and socialize your success. Once other managers within the company see what you have been able to accomplish, they will also want to jump on the success bandwagon. Another benefit: when change happens organically, people will be more committed than if it were imposed from above.”

This approach of creating a small, ad hoc team to get initial traction for a new idea is exactly right in our experience. A champion of an idea gets passionate about creating something new, for whatever reason, and reaches out to a small group of trusted colleagues to explore the idea. The champion defines what is essential for success, and then each member is brought into the group because of some distinctive expertise or resource he or she has.

A recent study at the Harvard Business School, The Silo Lives!, highlights the challenge that champions often face in organizing the type of cross-organizational or disciplinary team that is most likely to spark the most creative ideas:

“Although many companies aspire to promote easy interaction and coordination across departments, office locations, and pay scales, the "boundaryless" organization—like the paperless office—hasn’t materialized.

“The corporate silo is alive and well.

“In an unnamed company with over 100,000 employees, the team analyzed over 100 million e-mails and 60 million electronic calendar entries over a three-month period. The results provide an unmatched look inside the "black box" that hides what Stuart calls the ‘soft wiring’ of previously invisible social networks….

“One of the intriguing findings from our analysis is that electronic and face-to-face interactions are near perfect complements. In other words, people talk to the very same people they email….

“Our analysis indicates that two people who are in the same SBU, function, and office interact about 1,000 times more frequently than two people at the company who are in different business units, functions, and offices, but are otherwise similar. Practically speaking, this means that there is very little interaction across these boundaries.”

Jute Network Relationship Manager is a web-based tool allowing each of us to manage and grow the critical networks of people that we do real work with every day. We don’t want to add hundreds of people to these critical networks; we can’t manage that many relationships effectively. What we want to do is leverage our close, trusted colleagues to identify those handful of people with distinctive expertise or resources outside our normal day to day contacts who can add real value to what we need to accomplish.

We’ll first integrate Jute NRM into the Swamp Fox Community and the InnoVenture Southeast Conference coming up in March 2009. There are over 2,200 online profiles in the Swamp Fox Community and over 600 people will attend InnoVenture. Jute is designed to help you figure out what handful of these people can add something valuable to you.

Beyond your involvement with Swamp Fox and InnoVenture, we hope you find Jute useful enough to incorporate it into the normal routine of managing and growing the critical networks where you get work done everyday. Ultimately we hope your colleagues who experience Jute through participating in your small groups find it a useful tool to adopt themselves.

We’re beginning to use Jute NRM internally now to run it through its paces. In about a month, we’ll begin using it to manage the Steering Committees who are producing the upcoming InnoVenture Forums and Conference. By March 2009 at InnoVenture Southeast, we’ll have a commercial version that is ready for the world.

Stay tuned. We think we’re onto something pretty special, and we’re really looking forward to seeing what you think.