June 2004

Wicked Innovation

We can lament the mischief of hackers, thieves, and tricksters-or we can learn lessons in innovation from them.

By Michael Schrage

I love you.

I love you with a passion that burns like a white-hot nova. As a digital testament to my love, please put this magazine down and immediately go to iloveyouutterly.com to download a very special "I love you" screen saver. You'll love it almost as much as I love you.

Are you back? Actually, I don't love you. I never did. In fact, I'd think you were a few bits short of a byte if you ever clicked to such a site or opened an "I love you" e-mail attachment from someone you've never met. Nevertheless, millions of PC owners have had their machines brought to their metaphorical knees by viruses and worms (virms?) promising love from strangers, "wicked screen savers," or compromising photos of Anna Kournikova. Lord, what fools we mortals be.

But let's turn these bugs into a feature. Cold, dispassionate analysis affirms that such "virmen" are among computerdom's most successful innovations ever. They've utterly transformed the network experience. They're global; they're local; they're persistent; they're pervasive. They cleverly exploit both human and technical weaknesses. They matter.

The proliferation and permutation of viruses and worms offers a superb case study in wicked innovation and innovative wickedness. Why do such innovations succeed? What can and should we learn from their continuing success? Just as society better understands health by better understanding disease, markets better appreciate healthy innovation by grasping the dynamics of pathological innovation.

Deception is at the dark heart of wicked innovation. Alluringly misrepresented e-mail attachments and "phishing" expeditions-the fraudulent use of corporate names and logos to gather people's credit card numbers-are only the most obvious examples. The use of anabolic steroids, human growth hormone, and other illicit performance enhancers in baseball, football, and Olympic sports represents another genre of effectively deceptive innovation. In a field where the price of being found out is high, these "natural" substances give users a competitive edge with a low risk of detection.

Precisely because cheating is the essence of wicked innovation, we need to rethink the role of competition in its pathology. Two kinds of innovators stand out. The first are those who "compete with" each other; that is, they respect certain rules in their efforts to succeed in the marketplace. The second are "compete against" innovators whose goal is to spread their own inventions and eliminate their competition, free choice in the marketplace be damned. Compete-with innovation is about value creation; compete-against innovation is about value negation.