First impression: this book is either beyond my intelligence.
People in Rainforests are motivated for reasons that defy traditional economic notions of “rational” behavior.
Had to re-read that sentence a couple of times to grasp its meaning. I hit a few more of these texts in The Rainforest, by Victor W. Hwang and Greg Horowitt.
I was a false start. Now and then the writers fall in the trap of academic writing, and they follow the “misguided lessons you learn in academia” as Jason Fried and David Heinemeier Hansson call it in “Rework” (more on that in another post).
The book looks at psychological, neurological context of forming innovation groups, and what to look at. It touches open many other aspects of inactive environments (rainforests).
There’s a sociological aspect to it that very much speaks to my heart.
As veteran Silicon Valley venture capitalist Kevin Fong says, “At a certain point, it’s not about the money anymore. Every engineer wants their product to make a difference.”
This reminds me of The Soul of a New Machine from Tracy Kidder. 
Excellent book by the way, a must read for (computer) engineers and other Betas. You will get your soldering iron out.
Anyway in this book also, the goal of money is way out of sight, it is the product that counts. Personal issues are set aside, esthetic issues with respect to the new machine prevail. The team is totally dedicated to creating the new machine. They are in the flow, very similar to the psychological flow that psychology professor Mihaly Csikszentmihalyi, has described in “Flow”. The state in which people (typically athletes talk a lot about pushing themselves into a flow) where conscious thinking and acting disappear and a person gets totally submerged in the activity itself.
Back to the Rainforest, where the authors have found that a social context is key for a innovative rainforest to thrive. It’s not just about creating the brain power, but an entire entrepreneurial context that turns this brainpower into a innovative growing organism. The trick is to create a social environment where cross-fertilization takes place.
“Governments are increasingly seeking to spur entrepreneurial activity across the entire system, not just for large companies. Today, countries are ambitiously seeking to create entire innovation economies.”
“The biggest invisible bottleneck in innovation is not necessarily the economic desirability of a project, the quality of the technology, or the rational willingness of the customer. The real cost frequently boils down to the social distance between two vastly different parties.”
“Serendipitous networking is essential because, in the real world, it is impossible for a central agent to do everything.”
A lot of word and advice are spent on the topic. Tools are presented as guidelines for achieving such an environment.
“Tool #1: Learn by Doing Tool #2: Enhance Diversity Tool #3: Celebrate Role Models and Peer Interaction Tool #4: Build Tribes of Trust Tool #5: Create Social Feedback Loops Tool #6: Make Social Contracts Explicit”
I am not sure if Hwang and Horowitt prove in their work that a central organization (government) can really steer this. An analytical approach to culture change is something different from a (working) prescriptive culture change. I may be skeptical, but with me are the Fried and Heinemeier again in Rework about culture (in context of an organisation):
“Culture is the byproduct of consistent behaviour.
…
It isn’t a policy. It isn’t the Christmans party or the company picnic. Those are objects and events, not culture. And it’s not a slogan, either. Culture is action, not words.”
The Rainforest continues and brings together Deming’s approach to maximize quality of product procedures by an organization with the entrepreneurial approach towards innovation. This so serve as a model to evolve innovative, informal and entrepreneurial spirited organizations, a kind of primordial soup into mature structured organization.
(In this soup of entrepreneurial elements, a “flow” should be created igniting an entrepreneurial life form.)
“We surmise that one of the major reasons large corporations often fail at innovation―whether they create venture arms, new product divisions, or otherwise―is because they typically create new business divisions in a formal sense without the “cultural walls” separating the Deming and the Rainforest communities.”
Interestingly this is also what Christensen speaks of in “The Innovators Dilemma”. 
Christensen makes a similar claim. Organizations fail at innovation because they manage innovation the same way as they do there mature business units. This inherently fails. There is a lot of similarity between the thinking of Christensen and Hwang here. These guys should talk. And invite Fried and Heinemeier to the party.
I conclude managing innovation in an existing (large) organizations can only be successful if it is operated in a completely separate entity. With their own culture that is free to grow, and in a social environment that is not constraint by bureaucratic “efficiencies”.
