I once turned up to meet the Director of Engineering of a national transport company. It was a first meeting and I was late. He was not happy; “If you can’t even get here on time then I can’t see how you could ever help me” he growled. I protested that it was a failure of one of his trains that had delayed me but to no avail. That was my problem; I should have taken an earlier train! The conversation was going nowhere when I spotted on his bookshelf a copy of a book I had co-written on technological innovation. My lateness was soon forgotten as we discussed our experiences of innovation. We worked well together for many years thereafter.
The book that saved me on that day was in some ways ahead of the curve. Its focus was on fostering technological innovation within companies, stimulating R & D departments and putting innovation onto the strategic agenda. It was based on research Brian Twiss and I had carried out amongst innovative firms in the US, Europe and Japan. We combined looking at the ‘hard talk’ of technical development and strategy alongside the ‘soft talk’ of culture and competence. In part, we drew on Gifford Pinchot’s work on Intrapreneurship, which set out a charter for innovators surviving in the big corporate environment. This includes:
- Come to work each day willing to be fired
- Circumvent any orders aimed at stopping your dream
- Work underground as long as you can; publicity triggers the corporate immune mechanism
- Never bet in a race unless you are running in it
- Remember that it is easier to ask for forgiveness than for permission
- Honour your sponsors.
Throughout our book we assumed that corporations can best innovate if they stimulate the right environment or ‘ecology’ through attracting and developing the right people and being prepared to modify culture away from the conformity that the culture word too often implies. We recognised that innovation is an uncomfortable t with the large organisation that has built its success on a current portfolio of products and services with incremental advancements keeping it ahead in the marketplace. The more radical changes pose threats for existing orders. Individuals whose reputation has been built on the current may not view kindly those threatening to take their base away.
‘Innovation’ is always on the business agenda with almost all organisations investing time and effort into finding the next big idea or ways to move the business forward. Indeed, steady, small, incremental changes are part of human evolution – the majority of people naturally seek out better ways of doing things. But the majority of us are also ‘wired’ to fit in, not take risks and maintain harmony in the tribe. Sometimes leaders recognise that a more radical change is needed – a revolution – if the business is to survive. To drive this kind of change through requires a different kind of person and the business knows that bringing them in will almost certainly be risky, disruptive and painful…
It’s not an easy task. As Machiavelli is often quoted as saying:
“there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain of success than to take the lead in the introduction of a new order of things, because the innovation has for enemies all those who have done well under the old conditions and lukewarm defenders in those who may do well under the new”
OE Cam considers executives leading or triggering this change to be ‘Disruptive Talent’. These are individuals who think and act “differently”, who innovate, who challenge conventional wisdom and practice, spot trends, see commercial opportunities and tenaciously find new and better ways to deliver business success.
…individuals who think and act “differently”, who innovate, who challenge conventional wisdom and practice, spot trends, see commercial opportunities and tenaciously find new and better ways to deliver business success.”
As well as disruption to the normal way of doing business, the individual may be seen by others as having ‘disruptive’ characteristics – being arrogant, destructive, argumentative or even psychopathic.
However, it’s not simply down to the individuals; the organisation needs to create the right conditions in which disruptive talent can flourish. Indeed, during my time as CEO of ER Consultants, I sponsored some research with Cambridge University. “Acquisition for Innovation” by Dr Elizabeth Garnsey looked at what happens to tech start-ups around Cambridge when they get taken over by large corporates. We found large businesses that had mostly spent their R & D investment in their own dedicated research centres, increasingly spreading their money into the sponsorship and support of promising business start ups. This often led them to acquiring the start-ups once they had some promising technology or science to exploit. This shifts the innovation risk profile toward the entrepreneur and favours those who have had the drive and independence to find early stage funding to pursue their dream.
Some of the research results were pretty depressing. The issues were less to do with the innovations themselves but more to do with how the entrepreneurs felt they had been treated once they had become part of the larger firm. The corporate blanket had been put over them, they were excessively systematised and bureaucratised, the life was being squeezed out of them and few firms had gone on to further innovate beyond the technology that had initially caught the big firm’s eye.
The talent was in the start-ups but that talent did not thrive in many large corporate cultures. Entrepreneurs entered companies with high hopes of getting the investment to really make their innovation take off and assuming their freedoms would continue. In fact they tended to find laborious investment procedures, executives in the parent firm remaining to be convinced that the acquisition was a good idea and a requirement to conform. One entrepreneur was quoted as saying that working in newco was like “having your child beaten up in front of you every day as you tried to convince sceptical audiences of the merits of your innovation”. It had been the business development teams that had identified the acquisition but with little engagement of those in whose hands the success of the project lay – leading to hostility, bitterness and the exit of the ‘disruptive’ entrepreneur.
Where these acquisitions worked really well was when relationships were nurtured, investment forthcoming, independence sustained and successful products launched. Bridges were built between the entrepreneur and the business. Innovative units were kept separate with networking and collaboration encouraged. For some entrepreneurs the long-term career will never be in the large corporations but where they did leave, the technology had been transferred, a viable business had been created and the entrepreneur had left the acquiring company positively to go and start again.
The innovation ecology has changed and with it the balance of “big R & D” and the “venturing” models. Space travel was once the territory of the big state innovation machine (NASA) – lots of great ideas came out of NASA on how to manage innovation. But times have moved on, technologies progressed, nation states have tired of the huge investment (big R & D) with uncertain results. Out in the Mojave desert there is now a cluster of firms building the space travel vehicles of the future, competing and collaborating and sponsored by some big entrepreneurs such as Richard Branson and Steve Balmer of Microsoft.
So where does disruptive talent fit into this “ecology”?
Creativity and innovation are hard to bottle. Invention is a long way from innovation. Innovation is the creation of a new product or service and taking it to market successfully. Its success depends in part on the product but also the ability to hit the timing, the ephemeral market appeal. An iPad launched in 2014 will have a different success profile to the one Apple launched in 2011.
Many academics have sought to define exactly what it is that makes individuals innovative. It’s more than just the novel or original ideas; it’s about spotting the idea that will fly and seeing it right through to successful implementation – despite resistance, despite conventional wisdom. Research into personality (Five Factor Model) links high innovation with high levels of openness, low agreeableness and low levels of conscientiousness. The jury was out on extraversion vs. introversion and inconclusive on levels of neuroticism !!
It’s possibly the extent of ‘low agreeableness’ that is likely to be the differentiating factor between ‘traditional’ and ‘disruptive’ talent. Hi-potential programmes may correctly identify and develop regular talent but if your business is looking for people to lead a revolutionary change, you may need to look for those who do not fit – find the ones who are a bit less cooperative.
Disruptive talent is just that, disruptive. How we distinguish between ‘disruptive’ and ‘delinquent’ talent is vital. Innovators are disruptive; they disrupt the status quo by creating something new and different. However, all disruptives aren’t innovators. I’m currently working with the Intellectual Property Office that registers UK patents – more than 90% of registered patents never see the light of day in a product or innovation. Patents are the product of creative disruptives and their success rate is low; there are many more disruptives out there who are not creative.
We need to differentiate between the maverick and the loose cannon. The maverick has a mission, focus intense and an insatiable drive to create something. The loose cannon a scatter-gun that fires mayhem in every direction.
Managing the disruptive innovator brings its own challenges – the intrapreneurship charter is not one that is easily managed. Leaders have to legitimise disruptive ideas and actions, in other words make it ok for one part of the business to act and behave differently than another whilst keeping an overall sense of business cohesion.
In the end, it strikes me that innovation is a probabilistic game with few certainties. The question is how can we cast sufficient rational, reasoned and serendipitous opportunities onto the marketplace to ensure that some are successful? The answer lies in a number of key factors each with their own questions – what we can do is increase our probabilities by stimulating all these factors coming together to deliver a market winning result.
The individual questions are: can we identify innovative talent; can we develop it; can we channel it?
The leadership question is: how can we motivate and build the commitment of the entrepreneur whose first loyalty is to fulfilling their dream rather than the firm?
The organisational question is: is it better to try and innovate within existing organisations or set up separate new ones to drive a new product or service to market?
The culture questions are: can we manage failure; can we create a different set of performance metrics that are more reflective of the longer-term and less certain process of innovation; can we lead multiple cultures?
The economic questions are: how far should we stretch the risk: reward equation? To what extent do we need to give the entrepreneur a “share of the action” and ownership in the enterprise or will a success bonus do?
The market question is: how do we assess the market opportunity? How much do we invest in market research or like Apple are we thinking beyond what the market has current identified need of?
- “Managing Technology for Competitive Advantage: integrating technological and organisational development: from strategy to action” Brian Twiss, Mark Goodridge (1989) Pitman
- “Intrapreneuring: why you don’t have to leave the corporation to become an entrepreneur” Giord Pinchot (1986) Harper & Row
- “The Prince” Niccolo Machiavelli (1532)
- “Acquisition for Innovation: a Report into the Organisation and Human Dynamics of Acquiring Innovative Companies” Dr Elizabeth Garnsey (1999), ER Consultants
- “Great Minds Don’t Think Alike? Person-level Predictors of Innovation at Work” Fiona Patterson (2002) International Review of Industrial and Organisational Psychology Volume 17
- “Jony Ive: The Genius Behind Apple’s Greatest Products” Leander Kahney (2013) Portfolio Hardcover
- “Steve Jobs” Walter Isaacson (2011)
- The Economist December 21st 2013