The challenge of injecting innovation into large, staid, and stalled organizations has long vexed leaders, consultants, and academics. The list of failed efforts goes on and on, including Yahoo!, Motorola, Blackberry, Sears, HP, Kodak, RadioShack, and that terrible merger between Chrysler and Mercedes-Benz. Yet there are exceptions. Some tired old companies do turn vibrant. And there are well-told stories about how and why old struggling companies have beat the odds and changed their cultures, practices, and products for the better — although it is important to remember that nothing life is permanent, so such successes are best viewed as temporary and precarious.
My favorite such stories include Lou Gerstner’s Who Says Elephants Can’t Dance, which I riff on for the title of this piece. Gerstner details how he led IBM’s turnaround when innovation was stalled and the collective energy of the company was focused on politics, in-fighting, and preservation of outdated traditions rather than excellence. And IBM customers were routinely confused and neglected by the company. Creativity INC describes how, after Steve Jobs sold Pixar to Disney, President Ed Catmull and others from Pixar revitalized the spirit, confidence, and storytelling at the iconic but then struggling Disney Animation Studios. And one of the best such tales is James Surowiecki‘s 1998 New Yorker piece “The Billion Dollar Blade.” It tells how a group of insiders at Gillette banded together to oust leaders who were leading the company into “commodity hell” and returned to Gillette’s roots as a product innovator.
I have a new candidate for anyone intrigued with the nitty-gritty of instilling innovation at scale: Michael Arena’s new book Adaptive Space. I read an advance copy several months ago and was taken with the instructive blend of theory and research (especially on social network theory and innovation), stories about GM and other companies, and practical advice about what actually works. The book is compelling and fun to read, and accomplishes this without a hint of breathless hype or exaggeration.
Many Silicon Valley companies that were once cute smart little startups but are turning into big dumb companies could a learn a lot from Adaptive Space (including Tesla). As Michael shows, making innovation happen in a big company is a lot different than in little one. Michael’s book will be released tomorrow and we dropped our Stanford ecorner FRICTION podcast with Michael yesterday — which we titled “Agile on Edges: Managing Misfits.” (You can listen to it, or if you prefer, read the transcript).
I can’t quite believe that I am praising book written by a GM executive. A decade ago, I was convinced that GM was doomed because it had a broken culture (based on frequent direct and indirect interactions with the firm’s managers and executives). In 2008, I wrote a very critical post about the company that argued GM’s core competence was captured by the phrase “No We Can’t” — GM managers were the most skilled people I had ever met at explaining why, although they knew better ways to do things, it wasn’t a good idea for GM to do them. They were a perfect illustration of The Knowing-Doing Gap, which Jeff Pfeffer and I wrote about back in 2000. And you likely recall that the company did, in fact, did go through Chapter 11 Bankruptcy in 2009 and was bailed out by the U.S. Government.
What a difference a decade makes. GM paid back the money. Under CEO Mary Barra‘s leadership, GM is financially healthy (some analysts make the case that the stock market undervalues GM, especially compared to Tesla). And, based on my admittedly biased view, the “no we can’t” mindset is fading fast and innovation is evident in more and more GM people, practices, and products.
The beauty of Michael’s book — and our conversation on the FRICTION podcast — is that he digs into powerful nuances the propel innovation in big companies. He has much insight into how to dampen and overcome bad friction in big companies like General Motors, and about when friction is useful too — including resistance to new ideas, conflict over how promising new ideas should be realized, and careful (and sometimes slow) development of promising ideas before they are implemented at scale. He explains that, yes, some parts of big companies can and should be entrepreneurial, experimental, move fast, and do risky things; but it would be a disaster if everyone acted that way. Following work on the ambidextrous organization, he suggests that big companies must also simultaneously accomplish the routine, proven, and well-rehearsed stuff that makes money right now.
I was taken with Michael’s analogy that, to strike the right balance between scale and speed, he thinks of the core of a big company as much like a supertanker — where routine things happen, people have well-defined roles, and changes in direction are made with much forethought and unfold slowly. On the edges, however, are many speedboats, which move fast, travel to many new places, and try new things — all without affecting life on the supertanker. Many speedboats fail. Those that succeed get bigger and bigger, and when they become really successful, often come aboard and become part of the supertanker’s operations.
Michael’s insights about how to manage the links between the supertanker and the speedboats are especially useful. Drawing heavily on social network theory, Michael suggests that, while having very smart people is important to innovation, more and more research suggests having the right blend of people and positions in the network, and creating the right connections between them, is the key to being a big innovative organization — for binding together what happens in the supertanker and in the speedboats. For example, he talks a lot about challengers, people who “break through the current status quo,” and “see a different set of possibilities” The key, however, is that constructive challenges aren’t just complainers and critics — they don’t just annoy and distract their colleagues, and thus create dysfunctional friction. Instead, “they help break down the brick wall or pull other people and their ideas through the brick wall so that it can become the new big idea.” And, as Michael added, they either have solutions to problems they complain about or ideas about how to develop solutions.
Our interview and Adaptive Space unpacks the different kinds of roles and people that work together to bring new ideas into the core of social networks. Michael pointed out that “ideas developed inside small teams are 43% more likely to be rejected by the larger organization.” But when new ideas are advanced by “energizers” — people who leave others feeling more motivated and enthusiastic about their work, themselves, and the organization — the new ideas are far more likely be heard and spread. The implication, which has been around the innovation literature for a long time, is that the most successful innovators are adept at getting others excited about new ideas, about their roles in helping to develop and spread the ideas, and about selling the ideas to outsiders. Or if they are skilled at finding or inventing new ideas, but aren’t adept energizers, they make innovation happen by teaming up with expert energizers. Steve Jobs and Thomas Edison were master energizers, but neither of those famous innovators had the best technical skills in their companies or industries. They become renowned innovators by teaming-up with more skilled inventors and technologists.
I also like Michael’s observation many of the best innovations already exist inside the organizations that need those ideas. He explains that social networks play a crucial role in finding and spreading these good but largely unknown and unused internal ideas. The role of “brokers” is key — these are people with connections to diverse people, groups, and ideas inside and outside of the organization. Because they have their fingers in so many different pies, brokers are often the first to learn about good ideas in their organizations and are in position to spread them to places where the ideas are not known or used. Michael says that brokers often uncover “positive deviance,” pockets where great things are happening and that most of their colleagues don’t know about. For example, Michael talks about a nurse at Einstein Medical Center in Philadelphia who knew about an area that had far lower rates of MRSA infections than elsewhere the hospital. The nurse attributed these lower rates to a janitor named Jasper Plummer. He taught doctors and nurses to remove their splattered surgical gowns in a way that sealed the soiled gowns in their surgical gloves. That method made his clean-up job easier and isolated the infection in the gloves. That nurse is a textbook example of a broker: Her connections to that unit meant she was one of the only a few people who knew about that practice and was also connected to the many other people and parts of the hospital who could benefit from using it — and thus Plummer’s practice was spread it throughout the medical center.
A final thought about Michael Arena’s attitude and perspective. When we talked, Michael acknowledged my grumpy assertions that life in organizations is often messed up, frustrating, and exhausting. Yet he did not want to dwell on the causes and symptoms of dysfunctional friction that are rampant in nearly all big organizations. He wanted to talk about how to overcome and remove these and other obstacles to innovation — and he especially wanted to talk about the good things in organizations, and how networks enable people to use their connections to find, develop, and scale good ideas. Michael’s Adaptive Space, Lou Gerstner’s Who Says Elephants Can’t Dance, and Ed Catmull’s Creativity INC differ in many ways. The authors of all three of these wonderful books, however, have the same perspective on what it takes to fix a big stalled company: You can’t let the bad news and setbacks get to you down. Your job is to make things a little bit better each day. And there is always something constructive you can do to make that happen.
Bob Sutton is a Stanford Professor who studies and writes about leadership, organizational change, and navigating organizational life. Follow me on Twitter @work_matters, and visit my website and posts on LinkedIn. My latest book is The A–hole Survival Guide: How To Deal With People Who Treat You Like Dirt. Before that, I published Scaling Up Excellence with Huggy Rao. My main focus these days is on working with Huggy Rao to develop strategies and tools that help leaders and teams change their organizations for the better — with a particular focus on organizational friction. Check out my Stanford “FRICTION Podcast” at iTunes or Sticher.
This article first appeared on LinkedIn.
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