There’s a world of opportunity to re-think and re-design the way we make stuff.
Creative Destruction
Joseph Schumpeter applied the term “creative destruction” to the dynamic of the market economy. Not only does the new technology displace the old: the new company displaces the old. Innovation mostly comes from entrepreneurs outside established businesses, engaged in an endless succession of experiments. Most fail, but not all.
Battling Entitlement, the Innovation-Killer
Entitlement: (n.) the belief that one is deserving of, or entitled to certain privileges.
Twenty minutes into my daughter’s tennis lesson, trying to be efficient, I began to pick up the loose balls on the court. Her instructor stopped me. “Parents,” he said, “can mollycoddle their kids, but when they’re with me, they clean up their own mess.”
Entitlement is pervasive in American culture. The athletes and coaches who traffic drugs or abuse children because the rules don’t apply to them; millennials who, at a time of high unemployment, expect more concessions and perks, not fewer; politicians who can legally buy and sell stock based on non-public information. As Aldous Huxley wrote, “Most human beings have an almost infinite capacity for taking things for granted.”
In a business, entitlement inhibits innovation. And without innovation, we have sluggish economic growth. Consider, for example, one of the start-ups I backed as an angel investor. We had budgeted $90,000 for a particular expenditure. At the last moment, one of the senior decision makers unilaterally made changes, none of which was critical, just to throw his weight around. This decision led to a crippling overage of $30,000, a factor in the company’s demise. One business down, fewer jobs created.
A Disciplined Approach to Evaluating Ideas
“Make sure you ask the right questions at the right time.” That’s one memorable piece of advice from a leader at a global innovation powerhouse. Unfortunately, it is a piece of advice that is heeded too infrequently inside large companies.
At many companies, the idea evaluation process revolves around detailed Excel spreadsheets, comprehensive PowerPoint documents, and an orchestrated sequence of pre-meetings leading up to a decision meeting. This kind of disciplined approach works very well when companies have knowledge that lets them be precise in their analysis, and executives have the relevant domain experience to make informed decisions.
Applying this same discipline to nascent opportunities in new spaces can be disastrous. People spend days discussing Excel spreadsheets that are nothing more than mathematical relationships between made-up numbers. Managers working on ideas discover that detailed PowerPoint documents are their biggest enemy, because the details act as bait for nit-picking devil’s advocates. Endless pre-meetings crowd out action-based learning.
