Monday, April 30, 2018

Persistence Enables Innovation

Changes keep coming. Yesterday’s new thing is likely to be eclipsed by another new thing tomorrow. Many companies try to catch these waves, but only a few last. What separates the innovators from those who flame out?

Some say it comes down to being able to "pivot" into new areas fast. But in fact, the opposite is true; it comes down to persistence.

Here is the problem. You can redesign your company to become something completely different overnight, but companies that pivot overnight lack depth. After all, how deep is your ability in an area that you just discovered yesterday? You may be able to offer a product, but you’ll lose the first time you run up against a firm that has a deep background of knowledge. And to have depth of knowledge, you need to maintain a consistent focus over time.

For example, a few years ago the data storage company NetApp was approached by the Swiss stock exchange for technology to deal with connecting networks in a novel way to improve data availability and disaster recovery. NetApp’s head of Europe back then was Andreas Koenig, a scrappy “can-do” executive with a good understanding of NetApp’s technologies. Koenig knew that NetApp had been doing research for some time on continuous data availability and disaster recovery for networks spanning different locations. So he went back to corporate R&D to find a solution for this customer. There he found “Metrocluster,” a project that had been researched extensively and then shelved by the company’s corporate engineering group. Koenig resurrected the project, to the surprise of some insiders. But the product was a hit in Europe and quickly became an important part of NetApp’s product offering.

Note the key fact in this story: NetApp engineers had been working persistently on the problem for some time – even before it was clear that there was product demand. So when the market took off for this product, NetApp was able to respond well; they had deep knowledge in this area. A number of companies claim to have this kind of product, but how well-developed is their technology? The firm that persists builds its capabilities, and will win against the Johnny-come-lately.

The key to successful innovation is persistence. Keeping your focus over time builds deep knowledge. In a world of fads and fashions, have the courage to stake out a domain where you are the expert. You won’t be all things to all people, but when you do compete, you’ll win.


Systematic evidence of this idea is in my paper with Elizabeth Pontikes.

Sunday, April 15, 2018

Wrong-headed Leadership

The idea is common sense. Giraffes repeatedly stretch out their necks to get at leaves, and so over generations this action has made their necks very long. So reasoned Jean-Baptiste Lamarck in 1801, offering an early (though now discredited) version of evolutionary theory featuring heritable traits acquired by use. Over the centuries, the idea seems to keep reappearing, perhaps because we wish adaptation were so controllable. Notoriously, Joseph Stalin favored the idea as being consistent with revolutionary thinking - and profoundly harmed Soviet-era scientific progress by enforcing his belief. Wrong-headed leadership can do a lot of damage.

I see wrong-headed leadership in business all the time. Like Stalin, business leaders routinely believe that ideas are true because they want the ideas to be true. For instance: "Our organization can be both extremely efficient and extremely innovative at the same time." We know from research that this claim typically is not true; there is a trade-off between the high-variance behaviors that spawn innovation and the low-variance behaviors that make for efficiency. Yet the idea keeps reappearing, perhaps because we wish adaptation were so controllable. And so for decades management gurus have claimed to have discovered the way to make this wishful thinking true.

And when it comes to knowing the truth, our emotions seem to make things worse. Often teachers appeal to their students by being funny, or exciting, or nice, or passionate. At least since Aristotle we've known that emotional persuasion often trumps logic. After I teach a class, students tell me they "enjoyed" their experience. Hmm. Did they learn? If enjoyment is the point, perhaps class should feature a real comedian.

Same goes for the other Aristotelian appeal - credibility. Often successful business leaders become lecturers at business schools. Listen to them describe why they think something is true, and you will often hear "In my class, I teach...". Because they teach it, it must be true?

Of course, our belief in the truth of an idea should depend on whether the idea is supported by research. Such an appeal to logic lacks the emotion of pathos or the bluster of ethos, but it helps us to avoid wrong-headed thinking. Next time you accept an idea as true, ask yourself why. Wishful thinking? Good feeling? Bluster? You may be headed toward your own episode of wrong-headed leadership.

Brad Jackson has written an interesting book on this issue.