Why The Right Way Is Usually The Hard Way
In an interview he gave to Harvard Business Review, Jerry Seinfeld was asked about whether a consulting firm like McKinsey could make the creative process faster. That’s the assumption that many business leaders make, that every process can be optimized. As much as we like to imagine we’ve evolved, we’re still largely stuck with Frederick Taylor’s 20th century management ideas.
“Who’s McKinsey?” Seinfeld then asked. “Are they funny?” When told no, he said, “If you’re efficient, you’re doing it the wrong way. The right way is the hard way. The show was successful because I micromanaged it—every word, every line, every take, every edit, every casting.”
Anybody who’s been a successful performer, whether as an athlete, an actor or anything else knows what Seinfeld means. While there’s something to be said for honing processes to make them more predictable and efficient, to create something new you need to do the opposite. You need to explore to discover and that means being inefficient. Not all who wander are lost.
How Six Sigma Killed Innovation At 3M
After being passed over for the top job at General Electric, James McNerney took over as CEO at 3M 2001, bringing with him GE’s famously disciplined focus on Six Sigma, a methodology that uses rigorous statistical methods for making processes more efficient. Initially, it produced results, improving margins from 17% to 13% in four years.
Yet it soon became clear that McNerney’s approach had took its toll on 3M’s famously innovative culture. Researchers were being asked to systemize their process, list assumptions, and deliver a five-year plan for nascent ideas that had never been tried before. Longtime employees balked, complaining that hit products like Post-it notes could have never been developed under the Six-Sigma regime.
“If you take over a company that’s been living on innovation, clearly you can squeeze costs out,” Stanford’s Charles O’Reilly said in an interview. “The question is, what’s the long-term damage to the company?” A Fortune analysis bears this out. It found that of the 58 firms on its famous “500” list that adopted Six Sigma, 91% underperformed the market in the years that followed. For a famously results-oriented method, that’s not impreessive.
McNerney would leave 3M to join Boeing as CEO in 2005, where he would also bring his Six Sigma approach, most notably to the development of the ill-fated 737 Max. Rushing the process clearly had short-term advantages that improved the stock price, but created long-term problems not only for the company, but for American aviation as a whole.
Much to Seinfeld’s point, McNerney was efficient and he was doing it wrong.
The Serpentine Path That Led To A Breakthrough Cure For Cancer
In 1891, Dr. William Coley had an unusual idea. Inspired by an obscure case, in which a man who had contracted a severe infection was cured of cancer, the young doctor purposely infected a tumor on his patient’s neck with a heavy dose of bacteria. Miraculously, the tumor vanished and the patient remained cancer free even five years later. Coley then invented a brew of toxins, filtered from bacteria, in the hopes that others could be cured as well.
It was a breakthrough, of sorts, but for more than a 100 years Coley’s work was viewed with skepticism and, in truth, there were serious problems with it. Coley couldn’t explain the underlying mechanism by which a bacterial infection could cure cancer and he couldn’t replicate his results with any consistency. When radiation therapy began showing success, most people forgot about Coley’s work and that seemed to be the end of it.
Yet a small cadre of supporters kept the faith alive. His daughter, Helen Coley Nauts, would establish the Cancer Research Institute in 1953 to support immune-based approaches to cancer treatment. Over the next four decades, glimmers of hope would appear from time to time but, unfortunately no one could make Dr. Coley’s idea work. It remained a pipe dream.
Then, in 1995 there was a genuine breakthrough. Following a hunch, a scientist named Jim Allison figured that maybe the problem wasn’t that our bodies couldn’t identify and fight cancer cells, but that something was switching the immune response off. He followed through and, miraculously, it worked in the lab. Still, even then, he couldn’t get anyone to fund development of a drug.
“It was depressing,” Allison would later tell me and, had he worked under someone like McNerney at 3M, the story might have ended there. But he took the hard way and continued to pound the pavement, get doors closed in his face and suffer innumerable other humiliations, great and small before he prevailed. He would win the Nobel Prize for his work on the development of the first cancer immunotherapy drug in 2018.
What Happened When Experian Threw Out The P&L
When Eric Haller returned to the data giant Experian in 2007 after a seven-year hiatus during which he worked in the startup world, he realized that although the company was increasingly successful, it was also missing out on a lot of opportunities. The problem, as he saw it, was that the company had become “trapped in its P&L.”
Much like at 3M under McNerney, for any new line of business to be pursued, it had to meet strict profitability guidelines. That’s a sensible risk management strategy but, like at 3M, it also limited the firm’s ability to experiment and pursue nascent opportunities where there was no existing product to benchmark off of.
“Opportunities today are greater and they come faster so you have to move faster or you miss them,” Haller told me. “You simply have to be more agile now than you did when I started in the 90’s. We were missing important opportunities because we couldn’t calculate an internal rate of return.” Haller proposed to Experian’s management that it create a separate division, called DataLabs, to pursue opportunities more like a startup would.
Unlike an operating division, Datalabs doesn’t have a P&L or have targets for financial performance. Instead, it goes out and talks to customers to find problems that they can’t solve themselves and puts its crack team of data scientists to work on cracking them. Then they partner with the customer to incubate a business, which eventually gets handed off to an operating division to be scaled up.
Adopting A Changemaker Mindset
One of the things that I’ve learned in over two decades researching innovation, transformation and change is that things that change the world always arrive out of context, for the simple reason that the world hasn’t changed yet. Ideas start out feeble, weak and alone. They need ecosystems to make an impact on the world.
Einstein’s ideas about relativity started out as a boyhood dream about riding on a bolt of light. Penicillin languished in a medical journal for more than a decade before someone noticed it could be useful. Charlie Bennett first got interested in the ideas that led to quantum computing by imagining DNA as some kind of a computer and Jennifer Doudna discovered CRISPR gene editing by researching an obscure defense mechanism in bacteria.
When you look at enough breakthroughs a consistent pattern begins to emerge: First, a seemingly useless idea surfaces, then a period of exploration ensues to identify a problem the idea can solve, resistance from the establishment in favor of some status quo and, eventually, the formation of an ecosystem that can deliver a solution at scale.
There is simply no way to navigate all that with a linear approach. To innovate, leaders need to shift from a manager’s mindset, in which they build consensus, operate in an atmosphere of predictability and focus on execution, to a changemaker’s mindset in which they build coalitions, operate in an environment of uncertainty and focus on exploration.
That’s why, when it comes to innovation, transformation and change, the right way is the hard way. The next big thing usually starts out looking like nothing at all. You don’t get from nothing to something without accumulating some scars along the way.
Greg Satell is Co-Founder of ChangeOS, a transformation & change advisory, an international keynote speaker, and bestselling author of Cascades: How to Create a Movement that Drives Transformational Change. His previous effort, Mapping Innovation, was selected as one of the best business books of 2017. You can learn more about Greg on his website, GregSatell.com and follow him on Twitter @DigitalTonto and on LinkedIn.
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Image: Wikimedia Commons
