Yes, That Elephant Can Dance: General Motors' Chief Talent Officer on Scalable Innovation

Yes, That Elephant Can Dance: General Motors' Chief Talent Officer on Scalable Innovation
The problem of instilling creativity in huge, staid, and stagnant businesses has long perplexed executives, consultants, and academics. The list of failed ventures includes Yahoo!, Motorola, Blackberry, Sears, HP, Kodak, RadioShack, and the disastrous combination of Chrysler and Mercedes-Benz. There are, however, exceptions. Some tired old businesses can be revitalised. And there are well-told stories about how and why old failing organisations have beaten the odds and improved their cultures, procedures, and products – however it is crucial to remember that nothing in life is permanent, so such accomplishments should be considered as transient and precarious.

One of my favourite such stories is Lou Gerstner's Who Says Elephants Can't Dance, which inspired the title of this work. Gerstner describes how he managed IBM's turnaround at a period when innovation was halted and the company's collective energy was focused on politics, infighting, and the preservation of obsolete traditions rather than quality. And IBM clients were frequently perplexed and ignored by the firm. After Steve Jobs sold Pixar to Disney, President Ed Catmull and others from Pixar reinvigorated the energy, confidence, and narrative at the legendary but struggling Disney Animation Studios, according to Creativity INC. And one of the best such stories is James Surowiecki's "The Billion Dollar Blade," published in the New Yorker in 1998. It tells the storey of how a handful of Gillette insiders worked together to depose management who were dragging the company into "commodity hell" and return Gillette to its heritage as a product pioneer.

Michael Arena's latest book Adaptive Space is a new candidate for anyone interested in the nitty-gritty of fostering innovation at scale. I read an advance edition some months ago and was impressed by the informative blend of theory and research (particularly on social network theory and innovation), tales about GM and other organisations, and practical guidance on what works. The book is interesting and enjoyable to read, and it does it without a trace of frantic hype or hyperbole.

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Many Silicon Valley companies that were once charming smart small startups but are now enormous dumb corporations could learn a lot from Adaptive Space (including Tesla). Making innovation happen in a large organisation is very different than making it happen in a small one, as Michael demonstrates. Michael's book will be launched tomorrow, and we released our Stanford ecorner FRICTION podcast with Michael, titled "Agile on Edges: Managing Misfits," yesterday. (You can listen to it or read the transcript if you like.)

I can't believe I'm applauding a book written by a GM executive. A decade ago, I was persuaded that GM was doomed due to a dysfunctional culture (based on regular direct and indirect interactions with the company's managers and executives). In 2008, I wrote a very critical essay about the corporation in which I argued that the term “No We Can't” represented GM's primary ability – GM managers were the most skilled individuals I had ever met at explaining why, even though they knew better ways to do things, it wasn't a good idea for GM to do them. They were a classic example of The Knowing-Doing Gap, which Jeff Pfeffer and I discussed in 2000. And, as you may recall, the corporation filed for Chapter 11 bankruptcy in 2009 and was bailed out by the US government.

What a difference ten years can make. GM repaid the loan. GM is financially sound under CEO Mary Barra's leadership (some analysts make the case that the stock market undervalues GM, especially compared to Tesla). And, in my admittedly biassed opinion, the “no we can't” approach is quickly vanishing, and innovation is visible in an increasing number of GM people, methods, and products.

The beauty of Michael's book — and our discussion on the FRICTION podcast — is that he delves into the subtle intricacies that drive innovation in large corporations. He understands how to reduce and overcome bad friction in large corporations such as General Motors, as well as when friction can be beneficial, such as resistance to new ideas, conflict over how promising new ideas should be realised, and careful (and sometimes slow) development of promising ideas before they are implemented at scale. He adds that, while some portions of large corporations can and should be entrepreneurial, experimental, move quickly, and take risks, it would be disastrous if everyone did. Following his work on the ambidextrous organisation, he recommends that large corporations must also do the routine, proven, and well-rehearsed stuff that earns money right now.

I was struck by Michael's description that, in order to find the correct balance between scale and speed, the core of a large firm should be likened to a supertanker — where routine things happen, people have well-defined tasks, and changes in direction are made with care and unfold slowly. Aboard the outside, however, are several speed boats that cruise quickly, see new locations, and try new things — all without interfering with life on the supertanker. Many fast boats fail. Those that succeed grow in size, and when they reach a certain level of success, they frequently come onboard and become involved in the operations of the supertanker.

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Michael's suggestions about how to manage the connections between the supertanker and the speedboats are very helpful. Drawing heavily on social network theory, Michael suggests that, while having very smart people is important for innovation, more and more research suggests that having the right mix of people and positions in the network, as well as creating the right connections between them, is the key to being a large innovative organisation — for connecting what happens in the supertanker and what happens in the speed boats. For example, he frequently refers to challengers as individuals who “break through the current status quo” and “see an alternative set of possibilities.” The crucial point is that constructive challenges aren't just complainers and critics — they don't simply upset and distract their colleagues, resulting in dysfunctional friction. Instead, “they assist in breaking down the brick wall or pulling other individuals and their ideas through the brick wall so that it might become the next big idea.” And, as Michael pointed out, they either have answers to the problems they are complaining about or ideas for how to develop them.