In This Issue:
Why Innovation Has Trouble: Lessons from the Boeing Dreamliner
A recent Wall Street Journal article (January 24, 2013) titled "Innovation Is Messy Business" by Daniel Michaels is about the new Boeing 787 Dreamliner jet, which has attracted considerable attention lately due to its problems. The article does a good job pointing out the perils associated with innovation. Yet, Boeing's Dreamliner difficulties illustrate important points that go beyond the Wall Street Journal article's innovation can get messy theme. Based on my 25+ years of research into business success and failure patterns, what happened with the Boeing 787 Dreamliner also sheds insights about why innovation becomes so problem plagued.
Evolutionary, Iterative, but Not Big Leaps
In fact, buried right at the beginning of the Wall Street Journal article is a little nugget that offers the key to why Boeing's Dreamliner situation is so messy. Early in the article, it says that Boeing "decided to take the biggest leap in airline technology in a generation." In light of my research, the phrase "take the biggest leap" is key to why Boeing is having serious difficulties.
According to my research, innovating via huge jumps is generally perilous. Successful innovation involves what has been called the adjacent possible, not distant big leaps. As I discuss in my "Evolution, Not Revolution: How to Innovate Without Destroying Your Business" report, which was published on my website in early 2007, successful innovation comes via gradual, evolutionary steps, not via huge jumps. In my report, I say:
"An extraordinary innovation that triggers drastic change may be perceived as revolutionary because it is vastly different from what most people have previously experienced." "Yet, it was actually evolutionary for those who developed the idea and spearheaded the innovation's adoption. The developers and nurturers of the innovation took several evolutionary steps to achieve what the rest of the world sees as a revolutionary breakthrough."
Business guru Jim Collins makes a similar point about revolutionary innovation in his latest best-selling book Great by Choice, where he talks about the series of iterative steps that comprise what in hindsight looks like a single creative breakthrough. Whether successful innovation is described as evolutionary steps or as an iterative process, the key point is that it does not occur with a big leap. That's why the phrase "take the biggest leap" is key to what triggered Boeing's Dreamliner problems.
Small Bets Succeed
Furthermore, the Growth Leaders Study, which came out of the University of Virginia in 2008, found that the most successful corporate growth initiatives entailed small bets, not high risk. This study is further evidence that huge bets which "take the biggest leap" are not the route to success.
Still, the nature of Boeing's industry might misleadingly give the impression that the benefits of small bets do not apply to it. As the Wall Street Journal article points out, "aviation innovation is especially risky because the stakes are so high". So, Boeing's business seems to require big bets. But, while this is true, in my view based upon the research, this doesn't mean the airliner industry should ignore the overwhelming evidence against taking the biggest leaps.
I explain this in my September 2008 newsletter article "How Small Bets are Valuable-even for Big Bet Business Models (example--Boeing)," that I wrote in response to a comment posted on business guru Tom Peters' blog. The comment, posted by David Foster, asked how the Growth Leaders Study's success from small bets principle could apply to companies like Boeing, where the nature of the business entails infrequent, big bets.
To answer this, my newsletter explains that striving for small bets generally benefits all companies because it is the principle, not the actual size of the bet, that matters. The size of successful bets is relative, and depends upon the business model. By the nature of its business, Boeing's bets will be bigger than the bets of many companies. So, for the greatest success, high stakes companies like Boeing can keep their bets smaller in a relative sense.
For example, companies like Boeing can experiment, when possible, on a smaller scale. They can proceed in a stepwise fashion to avoid big jumps into the unknown and guard against bets that are far too large. Although Boeing can do quite well with the giant sized bets that normally encompass its business model, Boeing must do what it can to keep its bets from becoming excessive. This is why trouble emerged for the Dreamliner after Boeing opted to "take the biggest leap".
Yet, since aircraft design entails relatively larger bets, glitches may be expected. It is beyond the scope of this article to ascertain how many glitches are essentially normal when designing a major new aircraft. Instead, this article concentrates on Boeing's bets being large in a relative sense, and how such large bets do not follow the patterns of success, thus, setting the stage for problems with the Dreamliner.
Completely New Can Bring Peril
Besides an attempt to "take the biggest leap", the Dreamliner has been described as "all new". There was new composite fuselage, instead of aluminum. There was a new electrical system. The Dreamliner's design differed from that of earlier aircraft in so many ways. Additionally, Boeing even adopted a new outsourcing approach, relying heavily upon outside suppliers to design and build the Dreamliner. Thus, with so many facets of the Dreamliner completely new, the ability to proceed without peril was hindered.
All these new elements require learning, primarily through evolutionary steps or an iterative process. Until that learning takes place and necessary expertise accumulates, the innovation easily runs into problems. Worse yet, although the 787's launch was eventually delayed, Boeing had pushed to forge ahead quickly with the Dreamliner, thus, reducing time available to learn. As a result, the innovation did not go smoothly and became messy.
Some have attributed Dreamliner's woes to weak execution. But, this is not entirely the case. Dreamliner execution could have gone more smoothly if the strategy behind the innovation had been better aligned with the patterns of success. Especially if attempted quickly, taking huge jumps is not a successful innovation strategy. It is extremely difficult, if not impossible, to execute smoothly when almost everything is completely new. I explain this in my July 2010 newsletter article "Strategy versus Execution: Strengthen the Strategy to Improve Execution", and in a related article I wrote for MWorld, a quarterly published by the American Management Association.
Unfortunately, today's companies may feel compelled to innovate in big jumps, like Boeing did. It has been a time when huge, formerly prestigious corporations have stagnated from not changing. So, major corporations were strongly urged to innovate and change. To some extent, this was warranted since many stagnating companies had a pent-up need for change (which I discuss in my November 2008 newsletter). But, once the change engine jump starts, it is time to refocus. The emphasis should then switch from merely urging any change, to encouraging gradual, evolutionary steps that drive business success.
Companies need to identify and take those evolutionary steps. They need to move forward gradually in ways that build upon their strengths. They need to innovate in pursuit of the adjacent possible, rather than distant, radical change. That's how businesses succeed without succumbing to messy peril.
La Grange Park, IL