This article isn’t about Tesla. It’s about leadership, innovation, and why too many managers fail to grasp the essence of how innovation really works.
Innovation is challenging. Many have tried to tame it with scientific management methods, attempting to make innovation a deterministic process while reducing risks. This noble effort often neglects the true nature of innovation. It’s like trying to make love a risk-free, deterministic process – it just doesn’t work. These attempts usually squeeze out all the good parts, stifling creativity and ultimately achieving the opposite of what we want.
So, What Can We Do?
Should we just wait for serendipity and accept the risks? Absolutely not. But process, innovation labs, and strict planning won’t cut it either.
Just like with love, the best approach is to:
- Accept the Unpredictability: Acknowledge that we don’t know everything.
- Implement Adaptive Methods: Use techniques that help manage unpredictability.
- Cultivate Resilience: Develop a mindset that withstands inevitable setbacks.
Innovation experts know these principles well. So why do we still see innovation relegated to separate departments in so many organizations? Why are there still processes trying to manage innovation risks?
The Answer: It’s a Mindset Issue
To understand this, let’s look at Tesla’s Cybertruck.
Ask managers, even those in the automotive industry, about the Cybertruck, and you’ll often get laughs and head shakes. They’ll say it’s not a good product, too expensive, unsuitable for European streets, and just a fantasy of an affluent nerd for other affluent nerds.
While I might agree that the Cybertruck isn’t a great product in Tesla’s lineup, what these managers miss is crucial:
The Cybertruck was never meant to be a best-seller!
Its purpose isn’t to bring in customers or revenue directly. So why does it exist? Is it really just because a nerd wanted to live out his Cyberpunk dreams? No, it’s because Tesla understands how innovation works.
The Cybertruck is packed with firsts for a mass-production vehicle: 48V architecture, Ethernet, gigacasting, steer-by-wire, exoskeleton, and more. Most automotive managers would break into a sweat implementing just one of these innovations in the next decade – Tesla does it all in one model.
Key Points for Companies Excelling at Innovation
- Embrace Failure: If you want to innovate, you must welcome failure.
- Iterate Quickly: Try more often than your competition.
- Integrate Innovation: Make it a part of daily work.
- Focus on Learning, Not Profits: Profits will follow.
- Seek Real-World Feedback Early and Often: Validate your ideas continuously.
Innovation isn’t a linear process. Any attempt to make it one will stifle it. The key to mitigating risk and increasing serendipity is embracing failure and rapid experimentation.
The Cybertruck’s value isn’t in its sales figures. Its true value lies in the learning from trying numerous new things. Some ideas will fail, others will need iterations, and some might be great already. All these learnings lead to future innovations in products and production methods.
What seems like a failure today could turn into huge competitive advantages tomorrow.
The Mindset of Innovative Companies
Innovative companies are okay with failing. They welcome it as a learning opportunity. This mindset difference is evident in how engineers, investors, and managers view the Cybertruck. Some laugh and predict failure, while others see immense learning potential and future success.
When you think about innovation in your company, how do you approach it? Do you isolate it in an innovation lab, or is it part of your daily work? How do you handle failed experiments? Would your company be proud or embarrassed to release a Cybertruck-like product in your industry?
Reflect on these questions and consider how your leadership and mindset towards innovation can evolve. Embrace failure, iterate quickly, and make innovation a core part of your daily operations. The future of your company depends on it!
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Thank you for reading The Agile Compass. I’m Matthias, here to help you help those around you become agile.
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