Freedom, Inc_ - Brian M. Carney [21]
R&D experts are very important, but organizing their activities into large, often isolated, bureaucracies, providing them with big budgets, and hoping it will lead to profitable innovations at competitive costs hasn’t worked very well. Twenty years ago, Richard Florida and Martin Kenney, authors of The Breakthrough Illusion: Corporate America’s Failure to Move from Innovation to Mass Production, asked why the Japanese seemed much better than American companies at turning scientific research into profitable and innovative new products. Their conclusion: “White-collar scientists” in the United States were “arrogant toward shop-floor workers.” As a result, “most [American] corporate R&D labs retain [a] specialized, assembly-line model of organization,” which leaves them deaf and blind to ideas that don’t come from the “right” places.18
In sum, besides a costly—and bureaucratic—R&D program and a big patent portfolio, most traditional bureaucracies have little to show in terms of effective innovation. Even at companies such as Intel and the consulting firm Accenture, it takes real guts for an employee to push their ideas if they fall outside a small number of officially sanctioned R&D projects.
Jay Hedley was a junior consultant at Accenture who had a blockbuster idea with the potential to bring in tens of millions of dollars for his company and possibly even more far-reaching benefits for the U.S. economy.19 He had designed—and would eventually patent—an electronic system for assessing tolls on cars traveling at highway speeds without installing transponders in the cars. And yet at nearly every step, he was blocked or turned down in his quest for support for the project. If it wasn’t for his tenacity—he is a U.S. Air Force Reserve pilot who has served tours of duty in Afghanistan—his wit, and his good relations with many executive assistants, his idea would have never been tried. But when, through good fortune and the good offices of those vital assistants, he got it started, and when a top manager, by chance, learned about it over a beer in a bar, the idea was named the innovation of the year at Accenture. Hedley went on to become the company’s innovation hero—and all the official obstacles he’d faced before being discovered were quietly forgotten or brushed aside.
Organized around structures that tell people how to do their work and control them while they do it, “how” companies are fundamentally hostile environments for the ideas proposed by their frontline people—the vast majority of the workforce. One of the first managers to whom Hedley submitted his idea told him dismissively, “You’re supposed to chop wood. Later, you will tell us where the wood is.”
As Gordon Forward—who has a doctorate from MIT and worked in research and development before leading Chaparral Steel—told us, “Good ideas die every day” in command-and-control companies.20 Asked whether their current job “brings out their most creative ideas,” only 17 percent of those “not engaged” and 3 percent of “actively disengaged” employees answered affirmatively.21 Recall that together, these two groups of employees make up 73 percent of the American workforce.22 It’s no wonder that, despite plenty of talented people on their payrolls, many traditional bureaucracies have to rely on innovation “heroes” or on special “creativity” programs and platforms to ensure that ideas are heard and transformed into innovative products and services. When a company’s structures broadcast to the vast majority of people that their ideas don’t matter—that they are supposed “to chop wood”—it comes as no surprise that it will resort to extraordinary measures “to find where the wood is.” Some companies don’t even do that and are forced to buy innovation from small, creative companies—from which we get the all-too-common strategy of growth by acquisition.
Liberated companies such as Gore have long understood the limits of a closed