Innovators’ Dilemma: Solved?

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We’ve made big leaps forward this year in our understanding of what it takes to innovate in supply chain. Surprisingly, it doesn’t involve recruiting more millennials.

Twenty years ago, Harvard Business School’s Clayton Christensen famously challenged business leaders to confront the technological seeds of their own disruption, and we’ve never looked back. Thanks to a dizzying array of new tools, data and operating platforms, the giants have learned to dance. And not one moment too soon.

Amazon and the retail sector are today’s poster children for industry upheaval, but the recent breakup of industrial conglomerates General Electric, United Technologies Corp. and DowDuPont speaks to the scope and enormity of the revolution that’s afoot. There’s also the quiet, $130-billion-per-year torrent of venture capital investment into new digital-first entrants across sectors ranging from biotech to energy to agriculture. We are just one step ahead of the barbarians at the gate, and that’s independent of more near-term concerns around trade disruption and impending recession.

So it’s no surprise that our own November 2018 survey of 3,500 business leaders finds that 83% perceive that digital innovation and transformation efforts aren’t moving fast enough. We have urgency. What’s exciting is that increasingly we now know precisely where to direct it.

Rhymes with Dexterity

The machines are getting smarter, but the key is still us. In a July 2018 survey, Gartner found that “digital dexterity” — a marker for the ambition and ability of leaders and their teams to invent new digital businesses and work within them — improves the chance of digital transformation success by a whopping 3.3x. In short, those best able to call dynamically on a broad range of experiences and personality types — engineer, connector, pioneer — are best suited to imagine a different future and go after it. In doing so, they run circles around their specialized, routinized peers.

The emergence of entirely new, digitally-native, platform-based businesses like subscription-based Dollar Shave Club (DSC-Unilever) is a direct result of this evolved brand of thinking. DSC disrupted the razor market by, among other things, leveraging an asset-light strategy to manufacture and distribute product. The company built its production and distribution model on a network of third-party service providers — common in labor intensive industries like apparel, but previously unheard of in the shaving business. Unilever acquired the company in part as a learning opportunity about asset-light organizations, but the data suggests the real value lies with the mindset that comes with it.

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Even more striking is that we also now have the ability to peel the onion and get very specific about the underlying individual and team attributes that drive innovation and transformation success. In rank order, it’s a unique cocktail of business acumen (9.9x impact on dexterity), adaptability (7.3x), political savvy (5.6x), collaboration across diverse groups (4.7x) and systems thinking (4.2x).

We should now be able to get a lot more surgical about the value of talent investments and where to target them. And where not: Surprisingly, age doesn’t matter. The belief that we need more millennials to become digitally “native” seems to be at least in part a myth. Our dexterity score is similar across all age groups: 9.4% of millennials, as compared to 8% among Gen X, and 10.7% among baby boomers aged 54 and up.

This is not to say each age group doesn’t bring a unique perspective. If you are selling to young people, it’s wise to bring your customer’s voice on your team. But we may have overhyped our need to cater to my 24-year-old niece just because she’s learning how to program on blockchain. More important is the entrepreneurial capacity to understand business opportunities and reach across functional and organizational boundaries to capitalize on them.

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Built on Community

The only remaining fundamental concern is where to find these people. If just 9% of the population excels in all four quadrants, where do we source talent? Yes, we can grow skills, but realistically some of these attributes are in the DNA.

Leonardo da Vinci was a civil engineer who liked to paint. Nobel Laureate Marie Curie was a political revolutionary with interest in science. Steve Jobs was a calligrapher. Elon Musk is a physicist who happens to obsess about solving the world’s biggest problems. Jeff Bezos co-led a hedge fund before getting into retail. By virtue of their extraordinary capacity to observe and think laterally, around the corner as it were, these exceptional individuals didn’t just build businesses, they reshaped our planet.

We can’t call on lightning and grow more of these. If we do find such an individual, we should get her on the next flight and pay her airfare. The more practical call to action is to amplify diversity in all its facets — to establish a working environment that widens the creative and analytical funnel, drawing on the rebels and those who know how to execute to today’s rules. Initiatives like Levi’s Innovation Lab and the “maker space” at Renault-Nissan-Mitsubishi Alliance are a direct response to the diversity imperative and the urgent call to reinvent.

In the words of Clayton Christensen, “the best way to get a good idea is to get a lot of ideas.” That’s an apt description for the mission this one-of-a-kind supply chain learning community you’ve all built. Dilemma solved.

 

Steve Hochman

Author Steve Hochman

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