As things were winding down, I was talking with some of the executives a few weeks back at our Customer Focused Innovation executive program about themes that we might emphasize more in the program next year. I realized that one of the topics that we didn’t devote much attention to, but that we ought to, are the drawbacks of creativity and innovation – - both the reasons that working in creative places can be an unnerving experience and the reasons that trying to make money from creativity is a dangerous career path. The business press -- and U.S. culture more generally -- treats innovation as something that is always a good thing. But I think that people like me who “sell” creativity owe it to our students, clients, and collaborators to talk about the drawbacks.
Toward that end, I talk about some of the drawbacks in the closing chapter of Weird Ideas That Work. In addition to the edited excerpt below, I would also be curious to hear form others about other drawbacks, as I am starting to worry that – - as much as I love the creative process – -- it is important to warn would-be innovators about the journey:
The terms creativity, innovation, and fun are often used in the same breath. But before you rush ahead to build or join an innovative company, I feel obliged to warn you about the hazards. Working in an innovative place can be annoying and frustrating, or worse. Renowned authors including Stanford’s James Adams and The University of California’s Barry Staw assert that many people say they want a creative workplace, but few would be happy if they actually worked in one. Indeed, a few years ago the Intel Corporation removed “Fun” from the list of core values that employees wear on their badges. A cynic might say that Intel has never been a fun place, so at least they are no longer hypocritical about it. After all, Intel is well-known encouraging conflict and internal competition. They even hold classes on how to use “constructive confrontation.” Intel might be a bit nastier than absolutely necessary, but to build a company where innovation is a way of life, things need to be done that are unpleasant, or even downright frightening.
……[Y]ou should also think hard about the risks that the evolutionary model implies for the average person or company with a new idea. The human tendency to be optimistic means that most of us believe we will be among the small percentage who succeed. But the most likely outcome is that you or your company will be among the many casualties required so that a few can survive and flourish. I return to James March one more time:
"Unfortunately, the gains for imagination are not free. The protections for imagination are indiscriminate. They shield bad ideas as well as good ones—and there are many more of the former than the latter. Most fantasies lead us astray, and most of the consequences of imagination for individuals and individual organizations are disastrous. Most deviants end up on the scrap pile of failed mutations, not as heroes of organizational transformation. . . . There is, as a result, much that can be viewed as unjust in a system that induces imagination among individuals and individual organizations in order to allow a larger system to choose among alternative experiments. By glorifying imagination, we entice the innocent into unwitting self-destruction (or if you prefer, altruism)."
Silicon Valley is renowned for the wealth it has produced, all those millionaires and billionaires. But most start-ups fail to produce fabulous wealth, even those funded by elite investors. Stories about the bursting of the Internet bubble can be misleading, there has always been a high failure rate among new companies during even the best of times. One experienced entrepreneur, who helped to start four failed start-ups and two successful start-ups, told me “Most new companies are just the road kill in a system that makes venture capitalists rich.” Some of these “alternative experiments” fail quickly and do limited harm……
Others aren’t so lucky. Some companies and people burn through huge amounts of money, devour decades of members’ lives, generate one promising idea after another, yet never succeed. Shaman Pharmaceuticals is such a case. CEO Lisa Conte started Shaman in 1989 to “send ethnobotanists into the jungle to seek out traditional healers and turn their ancient remedies into something you buy at a pharmacy with a prescription – curing first-world diseases, funneling royalties back to the third world and making a bundle for Conte and her investors, which before long included big-time drug players like Eli Lilly." Shaman’s scientists collected leaves, bark, and twigs from over 2,600 plants and isolated the active ingredient in each, patented over 20 new compounds, and conducted clinical trials for drugs to treat diarrhea, fungus, and diabetes. Unfortunately, a decade later, Shaman still has no prescription drugs to sell and received a major setback when the United States’ Food and Drug Administration insisted on further clinical trials for its diarrhea drug. After a 500 to 1 reverse stock spilt in 1999, it switched to selling its diarrhea drug as a nutritional supplement rather than as a prescription drug, and whether the company will survive is very much in doubt.
I don’t want to leave you with the impression that innovative companies are horrible places or you are destined to lose all your money if you work in one. Many people love the mess and confusion. It is more satisfying to come with up new ideas than to repeat the same actions – and the same thoughts – again and again. It is exciting to work with people who are thrilled about some new idea. Even though many new ideas fail, these setbacks often occur where failure is tolerated, even rewarded. And there are large numbers of people who have become rich working in such places, even if the percentage is small. But you should know the hazards of innovation before devoting your days to it.”
P.S. Re-reading this quote also reminds of the time that I teased venture capitalist Steve Jurvetson (in public – at a talk in front of several hundred people). I suggested to Steve that if VCs gave a complete and accurate warning to the entrepreneurs that they funded about what is probably ahead of them, it would need to include language something like “The odds are over 90% that you will devote thousands of hours to this effort and it will fail in the end. Moreover, even if it does become a financial success, the odds are over 50% that you will banished from your creation by your financial backers during the early years of the organization’s life.” Steve took it all in stride, laughing along with the rest of us – but he didn’t argue with me, because although the actual odds might be somewhat higher or somewhat lower than I proposed they are in the ballpark, and he knew it. Steve is also a pretty nice guy, so that helped as well.