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.
I put-up a post a few months back about the long list of successful Stanford dropouts, from Tiger Woods to the founders of Yahoo! and Google. I was reading the San Francisco Chronicle this morning, and was amused to see one of the most successful VC's in the valley seems to actively seek dropouts, with an added twist. I quote: 
