29 Mar Peters: Innovation the only edge that remains for American business
Relentless and bold innovation is about the only card American businesses have left to play if they are to withstand the competitive threat posed by China, and chief information officers must take the lead in driving innovation, according to author and business innovator Tom Peters.
Peters spoke on Wednesday of the merits of building an “innovation machine” to a gathering of Wisconsin business executives during the Wisconsin Innovates Conference in Milwaukee. During his speaking career, Peters has addressed CIOs about making the business case for technology and becoming innovation leaders in their respective organizations. After a highly entertaining presentation Wednesday at the Midwest Airlines Center, he followed up by advising technology managers to build a “portfolio of the weird.”
“I know they have to invest in the standard R&D formula, but 15 percent or so should be interesting small projects that are truly radical,” Peters said.
Peters is the author of a series of business bestsellers, starting with “In Search of Excellence” in 1982. During his talk in Milwaukee, he extolled the virtues of smaller entrepreneurial firms that are diverse, creative, and flexible enough to innovate and compete, and was highly critical of Main Street businesses that are afraid to compete and inflexible corporations that haven’t embraced diversity. Noting that Boston, where he has purchased a home, has lost several major corporations in recent years, he in effect said, “Good riddance.”
“I don’t care as long as we get a ridiculously high share of entrepreneurial biotechs,” he stated. “I want tomorrow’s jobs.”
China, he said, opens a new foreign-owned factory every 26 minutes, a new foreign-owned research and development lab every 43 hours, and graduates 600,000 engineers annually, compared to 350,000 in India and 70,000 in the United States.
Peters said focusing on cost cutting and efficiency is no longer enough to keep pace with Asia, and he worries about what will happen to the American psyche should the nation be knocked off the economic catbird seat. But he believes American business is capable of competing if companies are willing to continually reinvent themselves in ways that set them apart. “The only way we’re going to survive is to innovate our way out of the box,” he said. “We’re down to one idea, which is innovation.”
Innovation should not be incremental, but big and bold. “I know it’s a counterintuitive point, but it is far easier to make big changes than it is to make small changes,” Peters said. “Think about it. Nobody vaults out of bed at the thought of making tiny changes.”
Striving for strangeness
Creating a portfolio of the weird, and encouraging “freaks” inside the company will help ensure the steady stream of innovative ideas necessary to survive in an ultra-competitive international business environment, he said.
Peters suggested that few “normal” people have ever made history, yet freaks usually are ignored rather than catered to.
“Freaks keep us from getting into ruts, but we seldom listen to them, which is why most organizations are in ruts,” he said.
Diversity plays an important role in energizing an organization with people, especially young professionals, who think outside the box. Upper management, he said, is the place where you are likely to find the least diversity of experience, the largest investment in the past, and the greatest reverence for industry dogma. “The bottleneck is at the top of the bottle,” Peters said, “and that applies as much to a company of 23 people as it does to a company with 23,000 people.”
Part of the problem in achieving diversity of thought, he said, is that only about 5 percent of CIOs sit on corporate boards. “I think that’s a disgrace,” he stated.