Innovation is an exercise in uncertainty: To find the next big thing, smart people need the opportunity to tinker around, fail, and fail often. As Harvard Business School Professor Clayton Christensen laid out in The Innovator’s Dilemma, the asymmetric payoffs that come from the experience of repeated failure underpinning innovation are difficult to come by for established corporations. New market entrants (i.e., startups) possess an enormous advantage in this regard. They can embrace the “Fail Fast, Fail Often” ethos with no caveats. They are all in on every decision.
Startups entrants have no benchmark, no history. They are blank slates, and what they lack in size, skill, or resources they can make up for in risk-taking. Startups either win, and win big, or they fold. Their backs are against the wall and they have nothing to lose.
In his latest book, Antifragile, author Nassim Nicholas Taleb relates the story of Arab commander Tarek to illustrate this dynamic. Tarek on April 29, 711, took a small army across the Strait of Gibraltar from Morocco into Spain, and then, upon landing, burned his ships. Tarek told his troops, “Behind you is the sea, before you, the enemy. You are vastly outnumbered. All you have is sword and courage.” And they took control of Spain.
Taleb provides a heuristic for would-be innovators drawn from this story:
First, try to get in trouble. I mean serious, but not terminal, trouble. I hold—it is beyond speculation, rather a conviction—that innovation and sophistication spark from initial situations of necessity, in ways that go far beyond the satisfaction of such necessity. . . The excess energy released from overreaction to setbacks is what innovates!
This puts large organizations in a quandary. How many managers are willing to let their people intentionally get into trouble? I would guess very few. What, then, is the solution?
First, organizations that want to innovate need to first be clear about their ambitions. Not all technologies are created equal, and not all organizations need the newest technologies. Second, organizations that choose to invest in innovation as a goal unto itself should leverage existing resources and pursue a hybrid solution toward reengineering their business model (or, as Jim Collins would put it, “Preserve the core, stimulate progress.”) Finally, cloud collaboration technologies provide the right medium for this shift to a hybrid solution. The core of the organization can stay on the legacy platform while a pocket cloud instance inspires bottom-up innovation with minimal disruption to the existing business.
In future posts, we will discuss how companies can foster an environment that catalyzes innovation through the institution of cloud collaboration tools. For now, find ways to carve out parts of your company where you can place a lot of small bets on smart people without compromising the fundamentals of your revenue streams. Innovation comes from taking targeted risks, binding your losses, and opening up the possibility for radical achievement, a process in which cloud can play a very helpful role.