BRASS TACKS: It takes guts, vision to be a ‘breakout’ manager

Q. Some time ago you offered a list of reasons companies are negligent when it comes to fostering dramatic innovation (you called it “breakout” innovation). In my experience, the real problem is managers who lack creativity and guts. Agree?

A. Good managers foment valuable change in their firms in order to stay ahead of the pack. Unfortunately, they are a minority. Most contemporary managers are woefully slow on the draw when it comes to significant alteration of the comfortable status quo. Why don’t more managers embrace breakout innovation? In his enlightening book, “The Innovator’s Dilemma,” Clayton Christensen offers some convincing reasons. His fundamental findings have prompted my observations below:

• Managers are trained as implementers, not as entrepreneurs. Radical change is not their forte, especially if it entails a risk of personal failure. Furthermore, dramatic change is particularly difficult if things appear to be going well, at least for the present. Remember, most “professional” managers have MBAs which, incongruously, means they are masters of business administration. In today’s world “administration” isn’t what’s needed; MBI – mastering by innovation – is the only real ticket to sustainable success.

• Managers tend to be one-trick ponies. They are especially adept at single-channel, concrete-sequential decision-making that involves left-brain applications. Consequently, it is difficult for them to nurture left-brain-driven breakout innovations while their psyches are captives of logical, rational, fact-based performance innovation – the “gradualist” form of change.

• Most truly new products and services cater to a small market (at least initially) and produce (for a while) meager returns on investment. These kinds of returns, of course, dilute the type of exponential growth in sales and earnings that managers of established companies believe they have to demonstrate to “stay in the game.” Also, most executives feel this his kind of “fringe” activity tarnishes the image of “focused leadership” that somebody told them was important for career development.

• “Flashes in the pan” do not create the kind of bright allure that will prompt corporate engineers, product development personnel, marketers and bean counters to take their eyes off the comforting but deceiving promise of success that’s associated with what they are currently doing. Even when companies make sincere attempts to break out of prevailing patterns, they frequently get short shrift from these folks who have “better” things to do with their “bird in the hand.”

• Investors, venture capital gurus and bankers who provide firms with their essential capital don’t cotton to managers who devote time to low-margin initiatives that don’t complement the financial return that comes from the high-margin endeavors the money people believe they originally financed. Myopic moneymen easily conclude that the small returns from breakout innovation at its inception aren’t worth taking one’s eye off the ball already in play. Managers typically succumb to this kind of pressure and stay with the original – safe — game plan.

• New ventures are not easily analyzed, and they make forecasting — a favorite pastime of by-the-book managers — a farce. They see flying by the seat of the pants as a trait reserved unto cowboy entrepreneurs. “Proper” managers, in their view, wait (too long) until they can benefit from the evidence that will allow for sound (albeit sorry) decision-making. Of course, by the time these managers finally see the bandwagon, the parade has passed.

• In the face of a prospering firm’s expansion, diversification and dispersion, classic managers feel a need to “get a handle on things.” They organize, formalize, routinze, prioritize and synchronize to the point that they squeeze the serendipity out of the organization. The tools they over-rely on – organizational charts, policy manuals, job descriptions, pay scales, PERT charts, schedules, rule books, reports, meetings, audits, business plans, “scientific” decision-making, rating systems, cost accounting, spreadsheets, budgets, employee training, cubicles, and – the mother of all “organization” – assigned parking spaces, constrain everyone in the organization from the kind of aggressive, free-form experimentation that is essential to breakout innovation and often puts the final nail in the corporation’s coffin of creativity.

• Managers get most market information from their subordinates, who typically parrot what the customers are saying because they perceive the road to the top is paved with a record of good customer service. When it comes to anticipating the future, leaders and followers alike are typically unwilling to acknowledge the reality discussed in a previous column – the customer can be, and frequently is, wrong.

• Top dogs don’t want to risk dropping their bone in the lake in pursuit of a bigger one. After all, Aesop has told them that the vague, shimmering image of a bigger and better bone they see reflected in the lake of possible opportunity can easily be shattered, causing them to lose everything in the end. This is a particularly compelling deterrent in large, successful, image-conscious firms where there is a lot for a manager to lose beyond merely money.

But with a big measure of personal fortitude, managers can opt for the roads less traveled, the dark, foreboding, unknown alleys that can lead them to market-winning breakout innovations — if they are willing to take the personal risks necessary to make it happen before someone else does. If they don’t, the possibility of failure will become a reality, as they are forced to drop their bone in Aesop’s lake.

Paul Willax is a professor of entrepreneurship and chairman of the Center for Business Ownership Inc., Amherst, N.Y. He also is the author of the book, “Brass Tacks Tips for Business Owners,” available at barnesandnoble.com. If you have a question or suggestion for his column, or to receive a free, weekly e-mail newsletter, “Brass Tacks BrainFood,” write to Willax@TheBrassTacks.com.