Weird Ideas That Work: How to Build a Creative Company

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9780743227889: Weird Ideas That Work: How to Build a Creative Company

A breakthrough in management thinking, “weird ideas” can help every organization achieve a balance between sustaining performance and fostering new ideas. To succeed, you need to be both conventional and counterintuitive.

Creativity, new ideas, innovation—in any age they are keys to success. Yet, as Stanford professor Robert Sutton explains, the standard rules of business behavior and management are precisely the opposite of what it takes to build an innovative company. We are told to hire people who will fit in; to train them extensively; and to work to instill a corporate culture in every employee. In fact, in order to foster creativity, we should hire misfits, goad them to fight, and pay them to defy convention and undermine the prevailing culture. Weird Ideas That Work codifies these and other proven counterintuitive ideas to help you turn your workplace from staid and safe to wild and woolly—and creative.

In Weird Ideas That Work Sutton draws on extensive research in behavioral psychology to explain how innovation can be fostered in hiring, managing, and motivating people; building teams; making decisions; and interacting with outsiders. Business practices like "hire people who make you uncomfortable" and "reward success and failure, but punish inaction," strike many managers as strange or even downright wrong. Yet Weird Ideas That Work shows how some of the best teams and companies use these and other counterintuitive practices to crank out new ideas, and it demonstrates that every company can reap sales and profits from such creativity.

Weird Ideas That Work is filled with examples, drawn from hi- and low-tech industries, manufacturing and services, information and products. More than just a set of bizarre suggestions, it represents a breakthrough in management thinking: Sutton shows that the practices we need to sustain performance are in constant tension with those that foster new ideas. The trick is to choose the right balance between conventional and "weird"—and now, thanks to Robert Sutton's work, we have the tools we need to do so.

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About the Author:

Robert I. Sutton is professor of management science and engineering at the Stanford University School of Engineering, where he is the former codirector of the Center for Work, Technology, and Organization. Sutton is the author of The No Asshole Rule and coauthor of The Knowing-Doing Gap and Hard Facts, Dangerous Half-Truths, and Total Nonsense.

Excerpt. © Reprinted by permission. All rights reserved.:

Chapter 1: Why These Ideas Work, but Seem Weird

To invent, you need a good imagination and a pile of junk.

-- Thomas Edison

The question is not what you look at, but what you see.

-- Henry David Thoreau

I realized that my competition was paper, not computers.

-- Jeff Hawkins, describing the key insight that led his team to design the Palm Pilot

I admit it. I call the novel ideas in this book "weird" to get your attention. After all, unexpected, even strange, management practices are more fun and memorable than bland old ideas. But there is another reason these ideas may seem counterintuitive: To innovate, companies must do things that clash with accepted management practices, with common but misguided beliefs about the right way to manage any kind of work. In company after company, managers act as if they can keep developing new products, services, and solutions by adhering to customary ways of managing people and making decisions. This happens even in companies where managers say that innovative work requires different practices than routine work. Yet these same managers continue to use methods that force people to see old things in old ways, expecting new and profitable ideas somehow to magically appear.

Last year, for example, I had a long conversation with an executive who wanted some ideas about sparking innovation in a multibillion dollar corporation in a mature industry. I can't reveal the company, but I can tell you it was a book publisher. Profits were falling, and so was the stock price. Wall Street analysts were complaining that the company wasn't innovative enough. This executive was exasperated because her company, especially the CEO, "hates taking risks," and she believed that other senior managers wouldn't back any program that might fail or distract people in the core businesses. She especially emphasized that any program that might further reduce quarterly profits would be unacceptable, even if it had long-term benefits. The CEO and other senior executives were convinced that the business practices they were using to do the company's routine work, the things they did to make money right now, could somehow generate profitable new products and business models.

These executives were dreaming an impossible dream. To build a company where innovation is a way of life, rather than a rare accident that can't be explained or replicated, people need to discard, and often reverse, their deeply ingrained beliefs about how to treat people and make decisions. They need to follow an entirely different kind of logic to design and manage their companies, even though it may lead them to do things that some people -- especially people focused on making money right now -- find to be counterintuitive, troubling, or even downright wrong.

Trying to spark innovation with methods that actually stifle it doesn't happen just in big, old companies. Entrepreneurs start new companies partly because they are purported to be more innovative, free from the pressures in established firms to follow ingrained precedents. Yet, after coaching start-ups for over 20 years, James Robbins finds that entrepreneurs can fall prey to ingrained habits just like managers in big firms. Long before it was a fad, Robbins was creating and managing new business incubators, including an Environmental Business Cluster in San Jose and in Wuhan, China, the Software Business Cluster in San Jose, the Panasonic Incubator in Santa Clara, and the Women's Technology Cluster in San Francisco The software Business Cluster has been especially successful since it was started in 1994. It has nurtured more than 50 new companies, which have attracted over $300 million in funding .

Robbins coaches the entrepreneurs in these incubators to build companies that generate, rather than stifle, new ideas. A sign in his office -- the only sign I saw -- says: The definition of insanity is doing the same thing over and over and expecting a different result. He posts it because so many entrepreneurs suffer from this kind of insanity, which makes it impossible to do anything new. These people are not crazy when they do the same thing over and over again, but expect to get the same result. That is the right way to manage routine work, to make the future a perfect imitation of the past. But repeating the same old routines again and again in pursuit of innovation is pure insanity.

Practices that are well-suited for cashing in on old, proven ways can make innovation impossible. To thrive and survive in the long term, companies must keep inventing (or at least keep uncovering) new ways of thinking and acting.

Organizing Principles for Routine versus Innovative Work

The difference between organizing for routine versus innovative work can be seen by contrasting "cast members" at Disney theme parks with the "Imagineers" at Disney Imagineering, the company's research and development facility in Burbank, California. The job titles are revealing metaphors for the two kinds of work. Cast members in theme parks follow well-defined scripts; Imagineers dream up wild ideas about new things that guests might experience. Whether they are dressed as Cinderella or Goofy, acting as guide on the Jungle Cruise, or sweeping the streets, precise guidelines are enforced to ensure that cast members stay "in role" when they are "on stage." This is Disney's routine work. In contrast, Disney Imagineering is a place where people are expected to keep trying different things, where creativity is the goal. As one former "Imagineer" put it: "You're encouraged to come up with all these great fantasies. Most of your ideas are never executed into reality. That is frustrating sometimes, but protecting the brand, creating compelling guest experiences, and telling great stories are important. The romance is still there. Where else are you asked to come up with wacky ideas for the next great ride for Disneyland!?"

Stanford's James March expresses this difference as: exploiting old ideas versus exploring new possibilities. Exploiting old ideas means relying on past history, well-developed procedures, and proven technologies to do things that generate money right now. Exploiting old ideas happens when McDonald's makes and sells a Big Mac hamburger. Billions of Big Macs have been made in the past, so unless they ask for something special, customers expect all Big Macs to look and taste the same. McDonald's goal is to use old knowledge to make the next Big Mac exactly the same as the last one.

March points out that, in the long run, no company can survive by relying only on established and proven actions. To make money later, companies need to try new things, to "explore" new possibilities. This means experimenting with new procedures, hiring new kinds of people, and inventing and testing new technologies. New ideas need to be invented (or imported) to satisfy customer demands, to enter new markets, to gain an advantage over competitors, or at least to keep pace. McDonald's uses some of the cash from all those Big Macs to explore new possibilities. The question is not whether McDonald's or any other company should do exploration or exploitation. It is silly to argue about whether a company should do only one or the other; it's like arguing over which is more important for an automobile, the engine or the transmission, or which you need more, your heart or your brain. Both are necessary for moving forward. The real question is what proportion of the firm's time and money should be spent on which.

Like other companies that have performed well over the long haul, McDonald's experiments with new ideas. At their Core Innovation Center near Chicago, for example, they constantly try new products, new ways of cooking old products, new ways of queuing customers, and different ways of organizing work in their fully functioning kitchens. Similar labs generate and test ideas for new products in other countries where McDonald's establishments are located. At the moment, for example, McDonald's is experimenting with a technology for cooking their famous fries in about 65 seconds rather than the current 210 seconds. And experiments don't happen just in corporate labs; the Big Mac was invented and tested in 1967 by Jim Delligatti, who operated a dozen stores in Pittsburgh. Other experiments have also been successful, like the McHuevo (poached egg hamburger) in Uruguay, Vegetable McNuggets in India, and the "Made for You" innovation in the United States, where, instead of being kept warm until it is purchased, every sandwich is quickly assembled after it is ordered. But the majority fail, like the McLean hamburger in the United States and a cheese and pickle sandwich tested in Britain called the McPloughman's.

My weird ideas spark innovation because each helps companies do at least one of three things: (1) increase variance in available knowledge, (2) see old things in new ways, and (3) break from the past. These are the three basic organizing principles for innovative work, but as the table shows, the opposite principles are right for routine work. This contrast is not only essential for understanding where I got my weird ideas and why they work, it is also essential for understanding why so many managers unwittingly use flawed practices that fail to spark innovation.

Variance: "A Range of Differences"

Companies where people want to do things in proven ways are wise to drive out variation. This mostly means doing old things in time-tested ways. This is why total quality management experts emphasize that driving out errors, reducing costs, and increasing efficiency of existing products and services requires driving out variation in what people and machines do. This is why Intel, which has dominated the semiconductor industry largely through its manufacturing prowess, uses a technique called "Copy Exactly." When Intel managers agree that something is a good idea, there is a religious fervor about implementing it in an identical way in every Intel factory throughout the world, down to the color that things are painted. It is also why General Electric's CEO Jack Welch has made a fetish out of "six sigma," the quality control regime that aims to reduce variance down to one error in every one million repeated processes.

Driving out variation makes sense when organizations do proven things in proven ways that still work. The exact steps for manufacturing a computer chip at Intel are known in great detail, as are the steps for flying an airplane, doing simple surgical procedures like hernia repairs, or operating a ride at Disneyland. Straying from proven ways is rarely a creative act in such cases; rather, it is a sign of poor training, lack of attention, incompetence, substance abuse, or stupidity. For example, the captain of Aeroflot Flight 593 who broke the rules by giving his children a flying lesson in midflight was stupid, not creative. He first let his daughter fly the plane, then he gave his son a chance. Unfortunately, this 15-year-old boy made an error with the yoke, the plane stalled, and went into a dive that his dad could not reverse. All 75 people on board were killed. When people are flying an airplane or assembling a Toyota Camry, there are enormous advantages to following proven methods. Safety is one of them! Companies that use tried-and-true methods are not only usually safer, they do things faster, cheaper, and more consistently than those that rely on new and unproven knowledge.

When innovation is the goal, however, organizations need variation in what people do, think about, and produce. What might be called errors and mutations in a system meant to do old things in old ways are the lifeblood of innovation. People need to constantly find and produce new ideas, which, like mutations in plants and animals, often fail to endure and spread. The notion that diversity, new combinations, and mutations of existing forms are required for creating new forms is, of course, inspired by Darwin's theory of evolution. The biologist Stephen Jay Gould explains why amplifying, rather than dampening, variation leads to excellence in social systems, not just biological systems.

Excellence is a range of differences, not a spot. Each location on the range can be occupied by an excellent or an inadequate representative -- and we must struggle for excellence at each one of these varied locations. In a society driven, often unconsciously, to impose a uniform mediocrity upon a former richness of excellences...an understanding and defense of full ranges as natural reality might help stem the tide and preserve the rich raw material of any evolving system: Variation itself.

Hundreds of behavioral scientists have borrowed and modified Darwin's theory of evolution. One of the most robust findings in this vast literature is that variance in people, knowledge, activities, and organizational structures is crucial to creativity and innovation. Research by Dean Keith Simonton shows that the success of individual geniuses like Mozart, Shakespeare, Picasso, Einstein, and Darwin himself, is best understood from an evolutionary perspective, where excellence results from "a range of differences." These famous creators generated a wider range of ideas and completed more products than their contemporaries. They didn't succeed at a higher rate than others. They simply did more. So they had both more successes and more failures. There are renowned geniuses who defy this trend, but they usually have less impact than their more productive counterparts. The great artist Vermeer created fewer than 50 paintings in his lifetime, all in a similar style. He achieved a singular excellence that, despite the stunning beauty of his art, adds something less than Picasso's astonishing range and history-changing influence.

Research on groups and organizations suggests that variation is just as important to collective creativity. New ideas are generated when groups and organizations have people who act and think in diverse ways, express diverse opinions, are connected to diverse knowledge networks outside the organization, and store and constantly make use of diverse technical knowledge. The belief that innovation depends on a broad palette of ideas was around long before academics started studying innovation. Thomas Edison remarked that inventors need "a pile of junk." His West Orange laboratory had a "well-stocked storeroom and a collection of apparatus and equipment left over from previous experiments" that included "machine tools, chemicals, electrical equipment, loads of supplies -- not only lengths of steel and pipe, but rare and exotic materials such as seahorse teeth and cow hair." This "big scrap heap" provided the raw materials that Edison and his staff used to invent new things.

An evolutionary perspective means that variation is essential because, to find a few ideas that work, you need to try a lot that don't. This is why scientific research mostly consists of trying things that fail. As Susan Greenfield, a renowned British neuroscientist, put it, "Safe is a word that goes much better with sex than science." A similar philosophy helps explain the success of Capital One, which has been called the the most innovative credit-card company in the world. Just a few years ago, all credit cards were pretty much the same; you could have whatever you wanted as long it cost $20 per year and had an interest rate of 19.8 percent! Capital One has been the leader in offering thousands of different credit cards, with varying rates, and limits, which are targeted at people with different beliefs, hobbies, and affiliations: "They tinkered with credit li...

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