Latest / The Innovation Show / How to Get Leadership to Back Your Idea Robert Burgelman on Intel

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How to Get Leadership to Back Your Idea Robert Burgelman on Intel · The Innovation Show

• 0:00
  New businesses have growth problems that top management does not easily understand.
• 0:06
  So if you don't have a clear strategy, you only ask them what you know
• 0:13
  they will be able to understand.
• 0:16
  But then you are always behind, and that will destroy your credibility." It took--
• 0:22
  You know, I knew at the time that this was a truly outstanding insight, profound.
• 0:28
  But, you know, I didn't really leverage it as much.
• 0:31
  Then my co-author Chanda came along and said, "Hey, you know, we could use Jim
• 0:38
  March's model of exploration, exploitation to deal with some of these findings
• 0:45
  that you had at Intel", suddenly said, "Yeah, and it's actually not just Intel.
• 0:50
  It's what I learned forty-five year… almost fifty, fifty years ago, believe
• 0:55
  it or not, when I started my research on internal venturing from, from that that I
• 1:02
  always remembered but had not yet really found a way to actually exploit myself."
• 1:09
  So that is basically the story of this.
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  so in the retrospect, this is always clear, but it is not at the time
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  that you have to make the decisions.
• 1:18
  people always talk about culture, right?
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  This and culture that.
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  So I say, "You know how I know what the real culture of a company is? things. Who
• 1:28
  gets the money and who gets promoted."
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  If I know those two things, I, I know a lot in spite of all the words and
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  all the stuff that they write on the… Those who engage in autonomous strategic
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  behavior, they have the burden of proof.
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  The burden of proof is not on the rest of the organization.
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  The best indicator is of autonomous initiatives is the parking lot on
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  Friday nights and Saturday mornings."
• 2:01
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  smarter decisions, faster innovation, and a lasting competitive edge.
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  You can find many of the guests that have been on the Innovation Show, and
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  future guests like Linda Hill, for example, who have written fantastic
• 2:29
  papers at the Kyndryl Institute.
• 2:31
  You can find that at KYNDRYL.com/institute we are taught that new projects
• 2:38
  should fit the company strategy.
• 2:41
  today's guest studies what happens when they don't.
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  In the 1980s, Intel made memory chips.
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  A small team started working on something else, a microprocessor.
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  Nobody at the top asked for it, but that side project became the whole company.
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  Later, another Intel team built a different kind of processor.
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  It worked well, but the then CEO, Andy Grove, shut the project down.
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  Why did he back the first one but stop the second?
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  Grove said, "I weed out all the weeds, but also some of the potential seeds."
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  He said it while explaining why he never backed Intel's networking business.
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  Today's guest wants to know how a leader tells a weed from a seed.
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  His answer is simple.
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  , Leaders keep backing a project when it teaches the company something new.
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  The first team did that.
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  The second team built something good, but it just didn't teach
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  Intel much it didn't already know.
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  It is a pleasure to welcome back from Stanford Graduate School of Business,
• 3:45
  still lecturing in mid-season at the moment, it was great to get time with
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  him, author of Strategy is Destiny, I have it here somewhere as well,
• 3:55
  Corporate Innovation, there it is, and many other titles, including this
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  brand-new paper we're gonna cover today.
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  Robert Burgelman, welcome to the show.
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  Thank you very much, Aidan.
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  It's always great to be with you.
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  fantastic to have you with us, Robert.
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  I, I really wanted our, our audience to get their heads around this
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  project because one of the things , I thought when I was reading it at
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  the start was like going, but the way you get a project through is
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  you try and align it with strategy.
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  And in my head, I was like going, but these guys failed because they aligned
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  it and it was too incremental in a way.
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  And I was like going, but in some companies that works.
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  And it, it kind of straightaway made me go, "I have to talk to Robert and
• 4:40
  understand this a little bit more." So maybe we'll give context of this paper
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  and what you've done, and then actually I'd love to just define a couple of terms.
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  We've covered these terms before on the show, but we'll have people who haven't
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  heard those episodes we did b- before.
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  So we'll cover some of the literature and some of the texts that are in
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  the book, and some of the, your definitions that you coined as well.
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  But let's start with that idea of do I align it with strategy, do I not?
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  Is that what it, we're talking about here at all?
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  Very good.
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  Aidan, I can do that.
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  So, and I have indeed in the paper, I have three events.
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  One is the transformation of Intel, as you mentioned, from semiconductor memory
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  company to microprocessors company, and I will… That worked well for Intel and
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  I will explain that a little bit again.
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  The second one has to do with actually, a well, at Intel, an engineer developing an
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  alternative microprocessor architecture which that engineer believed was going
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  to be the future for microprocessors, and in some ways, much later it became
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  because that that architecture, which is called reduced instruction set
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  computing, became the one that is used by ARM, and to the extent that
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  there is that there was at the edge of computing, the, so the f- the mobile
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  devices and so forth that architecture became actually very important.
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  So Intel, in some ways, missed on that.
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  and but the-- I will explain why that actually happened at the time that the
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  decisions had to be made, where you don't know yet what the future will be.
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  and then the third one indeed is Intel was already in the networking business, and
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  that is where actually the knowledge that was being generated to s- support that
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  new business within Intel on a continued and more extensive basis was ambiguous.
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  And Andy Grove did not like ambiguity very much, so I will explain that as well.
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  maybe what I should say to start is in, in the paper, … So years ago, when I
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  did my work on internal venturing, which is represented in that book that you
• 7:00
  were so kind to show, Inside Corporate Innovation, had actually , the privilege
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  of getting to know a senior executive who was deeply involved in , the new ventures
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  in that science-based chemical company.
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  It was not Intel.
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  It was Industage, one of the large chemical companies.
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  he said something, I'm going to read this from my article because the statement has
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  to be carefully, ca- carefully formulated.
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  It's… So this person said this.
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  "New businesses have growth problems that top management does not easily understand.
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  So if you don't have a clear strategy, you only ask them what you know they
• 7:44
  will be able to understand. But then you are always behind, and that will
• 7:50
  destroy your credibility." It took-- You know, I knew at the time that this was
• 7:55
  a truly outstanding insight, profound.
• 7:59
  But, you know, I didn't really leverage it as much.
• 8:03
  Then my co-author Chanda came along and said, "Hey, you know, we could use Jim
• 8:10
  March's model of exploration, exploitation to deal with some of these findings
• 8:16
  that you had at Intel", suddenly said, "Yeah, and it's actually not just Intel.
• 8:22
  It's what I learned forty-five year… almost fifty, fifty years ago, believe
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  it or not, when I started my research on internal venturing from, from that that I
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  always remembered but had not yet really found a way to actually exploit myself."
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  So that is basically the story of this.
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  on your point about the, you'll have an insight inside the company that leadership
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  doesn't understand, usually what, what I see, and many of the listeners
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  to this show, they've developed some skill, or maybe they're neurodiverse,
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  or maybe they're just hobbyists who read stuff or listen to shows like
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  this, and they develop a new set of lenses, and they see things clearly.
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  I've… This is what happened to me.
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  I, I started in 2008 working in an organization, and I was reading
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  Clayton Christensen's work back then, and it gave me a set of lenses, and
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  I, I assumed everybody knew this.
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  So, I was looking at things and I was like going, "Like, why can't you guys see
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  this?" I wasn't saying those things, but I was getting very frustrated, and actually
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  inspired me to do the show because I wanted to help people like me understand
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  that they just don't have the same lenses.
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  So they actually don't see what you see, and they probably don't have the
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  time luxury because they're so focused on exploitation that they don't even
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  have any bandwidth for exploration.
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  So they're like, "We're trying to keep the company going. We're trying
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  to keep your wages paid, and you're coming to us with these crazy ideas."
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  Like, that, that for me is the, what it looks like inside an organization.
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  Maybe you have some thoughts on that before… I just wanted to give some
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  definitions in the moment as well.
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  Absolutely.
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  This actually, this brings me back to even an earlier event.
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  So when I was working so long ago, I became aware of Henry Kissinger's
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  a- analysis in his first book.
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  I forget now the exact title, but the, but it was about time
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  in the Nixon ad- administration.
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  And one statement that I found
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  from Kissinger, I even quoted it in my earlier article in the in the Academy
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  of Management Review, he said, "When the president comes into office, he
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  has already a strategy, and that's the strategy that he is going to have
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  to work with." So the implication is that it- it's virtually impossible for
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  the President of the United States to change or to s- to, to get too much
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  involved with everybody, with people who want to change the strategy.
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  Not because he is not smart enough, but simply there is no time, and so
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  I thought that insight from Kissinger was really very consistent with what I
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  had been seeing in my own research in this l- large chemical science-based
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  chemical… I mean, these were smart.
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  These were all PhD. This was not a question of an IQ.
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  So that ma- that makes it interesting because you don't learn very
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  much from somebody who is not particularly smart doing something
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  that's not particularly smart.
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  No, these are ex- exceedingly smart people, but they are,
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  their lenses are basically given.
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  That's a very nice way.
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  I, I call that, way, the cognitive rules, and the cognitive rules are the beliefs
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  that these leaders have about what the key success factors are and have been.
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  And of course, they will try to project in the future, what they How these
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  cognitive rules may change, but it's very difficult for them to do that.
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  And I'll give one example of that, also an Intel example.
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  So when Andy Grove, which is not one of the three, but when An- Andy Grove,
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  as a result I think of talking to J- S- Steve Jobs in the early '90s, came to the
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  conclusion that video conferencing on the PC would be a very big, w- very big thing.
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  This was around 1993, right?
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  Way before we did this.
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  But he-- he to- he was so strongly believing that this was g- going to be
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  the future, that he took Pat Gelsinger, who was who was shortly CEO a few
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  years ago, was the leading person in, on the processor development, a
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  technical guy, brilliant technologist.
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  He took him out of, of semiconductor, development, and he put him in
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  charge of what was called ProShare.
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  ProShare was for video conferencing on the PC.
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  In my book actually, in, in the chapter nine I spoke a lot
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  at the time with Gelsinger.
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  He was explaining to me Andy told him.
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  He, would say, "Look you know, the- there is niches for this product, in healthcare,
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  mortgage lending, and so forth." But Andy Grove did not want ni-- a niche strategy.
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  Andy Grove wanted a frontal assault on the PC industry and everybody, all the OEM
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  should adopt this, this new application.
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  It didn't work.
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  Later, this is what I told my class that we were st- teach at Stanford, that which
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  again shows the brilliance of Grove.
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  He knew his own weaknesses and willing to He said, "Look, spent
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  $750 million on something that never was more than about $30 million.
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  Why did we do that?" We said, "Well, we used the landing in Normandy
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  approach." Which is the frontal assault.
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  that's what Intel had successfully done with the 386, with
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  the 486, with the Pentium.
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  These were all the f- f- the enormous power behind, force
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  behind this processor development.
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  And he was tr- trying to therefore… So what is the lesson?
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  lesson is even if a, if a
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  accepts a new idea as important, great likelihood is that h- he will want to
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  use the same strategy that actually made him successful in the businesses
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  in which he is already successful.
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  People later told me also, you know, when they tried to go, when they, when,
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  when Intel tried to go into mobile communications, where they spent $10
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  billion, they told me, "Well, you know, the ecosystem in the, in the mobile
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  communications industry is very different from the ecosystem in the PC industry.
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  So if you try to use the same rules of engagement that's made you successful
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  in the PC industry, in the mobile communications industry, are unlikely to,
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  to succeed." that brings me to… You had Clark Gilbert in your, in, in speaking.
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  And I think I mentioned in one of our sessions that we did together that
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  I may be wrong but Clark, I thought, at, in my terminology, had found
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  something really important, was that it, when the newspapers were g- getting
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  confronted with y- for those who develop, who defined it as an opportunity, think
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  he-- what he found was, well, you guys can develop the strategy as you see
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  fit, but they give him no resources If they define it as a threat, they
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  go, "Oh my God, we must put a lot of resources," but the same strategy, right?
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  And so in some ways, Andy was doing the same thing with ProShare in 1993,
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  using the extraordinarily successful frontal assault strategy of Intel
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  And say, "We can do that with video conferencing, too." problem was not
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  really, because for instance, for video conferencing, you need broadband.
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  Broadband is controlled by the telecommunications companies.
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  I almost spent $2,000 on, on, on putting in my garden the first
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  of sort of broadband, which I forget the exact acronym for it.
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  And so again, I think that is why Kissinger's insight was powerful.
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  the time the CEO gets to in a position, he or she knows what has
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  worked, they really don't have much time or to fundamentally change that.
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  And so therefore, I think you, w- if we want to do an analysis of
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  these things, you have to take a long-term perspective, because for
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  instance, in the case of RISC, right?
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  At the time that Intel was developing this, know, there, there was actually
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  a… I'm jumping now to that thing.
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  There actually, w- you know what they said at the, at, in, at, at, at Intel?
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  They called it a YARP.
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  Y.A.R.P. Because yet another RISC processor, meaning everybody in
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  the world has a RISC processor.
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  Why should we do it?
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  so in the retrospect, this is always clear, but it is not at the time
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  that you have to make the decisions.
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  I was telling you, I, write a weekly article, and this paper was so timely
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  because I was writing about this idea.
• 17:45
  There was a brilliant guest I had on the show from Denmark, a guy called
• 17:48
  Rasmus Ankersen, and he set up the football academy for Denmark, and he
• 17:54
  was one of the founding members of that.
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  But there was a player, and I think he was 15 at the time, and they had a certain
• 18:02
  amount of spots in this academy, but there was one free And they didn't wanna
• 18:07
  give to this kid, 'cause they asked all the experts, "Who thinks this kid will
• 18:12
  make it?" And they're like, "Oh, no, he doesn't really have a future in football."
• 18:15
  But one person goes, "But his dad is a really good kit man, and we
• 18:19
  need to keep the dad on our side.
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  So we'll let this kid into the academy, but he has to pay his own way, so
• 18:26
  the dad has to pay for this kid." The kid then gets sold for, like, three
• 18:30
  and a half million to, like, one of the top Italian clubs, I think it
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  was, and then he goes on to be the captain of Denmark, one of the most
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  successful Danish players of all time.
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  And what had happened was one of his colleagues asked them to the, the top guys
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  to put their top players into an envelope, and he would look at that envelope
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  years later, and he pulled them out.
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  And this guy, Rasmus, he tells this in his book called The Gold Mine Effect.
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  He's like, "The guy I picked," he said, "he now works in a pizza parlor.
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  He owns it, but he works in a pizza parlor." And he goes, "That's
• 19:04
  the guy I was saying." And this guy goes on to be so amazing.
• 19:07
  And there's a quote, and it's attributed to Buckminster Fuller.
• 19:11
  It's not entirely correct, but it's, but M- but what Buckminster
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  Fuller said, "There's nothing in a caterpillar that tells you it's
• 19:18
  gonna be a butterfly," essentially.
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  That's the kind of paraphrase of it.
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  But he, what he says is, like, when, when you freeze frame on something like
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  a caterpillar in a moment in time, it doesn't turn out that way in the future.
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  And I say all that to say, this is exactly what Andy Grove admitted, was
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  like, "I will pick w- weeds out of the garden, but in doing so, sometimes
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  I'll throw away some seeds as well."
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  And it's incredibly different because, as you say, through the
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  rear view mirror, it all makes sense, and we can look at those people.
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  And the old me, before I read all this literature, would be
• 19:53
  like, "Oh, those idiots." Right.
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  "How do they not see it?" But, like, you don't understand the pressure
• 20:00
  people are under, the lack of lenses they have, the way they see the world,
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  the, the bias you refer to there, the hot hand fallacy, that they've had
• 20:08
  success in a field and they think they can just use the same formula again.
• 20:13
  Clark Gilbert's stuff about threat rigidity.
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  I think it's resource rigidity, threat rigidity, all those things.
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  You put them into a mixing bowl, and this is incredibly difficult.
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  And I always find it funny that Andy c- Andy lectured i- on, on your course,
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  and even though he lectured about this stuff, he still suffered from those biases
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  and was open about those biases too.
• 20:35
  So this is why I'm so happy to have you on the show.
• 20:38
  But I thought we'd just refresh a couple of lenses for people.
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  The first is your term, autonomous strategic behavior, and many
• 20:48
  of our audience, Robert, are not native English speakers.
• 20:51
  It's their second language, but they listen in English.
• 20:54
  And I thought maybe when you say strategic, autonomous strategic behavior
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  What does it look like in a company?
• 21:01
  So say they're walking down the halls and they're, and they're going,
• 21:03
  "Okay, I wanna spot it in, in the field." What does it look like?
• 21:09
  Yes.
• 21:09
  So the way that I-- that-- So actually, I think the, the, the best way to,
• 21:14
  to, to describe, to-- is with an example, is to s- is to say this.
• 21:18
  So at any moment in time, the companies do have what I would call a strategy.
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  It can be more or less explicit, and that strategy basically encompasses
• 21:30
  the product market segments in which they are operating, right?
• 21:36
  And so there is companies that have multiple product market segments, right?
• 21:40
  They are more diversified, if you want.
• 21:43
  And there are those who have fairly narrow if you want, set of, of
• 21:50
  competencies.
• 21:50
  Autonomous strategic b-- And so the idea really is to get leaders deeper in the
• 21:58
  organization to take actions that will make those, that portfolio, if you want,
• 22:05
  of product market segments successful.
• 22:09
  Right?
• 22:11
  Right.
• 22:11
  So that is you b- And in fact, you know, to a large extent, I sometimes
• 22:16
  say strategy is, in first instance, a disciplining mechanism, right?
• 22:21
  So, and, and y- you, you-- I-- and I can sort of make that concrete by saying,
• 22:26
  well, you know, people use the word focus.
• 22:29
  What does that really mean?
• 22:32
  And to my mind, focus means you say no all the time, right?
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  Someone comes up with a new idea and you go, "No, that's not. We should do
• 22:40
  this. No, because this is where we want." Andy Grove was the exponent of focus.
• 22:47
  So, but that, so that is the basically the, if you want, the mainstream of
• 22:53
  the organization at any moment in time.
• 22:56
  Try to understand the strategic planning process and so forth, all in relationship
• 23:01
  the set of product markets where we think we can continue to be successful.
• 23:08
  Right.
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  And that is of course associated also with a set of competencies that we
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  have and capabilities that help us do these, the things necessary to
• 23:19
  execute on the strategy for success in these different b- product markets.
• 23:26
  So then the-- what happens it's, it's sort of the logic of life, I think,
• 23:32
  you know, that you bring in new people younger people often with different
• 23:39
  technical skills and commercial skill, MBAs and, and, and, and, and engineers.
• 23:45
  so they w- will come up with ideas that are in relationship product market
• 23:55
  segments that sometimes are still in the ear- very early stage, they will for
• 24:02
  them s- begin to do things to develop, to define those and develop them.
• 24:09
  And I call them autonomous because they are not driven by the existing
• 24:14
  strategy that encompasses different product market segments than
• 24:19
  the ones that we want to go in.
• 24:22
  In the Intel example, for instance, the mainstream of Intel was semiconductor
• 24:27
  memories, random ac- dyna- dynamic random access memory, EPROMs, and so forth.
• 24:36
  there was a group of people that were actually working on a different
• 24:42
  type of semiconductor product for Busicom, a Japanese company that had
• 24:48
  that had, contacted Intel to develop
• 24:55
  a s- semiconductor products for their first what was going to
• 25:00
  be an electronic calculator.
• 25:03
  It was a desktop calculator, right?
• 25:06
  they b- that's outside of the, And actually, Andy one of the other senior
• 25:11
  executives once told me, "Ah, actually, we did that because we thought it
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  would help us sell more memories."
• 25:19
  Right?
• 25:20
  So they didn't realize, of course, that eventually this
• 25:23
  would become the dominant product.
• 25:25
  But-- my, my answer is I'm going to summarize my answer.
• 25:30
  Autonomous strategic behavior in the company context means that you have
• 25:36
  internally people who are beginning to try to develop products, services for
• 25:43
  product market segments that currently are not part of the official strategy.
• 25:50
  And many of those fail, but some of them become really very important.
• 25:55
  Jim March once, the o- the, the one who also developed a model
• 25:59
  on, on exploration, exploitation.
• 26:02
  I found once, years ago where he basically came up with wh-why do
• 26:07
  people do that, why would you, Aidan, want to do something that is outside
• 26:12
  of the existing corporate strategy?
• 26:15
  he gave-- came up with two really interesting logics.
• 26:18
  One he called an obligatory logic, which means you do it
• 26:21
  because of your self-image.
• 26:24
  are the kind of person, who likes to do different things.
• 26:28
  You're a very driven person, right?
• 26:31
  So that's basically an internal drive.
• 26:35
  The other one he called a consequential logic, which means,
• 26:39
  I'm so confident , that I have all these competencies and therefore I
• 26:42
  can apply them in another context.
• 26:46
  A-and, for one or another reason, I have no longer access to the
• 26:54
  same level of opportunities related to the existing product markets.
• 26:59
  Maybe I made a mistake or the, or there is just another person that And so
• 27:03
  now I'm willing to take a more risky route by trying to do something that is
• 27:08
  outside, therefore autonomous, w- if I were a person who could stay within the
• 27:18
  set defined by the existing strategy.
• 27:21
  You know, I learned something from A year ago or so, I had in my class
• 27:26
  a very famous computer professor.
• 27:29
  I won't mention his name though, but he-- And he was a CEO of a, of a, a
• 27:35
  comp- a startup company in, in previous, some, some time ago, a long time ago.
• 27:42
  But he made a distinction between what he called the A team and the B team
• 27:49
  So the A team is the ones who really all the ones who are on the fast
• 27:54
  track and they are making the money.
• 27:58
  Whereas the green team, they are outside of the mainstream and they
• 28:02
  promise to make money So, so there, there is like, so the-- That is I
• 28:08
  think the, in some ways the best way that I can, that I can describe it
• 28:12
  Oh, man, you're, you're opening some old wounds for me.
• 28:16
  I, I worked in digital media when it was a caterpillar, and everybody
• 28:23
  in the organization only cared about the butterfly, and that's
• 28:26
  where the organization made money.
• 28:28
  I mean, you could have a crappy sales guy, like who wasn't very good, but… And he
• 28:33
  was just an order taker, and they would have more authority and, and voice in the
• 28:39
  company than the people who were actually building the future of the company.
• 28:43
  And, and I think that, that contrast is so, so difficult that, that
• 28:47
  so many of us struggle from when all you're actually trying to do
• 28:51
  is what's right for the company.
• 28:52
  And Gary Hamel, your friend and your, your, your former colleague,
• 28:56
  Gary Hamel, he said, "The problem is most organizations are not run
• 29:01
  by entrepreneurs or explorers.
• 29:03
  They're run by exploiters." And in there, we miss so many ideas.
• 29:07
  And again, back to the lenses.
• 29:09
  They have developed lenses.
• 29:10
  Those lenses have been successful, and now you need new lenses.
• 29:14
  And sometimes, as you talk about in some of your future papers, the
• 29:19
  organization doesn't even have those anymore, so they they lose out.
• 29:22
  But I, I mentioned the contrast, Robert, and when, when you talk about autonom-
• 29:29
  autonomous strategic behavior, we talked about that chip story and how the chip
• 29:34
  story came autonomously from the middle, where there was a rule across the
• 29:39
  organization of how they measured revenue, essentially, and they were, like, kind
• 29:44
  of going, "It makes sense to go here."
• 29:46
  But it took the… As Andy says in one of the lectures in your course, he said,
• 29:50
  "It took years for us to actually admit that was the strategy," or actually
• 29:54
  not even admit it, realize it was the strategy because the guys in the middle
• 29:58
  of the organization had made the call.
• 30:00
  But I, I mentioned in the intro the contrasting story, the case where
• 30:05
  people did this, and it was the wrong call or decided the wrong call, and you
• 30:10
  mentioned this about risk, RISC, and you mentioned , the term of what that is.
• 30:15
  And I'd love you to either share that example or another one that
• 30:19
  you've seen recently, one where the organization made the call and
• 30:23
  pulled the seed rather than the weed
• 30:26
  Yeah.
• 30:26
  So let me speak first to the, where you started.
• 30:29
  So because that's a, there is a very interesting aspect to the,
• 30:33
  how Intel transformed itself from a semiconductor memory company
• 30:37
  to a to a microprocessor company.
• 30:40
  That has deep roots, and it took me a while to, to really fully understand that.
• 30:45
  So what-- They had this, they had a resource allocation rule
• 30:53
  For fab capacity.
• 30:54
  Who gets at the margin if, like, you have different businesses, and if we,
• 31:00
  if the, if the capacity is constrained, we must actually decide who gets the
• 31:05
  inc- the last increment of capacity.
• 31:09
  Intel actually had developed a rule was called you-- the, the products that
• 31:17
  have the highest margin, difference between price and cost, get the capacity.
• 31:26
  Now, happens?
• 31:28
  Memory products become commodities.
• 31:32
  Commodities, margins go down, right?
• 31:35
  'Cause there's a lot of competition.
• 31:38
  The microprocessors was a specialty product, so that was a product for in, in
• 31:45
  different markets where there was actually in the beginning there were multiple--
• 31:48
  It was not a PC in the beginning.
• 31:49
  There were multiple market segments in which these microprocessors were
• 31:54
  sold a-as, as specialty products, and so they had high margins.
• 31:58
  So when the product planners and the finance people, middle-level
• 32:03
  executives, were deciding who gets the
• 32:09
  the last increment of capacity, it was the pe- the logic people who got it because
• 32:17
  of the mar-- of the allocation rule.
• 32:19
  Now, in the first round, the memory people say, "Okay, this time we lose,
• 32:25
  but we're going to change this and next time we will try to bump the curve
• 32:29
  upward again." But that did not happen.
• 32:31
  In four generations of DRAM products, each time the guys in, in that were
• 32:40
  doing the m-memory products, they lost against the logic products.
• 32:44
  So over time, the fab capacity and the revenue actually of the microproces- of
• 32:51
  the semiconductor memory guys is going down, and the fab capacity allocated to
• 32:58
  logic and the revenues of logic go up.
• 33:03
  So-- And at one point, they cross, and yet, yet it still took two years,
• 33:07
  two or three years before, as you just said, Andy Grove said, to the mainstream
• 33:13
  of-- the new mainstream of Intel."
• 33:14
  But why did this happen?
• 33:15
  Well, because while the middle and
• 33:22
  Product plan-- middle-level product planners and finance
• 33:25
  people used the rule that Intel had established for allocating capacity.
• 33:31
  They did that, the R&D resource allocation was still done by top management.
• 33:39
  And the problem was that the best technologists what is called technology,
• 33:47
  which really had to do with line width reduction on these semiconductor
• 33:53
  that was still with the DRAM people.
• 33:58
  the best technologists for reduce-- for the line width reduction, so
• 34:02
  making the chips smaller, which is very important because if the
• 34:05
  chip is smaller, the chances of it being hit by an impurity are lower.
• 34:11
  So that means the yields are higher, and since the s- the circuits are
• 34:16
  closer together, the performance is higher because the electrons
• 34:19
  have to travel shorter distance.
• 34:21
  So now you have the-- this, th-this problem that the top management is still,
• 34:26
  for good reasons, allocating R&D equally to the losing the losing product while
• 34:35
  the, while the m- middle-level managers are ac- allocating capacity away from.
• 34:40
  And at some point, in the beginning, that difference was small.
• 34:43
  And the, and the m-memory guys go, "Oh, next time we will r- we
• 34:46
  will regain," but they didn't.
• 34:48
  So by, by 1982, '83, difference between what top management was doing and,
• 34:54
  and the and what the middle and senior executives were doing was a huge gap.
• 35:00
  So now you ask the question, this is what took me a while to figure out.
• 35:06
  That rule they had established of maximize margin per wafer start, huh,
• 35:14
  difference between price in the market and cost, that is really the rule
• 35:19
  that we use to allocate fab capacity.
• 35:21
  What does that mean?
• 35:25
  That took me a while to figure out.
• 35:26
  Then I realized that is a rule that you would impose if you thought about yourself
• 35:33
  as a leading-edge technology company.
• 35:38
  Your cul- our culture is to be in leading-edge products.
• 35:42
  How do we know that we have leading-edge products?
• 35:45
  By getting high margins, because that's the, the market is willing to pay a high
• 35:50
  price over and above what it cost us.
• 35:53
  Whereas in the, in the, in the commodity business, it's a small
• 35:57
  margin because there is competition.
• 35:59
  So suddenly, it, it, it … I realized that that rule was the best
• 36:06
  indicator that you could get of what Intel's culture deeply really was.
• 36:13
  a, and continued to be, a leading-edge technology company, which measures
• 36:22
  that by what is the margin that we can get to our products in the market.
• 36:27
  It's one reason, by the way, Intel missed out on the Apple chip for the iPhone.
• 36:35
  Because the finance guys Otellini was then the CEO.
• 36:40
  people within Intel, they calculated that the margins on these on these
• 36:47
  chips for the going to be lower the margins that they get in the PC, and
• 36:55
  therefore it would bring down our average margins, and that would get reflected
• 36:59
  in the share price of the company.
• 37:02
  They, of course, did not realize the enormous volumes that the chips
• 37:09
  for the of the iPhone w- w- w- was, w- w- w- was going to have.
• 37:15
  I, I n- if I might say so, I think that is actually an incredibly
• 37:19
  powerful point because that le- led me to re- to realize that if Y- people
• 37:26
  always talk about culture, right?
• 37:29
  This and culture that.
• 37:30
  So I say, "You know how I know what the real culture of a company is? things. Who
• 37:36
  gets the money and who gets promoted."
• 37:41
  If I know those two things, I, I know a lot about the culture of the organization
• 37:47
  , in spite of all the words and all the stuff that they write on the…
• 37:51
  who gets punished, who gets promoted.
• 37:54
  Punished, and actually, I wrote about this, I think you saw before,
• 37:58
  punished for doing the right thing.
• 38:00
  Like, that, that's… and there's nothing worse.
• 38:02
  I don't know what philosopher said it, but he said, "If you really wanna punish
• 38:05
  somebody, don't punish them when they think they've done something wrong.
• 38:08
  Punish them when they think they've done something right." That's the
• 38:11
  worst punishment, and that's what it feels like when you've done something
• 38:15
  that is right for the company, and you get reprimanded or given out to.
• 38:20
  And a lot of this comes from autonomy.
• 38:23
  And a couple of things I pulled.
• 38:25
  You, you beat me to it with that quote from the leader that you read earlier
• 38:30
  on, but one of the ideas I felt mattered very much for this audience, the audience
• 38:35
  of the show, is you suggest that leaders can turn autonomy up or down as a test,
• 38:41
  and if they turn it on and results change, the team has built something new.
• 38:46
  But how could a, a leadership team actually do that?
• 38:50
  You, you know, there's the famous story about Andy Turn- and Gordon
• 38:54
  Moore, the former CEO and co-founder of Intel as well, turning and going,
• 39:00
  "You know what? If we were gonna start this again, what would we do?"
• 39:03
  And they leave the room, they come back in, and they do it.
• 39:05
  But how would you do that inside an organization?
• 39:09
  And what would it look like to start that process?
• 39:13
  And how could the autonomous innovators inside the organizations
• 39:18
  actually nudge those behaviors if they possibly can at all?
• 39:22
  So in, in the little model that I have, which actually f- that was first how
• 39:28
  I how I tried to extend Bower's model.
• 39:32
  But… And then in my blue and green model that I think you have also.
• 39:37
  I have this idea of what I call strategic context determination.
• 39:43
  Right.
• 39:44
  It's box number five in my framework.
• 39:47
  What does that mean?
• 39:50
  That means that that's the battleground where
• 39:55
  the ones who have come up with new ideas and have already developed some facts and
• 40:00
  some that it can actually work, now are trying to convince top management and the
• 40:08
  other, the rest of the organization that we should amend the corporate strategy.
• 40:15
  So that is-- And, and so that's a battleground because there, in a,
• 40:19
  in a way, you do have now the, the question of resource allocation again.
• 40:27
  The people who are in the blue process, in the mainstream, they go, "Why should
• 40:31
  we-- Why should you take money away from me to give wh-where we cert- where,
• 40:36
  where we are certain about the returns to something that is new and we're not
• 40:40
  certain about the returns?" It's a very reasonable… So therefore, h-here is
• 40:45
  the, the point which I will, I, I'll make.
• 40:49
  Those who engage in autonomous strategic behavior, they have the burden of proof.
• 40:55
  The burden of proof is not on the rest of the organization.
• 41:00
  So therefore, the persons who are involved in the autonomous initiatives
• 41:07
  when they try to activate that process where we then discuss, know.
• 41:13
  Remember Andy Grove the networking business.
• 41:18
  Now, I, I talk about that third, the ambiguous situation.
• 41:21
  Remember that?
• 41:23
  So he said, "I don't li…" This is the CEO who is now involved in a management
• 41:32
  senior management review committee meeting, which is the-- we try to
• 41:36
  now determine the strategic context.
• 41:38
  And Frank, the guy who was running the, the network, has
• 41:42
  to make a presentation, right?
• 41:45
  That's, that's the battleground.
• 41:47
  You, Aidan, are now going to be in front of the five or six of the top executives
• 41:53
  of the company, and you are trying to make the case that while, you know, we
• 41:57
  could use these resources in the, in the, in the mainstream, we should take
• 42:02
  some of them away, and give them to you.
• 42:06
  And remember what Andy Grove said.
• 42:08
  He said, "I don't like statements that are somewhat right but mostly wrong."
• 42:16
  It's an incredible statement.
• 42:19
  And everybody who is an autonom-- And you see, that links back to
• 42:24
  remember now why I started this.
• 42:26
  I, I'll read my-- Well, I, I read my statement again.
• 42:30
  It took me 40, more than 40 years, right?
• 42:34
  New businesses have growth problems that top management does not easily understand.
• 42:40
  So if you don't have a clear strategy, you only ask them what you know
• 42:45
  they will be able to understand.
• 42:48
  But then you are always behind, and that will destroy your credibility.
• 42:53
  It's-- That's precisely what Grove was… Let me tell me, he could not convince me
• 42:58
  because he did not have a clear strat-- But-- And the later guy had because-- But
• 43:04
  too late because the successor, in fact, it was Frank who explained that to me.
• 43:08
  It was not the other guy I spoke to too, but he, he said, "Yeah, the other,
• 43:13
  the new guy, he told Intel, he's… And he told them, Big processors
• 43:21
  need big pipes because the big processors, they process the data,
• 43:27
  but the data comes through the pipes.
• 43:29
  So if the, if somebody else controls the pipes, we have less strategic control
• 43:36
  than we had the, the pipes ourselves.
• 43:40
  So we should be in the pipe business, too." And they tried, but too late.
• 43:44
  They bought number three or some- by the time Cisco was all, Do, do you see?
• 43:49
  So that's the box.
• 43:52
  That's the battlefield where the people that have the new ideas must be able
• 43:58
  to convince their peers and eventually the CEO, who has not said yes or no.
• 44:05
  And you see, some people think that that's very reactive.
• 44:08
  And I go, "No, that's brilliant." Because the CEO knows at one point he,
• 44:13
  he or she will have to say yes or no.
• 44:15
  Andy, Andy Grove called it moving people from maybe to yes or no.
• 44:21
  One optional thing to just bring up that dawned on me.
• 44:25
  So I mentioned about Andy Grove and the Weeds and the Seeds, and he famously
• 44:30
  said, and you quote him in Strategy Is Destiny, that, "Not all paradigm shifts
• 44:35
  are paradigm shifts." I love that because i- in there is the real challenge.
• 44:41
  That's why I was talking about Rasmus Ankersen earlier on.
• 44:43
  It's, it's so difficult to see potential.
• 44:46
  So many things in our lives, stocks, people who turn out to be incredibly
• 44:51
  gifted athletes or artists or professors, people don't see it in the instance,
• 44:57
  and they go, "That guy Bergman?
• 44:58
  What?
• 44:59
  He's had a career?
• 45:00
  He's a… What?
• 45:00
  I was in school with the guy." Yeah.
• 45:03
  I, I was, I was told in school, my parents were told that I should
• 45:08
  get a different teacher because the, one of my teachers said that I
• 45:11
  wasn't very articulate and maybe I should get, I get elocution lessons.
• 45:15
  But I just think it's so difficult to see the work somebody puts in, the,
• 45:23
  the effort, the shifts in technology that enabled some of these ideas,
• 45:28
  that, that is actually the reason why they actually move in the first place.
• 45:31
  Maybe it's noth- nothing to do with the idea.
• 45:33
  But also then what you said, I think, is so important, that so many people who work
• 45:38
  in innovation, they think oftentimes, by the way, I'm, I'm poo-pooing it or perhaps
• 45:44
  discouraging them from doing the role.
• 45:46
  I just wish I knew all of this stuff when I worked as a head of innovation
• 45:51
  because it was one of the reasons I went after learning lenses and
• 45:55
  understanding and being able to articulate, because it is the only way
• 45:59
  to actually get leadership to learn.
• 46:01
  And then on top of that, stuff like, you know, threat rigidity, resource rigidity,
• 46:06
  you can reframe things and kinda go, "If we don't do this, we're screwed.
• 46:11
  If we do do this, we have a huge opportunity." And you, and
• 46:14
  you learn to know who you're speaking to and their style.
• 46:18
  But the role is basically a poli- you're in politics.
• 46:22
  It's not, it's barely innovation.
• 46:24
  Innovation's, like, the fun part, but 90% of it's politics, and I think it,
• 46:29
  it's why it's incredibly important.
• 46:31
  So there's two things there.
• 46:32
  There's that aspect of the role, the being essentially a translator,
• 46:37
  and then the, the idea of how do you spot the paradigm shift?
• 46:42
  How do you know what's a, just a, a weak signal and what's
• 46:47
  actually a strong signal?
• 46:49
  And, even a brilliant person like Andy Grove and all the success he
• 46:52
  had still got it wrong sometimes
• 46:56
  Yes.
• 46:56
  So I'm, I'm, I'm going to give, I'm going to make two points that,
• 47:00
  they that perhaps may be helpful.
• 47:03
  So I will, I will s- start with the, the f- the first point that I will
• 47:07
  make, is how do you get… And then the second one has to do with how do you
• 47:11
  know the, what are the signal strength?
• 47:14
  So if I not answer the second one, bring it because I have an answer for
• 47:18
  that, also something that I learned from observing Andy Grove, and I'll, I'll
• 47:22
  tell the, I'll give the example of that.
• 47:25
  But so I did a study of which I wrote a big chapter for a for ano- a book about
• 47:32
  how Nike went into the women's business.
• 47:38
  Now you, now you everybody t- but that was not obvious.
• 47:41
  Nike was not a women's business.
• 47:44
  Nike was the, you know, the male athlete business.
• 47:51
  And so this lady, I won't mention her name now, but, but, you
• 47:55
  know, the, the chapter exists.
• 47:56
  I would even be happy to send it to you because I wrote it for a friend of mine
• 47:59
  who brought out a book about innovation and the role of middle managers in it.
• 48:05
  So she… What she did was, one of the things that she did was
• 48:09
  she developed a people map And the people map listed basically three
• 48:16
  categories of senior executives.
• 48:21
  Those that she thought would be supportive the woman's business,
• 48:26
  because that would be a m- that's now a multibillion-dollar business.
• 48:31
  Then she … The ones who would potentially be enemies of And
• 48:37
  then the group in the middle who probably, you know, they, they
• 48:40
  just wait and see what happens.
• 48:43
  And I thought that's a very brilliant st- strategic approach to trying to
• 48:48
  understand the human polit- cognitive political context in which you are
• 48:55
  going to have to make the case for what you are tr- tr- trying to do.
• 48:59
  So that's one thing, right?
• 49:01
  So, and I think that's why I said the you know, f- for instance, I'll
• 49:05
  give another example very quickly.
• 49:09
  Technologies.
• 49:10
  Actually, I wrote a case studies about it.
• 49:12
  and I, I'd be happy to send one of those cases as well because … So
• 49:17
  Infosys Consulting was a group of people that had b- become a whole, a
• 49:24
  wholly-owned subsidiary of Technologies, the huge, it Indian technology company.
• 49:33
  And they were operating here.
• 49:35
  Th- so the, the the
• 49:38
  Infosys does basically routine, mostly routine, almost commoditized
• 49:44
  you know, outsourcing of, of right?
• 49:49
  Now, they created a th- this were Actually, I know the, the two
• 49:54
  entrepreneurial guys within Infosys created a Infosys Consulting,
• 49:59
  high-end consulting group in, here in the Silicon Valley.
• 50:03
  They grew it from zero to about $800 million.
• 50:07
  Not bad.
• 50:09
  Now, At some point, the Infosys Technology guys in India, they decided
• 50:16
  we're going to integrate the Infosys Consulting into the mainstream of-
• 50:25
  Infosys.
• 50:26
  Now, happens, which it did, course then the guys, the high-end guys now
• 50:34
  have to live in the operating model of the Indian technology company.
• 50:39
  For what, for instance, what the operating model in the, in the in the
• 50:43
  Infosys technology, if you wanted to travel, you needed two signatures.
• 50:48
  You could never travel business class, let alone first class.
• 50:51
  But these guys who were high-end consultants that deal with the
• 50:55
  C-suite, they sometimes d- during the night have to fly to go and help
• 50:59
  a customer, so that didn't work.
• 51:01
  So the… is the point?
• 51:05
  And actually, I, I now go teach with one of the guys who… Founders of that,
• 51:09
  Rajeesh, very interesting guy actually.
• 51:13
  but I'm telling them, I always ask the question, who is ahead in the game?
• 51:20
  It turned out the CEO of Infosys Technology was ahead in the game.
• 51:25
  And why is that?
• 51:26
  Well, because he had, if you think about it the way I formulated that is
• 51:30
  if you have revenue on the vertical axis and number of people on the horizontal
• 51:34
  axis, had basically a linear function.
• 51:38
  meant every additional employee brought the same amount of
• 51:42
  revenue than the previous one.
• 51:44
  But if you keep doing that, you're going to, you're going to basically employ the
• 51:47
  entire Indian popula- Indian population.
• 51:51
  you could act… If you were on the… You, you were not just doing your own
• 51:57
  Infosys consulting thing, but you say, "Hey, we are part of this big triangle.
• 52:01
  The big triangle at some point is going to need integrate people who can get
• 52:07
  more revenue per person than previously.
• 52:11
  they're going to do something with us If I told Raj, "Look, you should have gone
• 52:18
  to the CEO as opposed to waiting until the CEO comes to you, and you should have
• 52:24
  told the CEO, 'Look, we know that are trying to avoid total commoditization
• 52:31
  and that we could probably help that.
• 52:33
  But our operating model is so different from what you guys are doing in the,
• 52:39
  in the m- mainstream technology that we should still… Y- we should integrate
• 52:44
  with you, but you should allow us to have a different operating model
• 52:48
  for it than you would have.'" Right.
• 52:50
  So that's what I… But so the, the guys who were running, running the,
• 52:56
  the, the Infosys Consulting entity, who are extremely entrepreneurial
• 53:01
  and very successful, they did not do the people mapping that I was
• 53:06
  just describing from the other one.
• 53:09
  Because if they had done that, they'd said, "Wait a moment, there is going to
• 53:12
  be a bunch of people in Infosy Technology say, 'Why the hell are we letting these,
• 53:17
  these guys in Silicon Valley do all these things on their own? We should probably,
• 53:22
  you we should probably integrating them and, and, and providing…'"
• 53:26
  Do you see what I'm saying?
• 53:28
  That's, that's it.
• 53:28
  That's number one.
• 53:30
  So that's my, that's my, my my advice to whoever is doing
• 53:36
  the the autonomous initiative.
• 53:40
  have the burden of proof, and you must stay ahead of the forces in the triangle.
• 53:45
  Therefore, a little bit of a people map and trying to understand who are
• 53:50
  your partners, who are your, your foes, who are, are your friends, who are…
• 53:54
  You know, that's not a bad idea.
• 53:56
  to how do you know?
• 53:58
  So, the
• 54:03
  When Andy Grove once told me he said, "I'm going to give a speech to the, my top
• 54:08
  executives this after- tomorrow afternoon, and I would like you to come and listen
• 54:12
  to me." And so I go, "Okay." So I went, and so Grove stands in front of the 40…
• 54:20
  All the ones who were not traveling were in the room, right?
• 54:24
  And he said to them, "You guys tell me that we have a top to bottom product
• 54:32
  range." He says, "We don't." fact, he told, he told the, the group, "You guys
• 54:38
  have low-end phobia." And he said, "I have noticed in the- rate of in the OEMs who
• 54:51
  are making the PCs, that the low-end PCs who used, I think AMD in the processor.
• 54:59
  The rate of growth on the low end is much higher than the
• 55:02
  rate of growth at the high end.
• 55:06
  So we are lose-- we're going to lose this thing, so we must develop a low end.
• 55:11
  And so lo- lo- and behold, quick- quickly, they're not
• 55:14
  Intel developed a low processor.
• 55:16
  Actually, it became not that suc- it was actually … He was right, but
• 55:19
  for the wrong, But here is the lesson.
• 55:25
  So if someone asks me if there is a strategic inflection point or not, right?
• 55:33
  Then I say, "You must look at the first derivative on the growth curve."
• 55:40
  In other words, if the change that you have noticed increasing
• 55:47
  Right?
• 55:48
  If the r- each, each-- you have now f-followed this for three years.
• 55:52
  First year it was this, second year over there, third year right here.
• 55:55
  Since inflection point.
• 55:57
  If it is not, you know, there is a little bit here, but it stays like that, maybe
• 56:01
  there is not yet an inflection point.
• 56:03
  We don't really have to worry yet.
• 56:06
  But if you can begin to see that the rate of change is increasing, and I
• 56:14
  think you can try to ident- in fact, probably sales folks would, would,
• 56:19
  would, would, would be pretty awar- pre-pretty, pretty aware of that.
• 56:22
  So that's it.
• 56:23
  I think that's one thing that you can try to use as an indicator, a strategic
• 56:30
  indicator of whether we are really facing a big change or one, you know, there is
• 56:37
  always some change, but it isn't really.
• 56:39
  So these were my two, if
• 56:42
  Per-
• 56:42
  you know
• 56:42
  perfect.
• 56:43
  And you, you've reminded me of, we were talking before you came on air, another
• 56:46
  paper you're writing about the, the company jumped into therapeutics a little
• 56:51
  bit too early, and that paid a huge price.
• 56:54
  We'll, we'll go there again.
• 56:55
  I'm just planting a seed, not a weed for the future for our audience.
• 57:00
  There's one last thing I wanted to ask you, and it's about encouraging
• 57:03
  autonomous strategic behavior.
• 57:05
  So you essentially say top management can encourage autonomic strategic
• 57:10
  behavior by making it relatively easier for middle managent- managers
• 57:14
  to obtain resources to try things, to deploy in projects that don't flow
• 57:19
  from mandates from the top, right?
• 57:21
  So Don Sull, who i- is a guest I've been chasing for a long
• 57:25
  time, co-author with you in From Resource Allocation to Strategy,
• 57:29
  from that book fr- that we studied.
• 57:31
  D- Don, I've been chasing Don to come on the show.
• 57:33
  Don, if you're listening, man, I'm after you.
• 57:35
  I'm coming.
• 57:36
  But he said that he found in, in research…
• 57:40
  And I, I just can't see how this could be possible.
• 57:43
  50% of middle managers are confident of securing significant resources that
• 57:47
  fall outside their strategic objectives.
• 57:50
  But here's the thing, and this reminded me of something else, that they don't,
• 57:55
  or they seldom take advantage of that, and it's one of the things I learned.
• 58:00
  Many of the HQs of many of the US companies that are in Ireland, as you
• 58:04
  probably know, many of the employees in those companies get a budget every year to
• 58:10
  spend on personal learning or education.
• 58:14
  Same thing, so very few take advantage of that.
• 58:18
  If they do, maybe they have an Audible subscription, never
• 58:21
  really listen to the audiobooks.
• 58:23
  It's like having the gym subscription and never going.
• 58:26
  And I thought that, that, that is an important thing to call out, that
• 58:29
  when they have it, they don't use it.
• 58:32
  When they don't have it, they give out about not having it.
• 58:35
  And one important reason you say is that, and this is the really, really, really,
• 58:40
  really difficult thing, is executives tend to look on, say it's for me, for
• 58:45
  example, and I deviate from detailed and measured and rewarded roadmaps
• 58:51
  that, that specify what I should do and when and by what time, then that I'm
• 58:57
  ill-disciplined or I'm a dreamer or I'm a bit loose or maybe I'm a bit crazy.
• 59:02
  And in that judgment, so many ideas die on the vine.
• 59:08
  Yeah.
• 59:08
  So I'll, I'll give you now So years ago maybe I've told you that story
• 59:13
  and then you can eliminate it.
• 59:14
  But years ago, when I had just begun to write about the internal
• 59:18
  venturing process, you know, the University of Minnesota invited
• 59:22
  me to come and give a talk.
• 59:24
  Minnesota is where 3M is, right?
• 59:26
  The famous 3M Company.
• 59:27
  You know, they even… I don't even know whether we all re- 3M
• 59:31
  was always viewed as one of those companies where you could really do
• 59:36
  innovation, corporate innovation.
• 59:39
  In fact, the rule presumably that they had was that you got 15% of
• 59:45
  your time to work on your own ideas.
• 59:48
  So I was talking, I, I didn't call it blue and green then yet, but
• 59:52
  I talked induced and autonomous.
• 59:53
  And so I would tell the, the audience, and there were actually several senior
• 59:57
  executives from… still with suits and tie in the audience in Minnesota.
• 1:00:04
  So I was try- I to- I thought I'm going to be nice to 3M.
• 1:00:07
  I said, "Hey, 3M is a great example of how you can help the autonomous part of
• 1:00:11
  the process because people get 15% of their time to work on their own ideas
• 1:00:17
  outside of the stra- the corporate strategy." when I was finished with my
• 1:00:22
  talk, one of the senior 3M people came to me and he said, "Robert, that you were
• 1:00:28
  very kind use us as an example of the 15% for working on our own autonomous
• 1:00:34
  initiatives." But he said, "You should know 15%, that's between 125 and 140."
• 1:00:46
  And I thought, of course, you can't tell your colleagues, "Sorry, today
• 1:00:50
  I'm working on my, on my 50%."
• 1:00:54
  It's so true.
• 1:00:55
  So true.
• 1:00:56
  I, I, you know, e- an example of that is you see, for example, in
• 1:01:00
  places like Google, they have, like, snooze pods, gyms, basketball courts.
• 1:01:07
  Nobody's on them because it's the judgment of, like, "Oh there's, there's
• 1:01:12
  Burgelman again out. Look, i- it's well for him having a snooze during the day
• 1:01:16
  or going to the gym during the day."
• 1:01:17
  And th- there's the judgment thing again.
• 1:01:19
  Like, it's, it's everywhere
• 1:01:22
  So therefore, here is-- I learned something from another person earlier.
• 1:01:27
  The he, it was a he, and he told me, "You know what?
• 1:01:29
  The best indicator is of autonomous initiatives is the parking lot on
• 1:01:35
  Friday nights and Saturday mornings."
• 1:01:40
  Because that's when the people who have really driven by ideas, they
• 1:01:44
  are-- can escape the pressure of, you know, Aidan comes along, I can't say
• 1:01:50
  sorry, I, you know, today I'm working.
• 1:01:52
  But on Friday nights and Saturday mornings, you would be alone.
• 1:01:56
  So-- or presumably with all the others who are doing the same thing as So
• 1:02:01
  that is another indicator, you know, of not so much of strategic inflection,
• 1:02:06
  but of the, the real drive, you know
• 1:02:10
  Absolutely.
• 1:02:11
  It's such, it's a great call and, and, you know, it's like being a whistleblower.
• 1:02:16
  Like, it, it very rarely finishes well for a whistleblower despite
• 1:02:20
  it being the right thing to do.
• 1:02:21
  So, like, the old me, Robert, used to be like going, "Those dinosaurs, did
• 1:02:26
  they not see the future," et cetera.
• 1:02:28
  But now, the new me, because I'll, I've learned more and I have new
• 1:02:32
  lenses, I can see why people don't innovate, and they just stick to
• 1:02:36
  the core and they don't deviate.
• 1:02:38
  Because there's a lot of punishment.
• 1:02:41
  There, there, there be dragons beyond, beyond the map
• 1:02:45
  Yes.
• 1:02:46
  Actually, so in my ear-- in my ASQ article of 1983, you know, if, if you were
• 1:02:52
  interested, I could send it at some point.
• 1:02:54
  I actually make the point, you know, this is all in passing, that these, these
• 1:03:00
  internal entrepreneurs are tragic heroes.
• 1:03:04
  Why are they tragic heroes?
• 1:03:07
  Because in order to be able to, at some point, continue to do what they want to
• 1:03:14
  do, they sometimes do violate some of the of the operate-- of the operating model.
• 1:03:22
  so the cost of then doing those things in order to progress ultimately to their, if
• 1:03:30
  you want, demise or, you know, or being taken out of the job or whatever it is.
• 1:03:35
  So there is, there is an element of tra-- and, and I mean tragic
• 1:03:39
  in the Greek sense of the word.
• 1:03:40
  In other words, th- you don't-- there's nobody doing anything bad to you.
• 1:03:44
  It is just you end up doing things you have to, that in the end are not
• 1:03:51
  going to be favorable to you, And not because you want to do that, but
• 1:03:57
  you-- the s- the situation in which you are leads to you doing them.
• 1:04:02
  So…
• 1:04:03
  Oh
• 1:04:03
  that-- I, I think that will never change,
• 1:04:06
  And it's, it, it, I, I often say, you know, I convene groups of heads
• 1:04:11
  of innovation, and I say, "We're, we're on the same point on the
• 1:04:15
  spectrum." It's, it's a sp- You have to be a certain type of person.
• 1:04:20
  It's like, it's like the feeling to do the right thing or say the right thing,
• 1:04:24
  or even when, you know, at home with my wife, I know it's gonna cause an argument
• 1:04:29
  and, and everything in, everything I've ever read is like, "Don't say it.
• 1:04:33
  Don't say it.
• 1:04:34
  Don't say it." And I'm like, "Hon, I have to.
• 1:04:36
  Sorry.
• 1:04:37
  Boom." And, and it's just in us.
• 1:04:40
  And you know, I think as always, Robert, learn so much
• 1:04:45
  from you, man, and delighted.
• 1:04:46
  And I'd love to l- learn more of those cases.
• 1:04:49
  The cases you have are fascinating, and I know you have a plethora of
• 1:04:52
  new papers coming down the pipe.
• 1:04:54
  We'll cover them.
• 1:04:55
  And I'm so delighted to say and announce we're gonna cover the book there, Inside
• 1:05:00
  Corporate Innovation, your first book.
• 1:05:01
  We're gonna cover that book, and essentially get, get your get your,
• 1:05:08
  your antiseptic wipes out because we're gonna open up some own- old
• 1:05:12
  wounds for lots of people here when we cover that book as well.
• 1:05:16
  Robert, for people who want to find that paper and find
• 1:05:19
  you, where is the best place?
• 1:05:21
  for those who are really interested, I have actually put
• 1:05:25
  the working paper version on the Stanford Business School list.
• 1:05:30
  So they could probably find that there with the same title, the same authors.
• 1:05:35
  the paper itself is copyrighted, of course, by the St- by the Strategic
• 1:05:39
  Management Review, and I cannot-- I can share that, like, with you.
• 1:05:42
  Oh, oh, no.
• 1:05:43
  You know, it's like fair use, right?
• 1:05:45
  In the
• 1:05:45
  Yeah, of course.
• 1:05:46
  Of course.
• 1:05:47
  Yeah, well, I'll, I'll link to that, and I'll just tell people the, the full title
• 1:05:50
  of it is Autonomous Strategic Behavior: Organizational Learning and Top Management
• 1:05:54
  Support, Re-examining Field Research with Computational Modeling, Robert A.
• 1:06:00
  Burgelman and Sasanka Sekhar Chanda.
• 1:06:04
  That's who it is.
• 1:06:04
  I'll link to it, Robert, as well, so people can find it and find out more.
• 1:06:08
  And also follow your work, because I know you have, you have lots
• 1:06:12
  more papers coming down the line.
• 1:06:14
  And indeed, we'll cover that book, and I'll link to where people
• 1:06:17
  can find copies of that book.
• 1:06:18
  It's still out there as well.
• 1:06:19
  Strategy is Destiny, absolute genius book.
• 1:06:22
  I still pull many examples, including my, my article yesterday, I, I
• 1:06:27
  have mentioned that book, as I always do in my writing as well.
• 1:06:31
  It's a pleasure to learn from you, man.
• 1:06:33
  Robert Burgelman, thank you for joining us.
• 1:06:36
  So long, Aidan.
• 1:06:37
  Thank you very much
• 1:06:38
  As always, thank you to our sponsor, Kyndryl, who run and reimagine the
• 1:06:42
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• 1:06:46
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• 1:06:50
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• 1:06:54
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• 1:06:57
  You can find Kyndryl at K-Y-N-D-R-Y-L.com.
• 1:07:01
  And don't forget, we're gonna cover this book with Robert Burgelman in the future.
• 1:07:06
  His first book, Inside Corporate Innovation, absolutely important book to
• 1:07:11
  get your head around, and quite a light read compared to some of the papers that
• 1:07:15
  you do read, academic papers, et cetera.
• 1:07:17
  I look forward to bringing you that probably in December or January.
• 1:07:21
  Take care.
• 1:07:22
  Talk to you soon