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The "Dirty Secret" of Innovation

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The "Dirty Secret" of Innovation

Marco Moreira

This post is part of the Innovation 101 series, a collection of essays exploring this topic from various perspectives

Summary

1) Most of the value created by companies comes from the work of very few people

2) Everyone else is employed to scale or support the big idea

3) As companies scale, they forget this critical phenomenon


Peter Thiel asks a simple, yet profound question in his recent book, Zero to One: Notes on Startups, or How to Build the Future:

What important truth do very few people agree with you on?

As I’ve come to realize, the “important truth” that seems to be hidden from most successful organizations nowadays is the story of how they managed to win in the first place. I don’t mean the biography of the founders or the timeline of key achievements, but rather the curious fact that ONE big idea, executed by competent operators, is often how today’s leading companies got to where they are.

The part where very few people seem to agree on is the idea that, regardless of company size, most of the value created comes from the ideas of a relatively small number of people. Key people, irreplaceable people, folks who were there with just the right skills at the right time in their lives to make something great happen. Everyone else, though important to the operation of the enterprise, is there to scale or support the initial big idea in some form.

Maybe the biggest reason for disagreement is because most of us, by definition, have jobs that are related to scaling/distributing/supporting the big idea, not necessarily inventing it. Even “innovation” folks (product, engineering, design, etc) end up optimizing small pieces of the big idea as a company scales, which is basically just another way to support it.

So what’s the problem? It’s this: we really don’t know how to keep fostering the sort of small group/big idea combos that lead to massive value creation as companies scale. Isn’t that the whole point of being in business? For every "Google X”, there are hundreds of companies where the word “innovation" is in the job title of people who can’t be fired easily but still need to do some work to justify their paychecks. Why?

Perhaps finding the right people at the right time to create the next big thing is so hard that any reasonable manager basically gives up. At least trying to optimize something that already exists appears to be less risky (until the day disruption comes knocking). Perhaps we’re too afraid to try, to struggle, to fail or even, as weird as it may sound, to succeed...