The Great Innovators

Books in Brief: ‘Flying Blind’ and the Crisis at Boeing

September 24, 2022 By Nagesh Belludi Leave a Comment

Bloomberg investigative journalist Peter Robison’s thoroughly researched Flying Blind: The 737 MAX Tragedy and the Fall of Boeing (2022) offers noteworthy lessons about corporate responsibility and leadership problem-solving.

In a nutshell, starting in the late 1990s, Boeing shifted from a company run by engineers who emphasized product integrity to one run by MBA-types who prized shareholder value over long-term product planning. Inspired by General Electric’s Jack Welch, the company embraced cost-cutting, outsourcing, financial engineering, union-busting, and co-opting regulators. These miscalculated strategies culminated in the 737 MAX disasters and disgraceful corporate responses.

Recommendation: Read Peter Robison’s Flying Blind, but be wary of the author’s broad-brush political biases, which, I found, sidetracked from the storyline. The internal organizational tensions that led to corporate deception and the fateful consequences of federal regulators’ consigning design approvals to Boeing are particularly interesting.

Key Takeaway: Negligent engineering to minimize costs and adhere to a delivery schedule is a symptom of ethical blight.

Make the Problem Yours

September 21, 2022 By Nagesh Belludi Leave a Comment

Ownership & Stewardship: Think and Act Like an Owner From a profile of The Gillette Company’s then-CEO Jim Kilts in the 20-Dec-2002 issue of Fortune magazine:

At a meeting with all his division chiefs, Kilts asked for a show of hands: “How many of you think our costs are too high?” Everyone in the room immediately raised his hand. Then he asked, “How many of you think costs are too high in your department?” Not a single hand went up. According to Kilts, it’s a common response among managers of companies in trouble: Everyone knows there’s a problem, it’s just that nobody thinks it’s his problem. And that’s where Kilts comes in: He’ll make it his problem–and yours, if you plan on keeping your job.

Idea for Impact: Make the problem yours. Think and act like an owner.

One of the most underrated skills most employees lack is ownership/stewardship—taking responsibility for results, recognizing when things aren’t working, and getting problems solved.

Plus, teams mirror initiative-takers. When someone starts to take ownership, other people see that, and they’re likely to take ownership of their bits as well.

Dear Customer, Speak Early and Have it Your Way!

September 12, 2022 By Nagesh Belludi Leave a Comment

Development of the Boeing 777 Program: 'Working Together' Initiative

At the heart of every successful product is the ability to address a real need or circumstance of struggle—a “job to be done”—in consumers’ lives. Identification of this “job” happens early in the innovation process, as it forms the core insight around innovation development and execution.

Feedback-Influenced Design is a Key Point of Differentiation

Long before its current mess, Boeing was once the pioneer in aspects of product development. No example illustrates Boeing’s inventive stills than the groundbreaking Boeing 777 program, particularly in its use of iterative, paperless computer-aided design, assembly process-planning, and agile product development. Not only that, the Boeing 777 program offers the most high-profile examples of companies tapping consumers as never before to help them create new products.

Knowing very well that the secret to long-term success starts very early in the innovation process, director of engineering Alan Mulally led a “working together” initiative to organize product development around customer input. (Mulally left Boeing after not being named CEO in 2006 and engineered a dramatic turnaround at Ford Motor Co.)

Alan Mulally: Boeing 777 Program's Director of Engineering and Later Vice-president and General Manager

Concept Testing at Every Stage of Development

In the late 1980s, just as the 777 program was being launched, Mulally made a consequential decision to involve its major potential customers in the development of the aircraft specifications. Mulally made up a “gang of eight” comprising All Nippon Airways, American Airlines, British Airways, Cathay Pacific, Delta Air Lines, Japan Airlines, Qantas, and United Airlines. At the group’s first meeting in January 1990, Mulally’s team distributed a 23-page questionnaire asking what each customer wanted in the design. Within two months, Boeing and the airlines decided on a basic design configuration.

The “working together” initiative was a radical departure from the bureaucratic project organization. Internally, Boeing had become bureaucratic and department-focused. Specialists in various departments would design their parts. Then, it was up to the manufacturing team (the system integrators) to figure out how to make it all come together. It was a “throw-it-over-the-wall” environment where the disconnect was a persistent problem.

Having customer input implied that development was centered on customer needs. This would also tear down the walls between departments—designers, suppliers, and assemblers usually separated by organizations or development phases would now be engaged collaboratively and talking and collaborating in real-time.

Boeing and the In an industry where manufacturers classically designed aircraft with only token customer input. Rather than presenting the market with what Boeing perceived as their idea of what was required, customers had direct input. Over the decades, the Boeing 777 became one of the world’s most successful commercial aircraft and continues to be the workhorse of many a customer fleet.

Idea for Impact: Create Something People Want

Whether selling products or services, fast food, or experiential travel, the most innovative companies organize their offerings around customers’ needs. From the very beginning, they tap consumers as never before to help them create new products, and they’re embedding customer knowledge into the business. Early and frequent feedback is one way to cope with the pressure for shorter product cycles and to be prudent about not investing time and resources in unpromising ideas. It also augurs well for the experiences-over-possessions shift in consumer values.

Evolution, Not Revolution

August 1, 2022 By Nagesh Belludi Leave a Comment

Innovation often transpires from synthesizing existing ideas in new ways, as the following case study on the iPod will illuminate.

Steve Jobs introduces the iPod---Innovation is Evolution Not Revolution In some sense, the iPod wasn’t a breakthrough innovation at all. It emerged from Steve Jobs’s “digital hub” approach to integrating iMac software for playing, editing, and managing photos, music, and movies. According to Walter Isaacson’s masterful biography of Steve Jobs (2011,) when Apple designers learned that Toshiba had newly prototyped a tiny 1.8-inch hard drive that could hold five gigabytes of storage (that’s about a thousand songs,) they conjured up a digital music player. Apple found that existing gadgets were “big and clunky or small and useless” with “unbelievably awful” user interfaces.

Sony’s Walkman had previously proven the market potential of portable audio players, having sold 200 million units in the two decades before Apple conceived the iPod. Napster had offered digital audio file distribution for over five years. Finger-driven touchscreens were pioneered in the 1960s, and Citibank rolled out touchscreen ATMs in the 1980s. (Apple didn’t offer touchscreens until 2007 with the iPhone.) Hence, the iPod’s innovation was in bringing all these capabilities together in a way that was easier to use and relevant to the consumer. Dartmouth’s strategy professor Ron Adner writes in The Wide Lens: What Successful Innovators See That Others Miss (2013.)

Apple was three years late [behind Creative, SanDisk, Sony, and Samsung, who had previously launched portable music players]. As we’ll see again in the case of the iPhone, Jobs tended to be late for everything because he wanted everything to be ready for him. Reflecting on catching technology waves in 2008, he said, “Things happen fairly slowly, you know. They do. These waves of technology, you can see them way before they happen, and you just have to choose wisely which ones you’re going to surf. If you choose unwisely, then you can waste a lot of energy, but if you choose wisely, it actually unfolds fairly slowly. It takes years.” Jobs’s discipline paid off.

Idea for Impact: Innovation often builds on existing technological competencies or as a synthesis of smaller innovations.

Why Investors Keep Backing Unprofitable Business Models

July 29, 2022 By Nagesh Belludi Leave a Comment

Why Investors Keep Backing Unprofitable Business Models Investors have heaped billions into Q-Commerce—especially the rapid grocery startups—hoping to hook consumers on the convenience of groceries that would turn up immediately, sometimes in minutes.

I’ve never really fathomed how the small-basket orders of low-margin groceries can endlessly compensate for the labor costs and overheads, even after discontinuing the generous referral bonuses, discount codes, and freebies enticing customers. The prospects may evolve if these startups subsist on ever more funding and develop massive businesses with efficiencies from scale. But then they’re right in Amazon’s wheelhouse.

Idea for Impact: Some business models are never created to be profitable, and investors should be wary of encouraging—and funding—loss-making propositions. The lure of backing an initial entrant, capturing market share, and then selling out to a more determined fool isn’t viable! Who needs goods delivered in such a rush for such charges, anyway?

Book Summary: No Filter & The Inside Story of Instagram

July 18, 2022 By Nagesh Belludi Leave a Comment

No Filter: The Inside Story of Instagram (2020) narrates the civil networking service’s ascendance from a Silicon Valley startup to a cultural phenomenon with an ever-present feature of everyday life and an advertising juggernaut.

The book’s author, Bloomberg journalist Sarah Frier, says, “On social media, the average user is scrolling passively, wanting to be entertained and updated on the latest. They are therefore even more susceptible to suggestions by the companies, and by the professional users on a platform who tailor their behavior to what works well on the site.”

Instagram evolved from Burbn, a mobile check-in app. The founders Kevin Systrom and Mike Krieger refocused their app on photo-sharing, which had become a well-liked feature among Burbn’s users. Most cellphone cameras were pretty shoddy then, so Systrom and Krieger implemented filters to make the pictures prettier.

The founders didn’t, however, consider the downside of their innovation—reality-adjusting filters made not only users’ pictures but their lives, by extension, look more appealing. “Instagram’s early popularity was less about the technology and more about the psychology—about how it made people feel. The filters made reality look like art. And then, in cataloging that art, people would start to think about their lives differently, and themselves differently.”

No Filter author Frier shines in analyzing how Instagram rewired society and ushered far-reaching consequences for society, especially on young people’s mental health. Instagram and its ilk have stolen self-esteem and our attention span, leaving us with a needy dependency on strangers’ affirmation for a scripted-reality form of our lives. “The more you give up who you are to be liked by other people, it’s a formula for chipping away at your soul. You become a product of what everyone else wants, and not who you’re supposed to be.” The ability to rework photos to perfection has spread insecurity—even leading to a surge in filter-inspired plastic surgery.

No Filter also fixates on the battle for Instagram’s soul, following its purchase by Facebook for a then-absurd $1 billion, but seemingly a bargain today. There’s considerable corporate drama and cultural clash, but nothing like the co-founder infighting retold in Nick Bilton’s Hatching Twitter (2013; my summary.) Facebook founder Mark Zuckerberg emerges controlling and rather callous. In seeking incessant growth, he continually thwarts the Instagram team. Paranoid that Instagram’s advance could “cannibalize” and replace Facebook in cultural relevance someday, Zuckerberg held them back. As Instagram grew bigger and cooler, Facebook acted “like the big sister that wants to dress you up for the party but does not want you to be prettier than she is.” In 2018, Systrom and Krieger left Facebook.

Recommendation: Quick read No Filter: The Inside Story of Instagram (2020) for a compelling founding story and a relevant primer on the sweeping socio-cultural impacts ushered by the heavy use of social media.

Book Summary: Jack Welch, ‘The’ Man Who Broke Capitalism?

June 23, 2022 By Nagesh Belludi Leave a Comment

The Man Who Broke Capitalism (2022) by New York Times columnist David Gelles contends that the pernicious greed spawned by former General Electric CEO Jack Welch is exceptionally responsible for exposing the structural failings of capitalism in recent decades.

The danger inherent in any ideology grows stronger when it starts to thrive because it swiftly morphs into temptation—a voracious appetite for ever better “returns” in the present case. Welch was indeed the most visible catalyst and a much-imitated champion of brutal capitalism. But Gelles’s narrative draws his book’s lengthy subtitle (“How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America”) excessively, thrusting ad nauseam the well-founded thesis against Welch’s ploys and “the personification of American, alpha-male capitalism.” See my previous articles (here, here, and here) about how the faults of Welch’s strategy become evident many years after his retirement.

Gelles does an agreeable job of outlining the socioeconomic paradigm that has made modern western capitalism’s shortcomings ever more apparent. Starting with influential economist Milton Friedman’s decree in the ’70s that the one and only social responsibility of a business is to maximize profits, Gelles explains the revering of Welch’s “downsizing, deal-making, and financialization” strategy. Without balance, it provided short-term benefits for shareholders, but the long-term well-being of corporations and society lost out. A sense of restraint is most pertinent to the power of capitalism.

Summary of 'The Man Who Broke Capitalism' by David Gelles Capitalism isn’t irretrievably bound to fail, as Gelles rightly argues, but it needs to be rethought. It’s morally incumbent upon the social order to inhibit the embedded incentives that create powerful tendencies towards short-termism. Gelles offers no more realistic, objective insights than the familiar solutions prescribed by our career politicians.

Overall, Gelles’s pro-Fabian polemic falls short of a fair-minded assessment of the epoch’s economic forces. Indeed, many of Welch’s tactics were timely and necessary, but he pushed them farther and longer. Too, Gelles fails to study counterexamples of many corporate leaders who’ve thoughtfully copied Welch’s playbook and helped their businesses and communities prosper, not least because they were restrained enough to avoid Welchism’s blowbacks.

Recommendation: Speed Read The Man Who Broke Capitalism for a necessary reappraisal of the legacy of Jack Welch. There isn’t much eye-opening here, but author Gelles affords a relevant parable about the power of restraint and the time- and context-validity of ideas.

Nuts! The Story of Southwest Airlines’ Maverick Culture // Book Summary

May 30, 2022 By Nagesh Belludi Leave a Comment

Kevin & Jackie Freiberg’s Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success (1996) is a popular tome about the history and culture of Southwest Airlines and the fun-loving antics of its colorful co-founder and CEO Herb Kelleher (see my tribute.)

Despite its Pollyannaish tone and repetitive narratives, Nuts| is a very enjoyable cheerleaders’ account of how an underdog overcame roadblocks and thrived in a competitive industry.

Nuts| focuses on the people-oriented culture that Herb and his secretary Colleen Barrett established based on Herb’s well-known dictum, “The business of business is not business. The business of business is people.” To Herb, Southwest was a cause—never just a company. The Freibergs write,

If there is an overarching reason for Southwest Airlines’ success, it is that the company has spent far more time since 1971 focused on loving people than on the development of new management techniques. The tragedy of our time is that we’ve got it backwards. We’ve learned to love techniques and use people. This is one of the reasons more and more people feel alienated, empty, and dehumanized at work. Many organizations today would be surprised at how much more people would be willing to give of themselves if only they felt loved.

Southwest Airlines---Employee Culture

Nuts| is dreadfully out-of-date. Southwest and the airline industry have changed a lot since the mid-90s. Southwest even stopped handing out peanuts to protect passengers from peanut-related allergies.

The miracle at Southwest Airlines could keep on only so long. As long as Herb was the CEO, employees would go the extra mile for the sake of Herb. Until his retirement in 2001, Herb preserved Southwest’s unique cost structure and work rules. Kelleher’s successor, Jim Parker, presided over mounting labor tensions and quit after just three years. CFO Gary Kelly replaced Parker in 2004. Bob Jordan became CEO in 2022.

The going has not been smooth for Kelly. Southwest has become more like the other carriers regarding employee relationships and cost structure. The rehabilitated legacy airlines and a new breed of ultralow cost carriers have chipped away gradually at many of Southwest’s apparent competitive advantages. Yes, customers still rave about Southwest’s friendly staff, unpretentious service, and flexibility in travel planning. However, Southwest hardly ever has the lowest fares on most routes. In fact, Southwest’s average fares have outpaced the industry by 12% since 2009.

Miracle of Southwest Airlines: Employee Culture

Recommendation: Speed-read Nuts! … it’s full of original insights, upbeat stories, and concrete suggestions for principle-centered leadership and how to inspire people to achieve incredible results. Here are the key takeaway lessons:

Even a little respect goes a long way. Give employees responsibility and entrust them to take that responsibility.
Set the ground rules—and let employees be creative. “Culture is one of the most precious things a company has, so you must work harder at it than at anything else.”
Give your employees some skin in the game, and they’ll go the distance. Southwest claims, “We have credibility because we tell people what we’re going to do and then we do it.”
Empower workers to make decisions at the customer level. Employees who feel they have leeway in their jobs to make the “right decision” depending on circumstances are happier, more confident, and more productive. They’ll even give extra—because they believe their work has special meaning and is not just a job.
Make sure people feel they can be themselves and have opportunities to express individuality.
See yourself as a motivator and a positive force. When things go wrong, accentuate the positive and focus on a path to a solution. It’s an approach that employees will admire and want to emulate.
Build a sense of community. Foster the feeling of a “family” in which employees can count on each other professionally and personally.
Recognize that employees have lives outside of work. Celebrate every milestone to establish and strengthen relationships. The walls of Southwest’s headquarters are covered with pictures and commemorative plaques of picnics, community service awards, customers’ commendation letters, service employee milestones, and tributes to important cultural events.

Bollywood: An Escapism to a Happier Place

May 24, 2022 By Nagesh Belludi Leave a Comment

On a long plane ride to India recently, I read Desperately Seeking Shah Rukh: India’s Lonely Young Women and the Search for Intimacy and Independence (2021,) economist Shrayana Bhattacharya’s ethnographic examination of legions of the superstar’s female fans.

Bollywood offers a diversion from the humdrum—and a reprieve from life’s many injustices. Female fans idealize Shah Rukh Khan in his portrayal of romantic, sensitive, vulnerable characters who’re utterly devoted to the women they love. But author Bhattacharya uses the escapism that Bollywood provides as a frame to paint a picture of feminism and socioeconomic inequity. Makes for interesting reading.

Bollywood Star Shah Rukh Khan: An Escapism to a Happier Place

All forms of entertainment offer pleasant escapism—a balm against life’s slings and arrows. But Bollywood melodramas go a step further. Amid the predictable storylines and emotional dialog is the kind and brave hero—the ones typically played by Shah Rukh Khan—who fights for the affections of a pretty damsel against all adversities and vile thugs. Its heroes embody all the desirable qualities and fill fans’ heads with dreams of romance and resolution that may never come.

Their fantasies are—can I get married and be happy? Can I own a small car and not worry about petrol prices? Life can be very hard in India, so for two hours, I’ll give them real fantasy.

—Shah Rukh Khan, quoted in The Australian 10-Aug-2013

And that isn’t so bad. When everything in the film is so pleasing to the hearts—pretty locales, vibrant colors, rhythmic music, and spirited dancing included—no one cares about the predicable hollowness, cheesy dialogues, and the lousy acting.

Idea for Impact: Escapism from quotidian existence makes the world a more optimistic place, waiting to be filled with its own color and song.

Get Good At Things By Being Bad First

May 2, 2022 By Nagesh Belludi Leave a Comment

You Have to Be Bad at Something Before You are Good at it

Your first attempts are going to be bad

A technique used by many a brilliant inventor:

Make something. Get it functional. Get it adequate. It’s okay if it’s subpar.
Then, stumble around. Iterate until it’s good.

Now, that’s a better creative process than making something good on the first go.

Start, even if you’re bad at it

Case in point: Write bad first drafts quickly. Start by getting something—anything—down on paper. Let it all pour out. Let it romp all over the place. No one’s going to see it. You can shape it up later. You can gradually polish the thought flow and enrich the choice of words.

If you aren’t willing to be bad initially, you’ll never get started on anything new.

The way you create something good is by launching into it and then iterating gradually rather than by going into your cave and trying to create that perfect masterpiece.

Essentially, this is agile development. The best programmers write functional code to prove some concept. Along the way, they’ll get a better understanding of the business need for the software and the workflow. Bit by bit, they rework snippets of code and improve continuously.

Idea for Impact: Just start. Do a bad first job.

The bad is the precursor to the good. Bad will get you started. It’ll move you forward. Pressing on, you’ll get illuminated, enlightened, and informed.

Momentum is everything. Don’t put off any contemplated task thinking, “This is hard. I don’t know how to do this well. I’m going to have to do it perfectly. Or I need to wait till I have enough time.” The instant you stop cold and put something off, momentum starts the other way.

Motivation is often the result of an action, not its cause. Taking action—even in small, sloppy ways—naturally produces momentum. It’s a better solution than trying to do it right the first time.

The Great Innovators

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Feedback-Influenced Design is a Key Point of Differentiation

Concept Testing at Every Stage of Development

Idea for Impact: Create Something People Want

Wondering what to read next?

Wondering what to read next?

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Your first attempts are going to be bad

Start, even if you’re bad at it

Idea for Impact: Just start. Do a bad first job.

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