Business Strategy expert Gary Hamel shared some great insights in What Matters Now: How to Win in a World of Relentless Change, Ferocious Competition, and Unstoppable Innovation. The following is a summary of this great book along with some thoughts for acquisition leaders and practitioners to consider. 

Hamel highlights how industry giants like Ford, Procter and Gamble, and IBM broke down company silos, rekindled passion in its employees, opened up innovation pipelines, and inculcating emerging business opportunities and “Innovation Jams“.  To out innovate the upstarts, a company must re-engineer all their processes so they facilitate bold thinking and radical doing.

What limited innovation in established companies is a dearth of pro-innovation processes.

• Few employees are trained as business innovators
• Few employees have access to the sort of customer and technology insights that can spur innovation
• Bureaucratic gauntlet makes it difficult to get the time and resources to develop ideas
• Line managers aren’t held accountable for mentoring new business initiatives
• Lack of common definition and metrics for innovation

Organize for innovation is a key element of the National Defense Strategy.

“The Department’s management structure and processes are not written in stone, they are a means to an end–empowering the warfighter with the knowledge, equipment and support systems to fight and win. Department leaders will adapt their organizational structures to best support the Joint Force. If current structures hinder substantial increases in lethality or performance, it is expected that Service Secretaries and Agency heads will consolidate, eliminate, or restructure as needed. The Department’s leadership is committed to changes in authorities, granting of waivers, and securing external support for streamlining processes and organizations.”

It is critical for DoD employees to be trained as innovators with a solid understanding of what innovation is and how to do it. This includes the acquisition and sustainment workforce, R&D centers, and operational commands. Hacking For Defense was established to enable powerful approaches to stimulating science and technology invention, disruptive innovation, and entrepreneurship on university campuses for the DoD and IC. Companies like Strategyzer offer leading innovation training. MITRE’s Innovation Toolkit also offers users a suite of free tools to spur innovation. 

Hamel defined management innovation in his book The Future of Management as: “anything that substantially alters the way in which the work of management is carried out, or significantly modifies customary organizational forms, and, by so doing, advances organizational goals. Put simply, management innovation changes the way managers do what they do, and does so in a way that enhances organizational performance.” Frankly, I prefer Dan Ward’s simpler definition of innovation as: Novelty with Impact. 

Hamel champions Design Thinking to include:

• Observation: Illuminate the subtle nuances about how people actually get things done or don’t get things done – deep insights
• Intellectual Experimentation: explore a lot of options in a divergent way
• Prototyping: rapid and inexpensive – the most efficient way to move an idea from concept to reality. Building to think.

DoD leaders have increased the promotion and use of prototyping and experimentation to shape weapon systems. DoD published a Prototyping Handbook last year that opens with: In order to retain U.S. global technological dominance, DoD must adopt and mature [extensive use of prototyping and experimentation] quickly, using all existing authorities at its disposal and new authorities provided by Congress in recent law. DoD’s Rapid Prototyping Fund provides a collaborative vehicle for small businesses to provide the department with innovative technologies that can be rapidly inserted into acquisition programs that meet specific defense needs. Congress granted DoD new flexibilities via a Middle Tier of Acquisition to rapidly prototype and field leading technologies for military solutions.

Acquisition programs must be trained and apply Design Thinking practices as part of a broader set of reforms to Accelerate and strengthen system design. It is not sufficient to simply “turn the crank faster,” we must also take a different approach to system design. This is an opportunity for USD(R&E) and DAU to expand its systems engineering curriculum and guidance. 

Hamel challenges leaders and teams to ask themselves:

• What are the thoughtless little ways we irritate customers and what can we do to change that?
• What are the small, unexpected delights we could deliver to our customers at virtually no additional cost?

This goes to a broader mindset of continuous improvement and servant leadership that is limited across the defense acquisition community. Acquisition professionals should reflect and feel empowered to address small fixes to improve the process. How can a program office better meet the needs of the Warfighters and deliver solutions faster? How can decision authorities and functional headquarters staffs streamline the processes and reduce the pain for programs to develop, coordinate, and approve their strategies, designs, and estimates? Are we all working to enable programs to deliver better solutions faster – or simply heads down on our own work and fighting other organizations to get it done? 

Innovation is a company’s lifeblood. They must put employees through an intensive innovation training program. Idea forums, idea funds, and management tools are wasted without a cadre of well trained, highly skilled innovators. To be an innovator, you have to challenge the beliefs that everyone else takes for granted – the long held assumptions that blind industry incumbents to new ways of doing business. 

Anticipation – You can’t outrun the future if you don’t see it comping

• Face the inevitable
• Learn from the fringe
• Rehearse alternate futures – plan for potential strategies

Decades ago, DoD could design, develop, and produce weapon systems that lasted for decades, knowing that the operational missions and technologies wouldn’t change significantly. Today we take longer to field systems, but the missions, technologies, and threats are rapidly changing. This is why DoD requires staying attuned to new technologies and threats from adversaries to ensure the systems we’re developing a relevant and resilient when fielded. This is where prototyping, experimenting, and operational exercises are invaluable to demonstrate new capabilities and threats to continually refine our requirements, investments, and designs. 

Intellectual Flexibility – An adaptable company requires adaptable minds

Cyborg companies like Google, Amazon, and Apple won’t have Industrial Age DNA. Management practices built around principles like freedom, meritocracy, transparency, and experimentation. To innovate, you need to see your organization and world as a portfolio of skills and assets that can be endlessly recombined into new products and businesses. The first step for an organization to build game-changing innovation is to teach people how to view the world around them with fresh eyes. Control-oriented, top-down structures are toxic for creativity.

One of DoD’s greatest risks is its entrenched, outmoded processes, culture, and structure. If DoD were to design a new set of structures and processes for the Digital Age, along with a modern culture, it would look radically different and be more effective to achieve NDA objectives. Our adversaries and emerging threats don’t have the burdens of our defense bureaucracy and are able to rapidly exploit leading technologies for military solutions. Change management expertise is needed throughout the Pentagon and acquisition organizations. Acquisition professionals must be given the authority, autonomy, and accountability to rapidly deliver a suite of innovative solutions. 

Innovation isn’t always about invention; often it’s about borrowing great ideas from other industries.

PEOs and operational commanders should regularly look outside their mission area for innovative solutions. Remove the biases from decades of operations to identify the core elements of the mission, challenges, and opportunities. Visit Fortune 500 companies, startups, other Services, and Allied nations to understand how they’re accomplishing their mission. Explore new capabilities and procedures to shape your operations. 

The Air Force is looking to Uber for insights to shape their designs for its next generation multi-domain command-and-control capabilities. “Just like that works for us in our private lives, we, too, are trying to get our capabilities within seconds to the right place, at the right time, to the right target, to the right effect,” Preston Dunlap said. “We can harness that [commercial effort] … with aircraft, satellites, submarines, and people and tanks on the ground.”

Jackson Nickerson of Brookings offered some caution in this approach: “Just because FedEx and UPS are known for their leading-edge logistics capabilities, for example, does not mean that U.S. Transportation Command should copy these best practices. Instead, studying the underlying problems these firms solved and learning about their specific approaches will help U.S. TRANSCOM designers better understand and optimally resolve their own unique logistics challenges.”

The conversation about “where we go next” should be dominated by individuals who have their emotional equity invested in the future rather than the past. 

Couldn’t agree more! Leaders must work WITH employees to implement transformative changes. As Nilofer Merchant wrote a decade ago in The New How, executives must eliminate the “air sandwich” between boardrooms and employees and develop collaborative strategies to create solutions. Below is a short video from Gary Hamel on the key takeaways from his book. 

Disclaimer:  The opinions expressed here are those of the authors only and do not represent the positions of the MITRE Corporation or its sponsors.